More than half (59%) of retired Canadians say they’re carrying debt, with 19% saying they’ve piled on more over the last year, finds a CIBC poll.
On a regional basis, 65% of retirees in Atlantic Canada have debt compared with 60% in Ontario; 59% in British Columbia; 58% in Quebec, Manitoba and Saskatachewan; and 53% in Alberta.
While fewer retired Canadians are carrying debt compared to the national average of 71% across all age groups, paying down debt becomes more difficult after retirement when many Canadians transition to a fixed income.
“When you reach retirement, you should be able to enjoy the money you have worked hard to save over your lifetime,” says Christina Kramer, executive vice-president of retail distribution and channel strategy with CIBC. “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.”
The poll also reveals that 37% of retired Canadians are juggling two or more debt payments a month. Among retired Canadians with debt…
- 39% are carrying debt on their credit cards;
- 30% have debt on their lines of credit;
- 16% are still paying off their mortgages; and
- 14% have loans.
“With today’s low interest rates, there’s an opportunity for retired Canadians to review their monthly cash flow and make progress in paying down their debt,” says 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.”
A version of this story originally appeared on our sister publication, Advisor.ca.
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