Over half of retired Canadians still in debt

Retirement is supposed to be a time to enjoy life, but more than half of Canadian retirees are still concerned with debt payments.

Over half of retired Canadians still in debt

Retirement is supposed to be a time to enjoy life, but more than half of Canadian retirees are still concerned with debt payments, a new poll finds.

In a Harris/Decima poll conducted for CIBC, 59% of retired Canadians say they are carrying debt. Among this group, 19% say the amount of debt they are carrying has increased in the past 12 months.

While that is below the national average of 71% across all age groups, the high number indicates that many older Canadians did not adequately prepare for retirement. Among retired Canadians with debt, 19% their level of debt has increased over the past year. Another 36% said their debt levels have stayed the same - indicating that 55% of all retired Canadians with debt missed an opportunity to pay it down over the past year.

The poll showed that 37% of retired Canadians are juggling two or more debt payments a month. Among retired Canadians with debt: 39% said they are carrying debt on their credit card, 30% on a line of credit, 16% on a mortgage and 14% on another type of loan.

Christina Kramer, CIBC executive vice president retail distribution, said advisors should review client finances to determine whether there are ways to accelerate debt repayment, such as consolidating debt at a lower interest rate or making slightly higher regular payments.

"With today's low interest rates, there is an opportunity for retired Canadians to review their monthly cash flow and make progress in paying down their debt,” said Kramer. “Although future interest rate changes can't be predicted, being on a fixed income means any interest rate increases will have a greater impact on your monthly cash flow for those retired Canadians carrying debt."

“Canadians carrying debt into retirement may miss out on the full benefit of their retirement savings because they are using some of it to make their monthly debt payments," she said.

For regional findings see p.2

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KEY POLL FINDINGS

Percentage of Retired Canadians currently managing some form of debt, by region:

 

National

59%

Atlantic Canada

65%

Quebec

58%

Ontario 

60%

Manitoba and Saskatchewan

58%

Alberta

53%

British Columbia 

59%

 

 

Among Retired Canadians that said they are currently managing debt, percentage
that say their debt has increased or stayed the same in the past 12 months, by region:

 

National

55%

Atlantic Canada

82%

Quebec

50%

Ontario

54%

Manitoba and Saskatchewan

35%

Alberta

52%

British Columbia

52%

 

 

Among Retired Canadians that said they are currently managing debt, percentage
that say they are juggling two or more debt payments each month, by region:

 

National

37%

Atlantic Canada 

42%

Quebec

38%

Ontario

36%

Manitoba and Saskatchewan

36%

Alberta

35%

British Columbia  

34%

 

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