Retirement Advice for Widows and Widowers

The death of my wife Mary meant the loss of my best friend and the end of many of my retirement plans and goals. During the first few months after becoming a widower, grief prevented me from updating or even thinking about my retirement plan. Eventually, the brain fog lifted, and I realized how much my retirement plan had changed.

I began worrying about my new retirement reality, yet as more time passed, I realized that developing a new retirement plan was part of the healing process. As I began to plan my new retirement dreams and goals, my worry gradually lessened, and I began looking forward to the future.

Here is my four-step process to help widows and widowers calculate their new retirement pension and take a positive step forward on their own.

The whole process starts by estimating your retirement spending, selecting a target date for achieving financial independence, making a few assumptions, and finally plugging all the information into a retirement calculator.

Sounds easy but if you need help with any of the steps, contact me and we can work on the four-step process together.


The realities of making new plans.


My late wife and I planned to retire around the age of 65 and spend more time travelling and enjoying our kids and friends.

Having always prepared a retirement plan that addressed the income goals of two people, everything changed when I lost Mary. On that sad day, all of our retirement dreams died, and I was left to find ways to move forward on my own, including rewriting my retirement plan.

My new reality included re-evaluating my income, expenses, income taxes and government benefits. For me, my lifestyle expenses did not drop by 50% as might be expected but closer to 30%. I lost Mary’s second income and was shocked at the lower CPP and OAS entitlement for widowers.

Other widows and widowers may have their own unique retirement challenges such as:

  • They may lack the experience of handling their finances.
  • Their spouse’s life insurance proceeds may be insufficient or nonexistent.
  • They may not have a full-time job, may not be part of a pension plan and may have lost their spouse’s employee benefits.
  • They may still face the cost of raising and educating their children.
  • They may be responsible for taking care of their parents.


Rewriting your retirement plan starts with the number.


It’s safe to say, a widow’s retirement plan and estimated retirement income will be very different after losing their spouse/partner. Here are the four-steps required to rewrite your retirement plan and estimate your retirement income.


1) How much are you spending?

During my 25+ years as a financial planner, I find that this question strikes fear in the eyes of my clients. The most common answer is “I don’t know” or “we spend everything we make… I think?”

Determining how much one spends has always been difficult to calculate because it involves manually tracking expenses on a spreadsheet. The process is time consuming and prone to mistakes consequently, many people give up and “wing it” when estimating their expenses.

Fortunately, we now have a budget tracker called by Intuit. The app helps people track where their money is spent and allocates the spending to major categories (such as groceries, gas, mortgage etc.). The work is done automatically, without the need of spreadsheets, and thankfully takes about one hour per month to maintain.

Once you understand how much you’re spending, the next step is to add additional expenses that will be incurred during your retirement years (such as additional travelling, charitable donations etc.) and subtract expenses that disappear when you retire (such as car expenses, clothing expenditures etc.).

For example, let’s assume I spend $75,000 per year. In retirement, I plan to take at least two additional trips per year and downsize my home. Hence, I estimate my expenses will increase by $15,000 due to the extra vacations but will decrease by $30,000 due to a smaller house.

In this example, I assume retirement expenses of $60,000 per annum (indexed to 2% inflation) (or $73,000 before Federal and Ontario tax).

Many people decide to live frugally prior to retirement so that they can live a more comfortable life in their senior years.


2) When would you like to become financially independent (or “retire”)?

I will never ask, “when are you planning to retire?” Instead I will ask, “when would you like to be financially independent?” Read my e-Book: Live well, stay rich, never retire for more information on the difference between the two definitions.

Some widows choose 65 as their target age for financial independence but like estimating your widow’s retirement spending (step 1), it’s a personal decision and everyone’s circumstances are unique.

For simplicity, I assume financial independence by age 65.

3) Let’s make a few conservative assumptions (use mine or make your own).

a) Age of death

According to Statistics Canada, a 65-year-old widow is expected to live another 21 years, or until age 86.

To be conservative let’s assume a life expectancy of 901.

b) Inflation rate

According to the Bank of Canada, the average annual inflation in Canada from September 1915 to September 2020, was 3.01%.

For simplicity, we’ll assume 3% inflation2.

c) Investment returns

The average annual investment returns for the S&P/TSX (a benchmark for Canadian stocks) for the last 10, 20 and 50-year periods (as of December 31st, 2020) were 5.8%, 6.2% and 9.3% respectively. I estimate that short-term Canadian equities returns will gradually rise to match their long-term historical averages, but let’s be conservative.

I’ll assume that Canadian equities will grow at 7% annually3.

The average annual investment returns for the 10-year Government of Canada bond (a benchmark for the Canadian fixed income) for the last 10, 20 and 50-year periods (as of December 31st, 2020) were 2.2%, 3.4% and 6.9% respectively. Since we’re currently at the historically low-end of interest rates and higher inflation seems possible, I’ll assume a lower bond return going forward.

I’ll assume an average return from 10 year bonds at 3% annually.

d) Asset allocation

Asset allocation refers to the percentage of cash allocated amongst the various asset classes such as stocks, bonds and cash (I’ll ignore the other asset classes for the purpose of my example). The percentage in each class depends on many personal factors such as one’s risk tolerance, age, other assets, etc.

For simplicity, I will assume a 65-year-old widow has an asset allocation of 60% equities and 40% bonds.

e) Expected investment return

Assuming an asset allocation of 60% Canadian equities and 40% 10-year government of Canada bonds AND an expected rate of return of 7% for equities and 3% for bonds.

The expected return from this portfolio is 5.4% before fees (7% x 60% + 3% x 40%)

f) Other sources of income

  • Assume full CPP: $14,445 per annum.
  • Assume full OAS: $7,623.12 per annum.
  • Assume no pension plan.

In short, I need a pool of money that generates an annual retirement pension of $37,932 (60,000-14,445-7,623) rounded up to $40,000 plus 3% inflation from the age of 65 to 90. I will also assume the funds grow at an average investment return of 4.4% (5.4% less advisor fee of 1%).


4) Plug your assumptions into a retirement calculator:

For simplicity, I’ll assume that all monies are in an RRSP account (note: widows may also save in a TFSA, a cash account, in real estate, etc.). I used the retirement planning calculator available on Scotiabank’s website. Try it for yourself. It’s very simple to use.

Click here to access a retirement savings calculator.

Once all of the assumptions were entered, the program calculated that a retirement pool of approximately $600,000 is needed to generate after-tax target income of $60,000 per annum, indexed to an annual inflation rate of 3% and integrated with CPP and OAS. 


Final Thoughts


In summary, retirement plans and retirement income both change when you become a widow or widower. Once the “brain fog” lifts, revisiting your retirement plans is part of the healing process and a positive way to move forward on your own.

If you’re still unsure about how to determine your retirement pension or need guidance in selecting an appropriate asset allocation for your unique situation, please contact me and I will personally introduce you to our office and the services that we provide.

If you are newly widowed and you’re not sure how to plan for the future, please give us a call and I will personally introduce our office and our services. In fact, if you have any goal in mind — big or small — that requires some financial planning, but you’re struggling with where to start, reach out to our team. We have the expertise and life experiences to help guide you to achieving your goals.

Contact us today to learn more about the options available to you. 



This article was written by Richard Dri, Senior Wealth Advisor with Scotia Wealth Management. He can be reached through his website and his email address is