The average Canadian is eager to retire by the age of 61, but nearly half (48%) do not feel they are financially prepared for a satisfactory retirement, according to an Ipsos Reid survey conducted for HomEquity Bank. The survey polled 1,054 Canadians ages 45 to 60.
Debt is a major factor affecting the financial stability and retirement plans of Canadians; 45% of retired respondents carried debt into their retirement. Among this group, 28% of respondents cited a mortgage as their primary source of debt, while 23% had a line of credit and 16% had high‐interest credit cards as their main debt source.
Similarly, roughly half (49%) of respondents who have not yet retired expect to carry debt into retirement, including a mortgage (19%), line of credit (19%) and credit card (24%) debt.
“There is an obvious disconnect between the ideal retirement goals of Canadian seniors and their current financial position,” said Greg Bandler, senior vice-president with HomEquity Bank.
The survey found that of the 61% of overall respondents (retired and still working) who indicated they would like to keep their current homes throughout retirement, 36% would consider leveraging their home equity to make it possible.
Bandler says that leveraging home equity is one way seniors can increase their cash flow. “Debt may be a major factor affecting retirement plans, but responsibly leveraging home equity can allow Canadian seniors to improve cash flow and eliminate high‐interest debt while maintaining ownership of their family home,” he said. “In this way, homeowners can turn their home into a liquid asset that contributes to their financial plan.”