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