Startling Number of Canadians Struggling With Debt
Baby boomers are burdened by mortgages and unpaid credit and one in four Canadians are struggling to manage debt in retirement, a new survey finds.
From living with a mortgage to unpaid credit cards, retirees can find themselves facing financial challenges in their golden years, according to the Sun Life Financial Barometer, a new national survey.
A worry-free retirement may be a thing of the past.
Baby boomers are no stranger to today’s increased financial demand; in fact, one-in-five (20 per cent) retirees are still making mortgage payments. The financial strain doesn’t stop there, the survey results reveal that retirees still use credit in some of the same ways they did before retirement. Mortgage aside, here’s where they still owe money:
- 66 per cent have unpaid credit cards.
- 26 per cent are making car payments.
- 7 per cent have unpaid health expenses.
- 7 per cent owe money on holiday expenses or vacation property.
- 6 per cent haven’t paid off home renovations.
“Through our national survey, we took a moment to check-in with Canadians and gauge how they are stacking up when it comes to their finances,” said Sun Life Financial Canada president Jacques Goulet.
“From credit card debt to a mortgage, retirees are faced with a list of expenses in life after work. We recognize that managing finances can be overwhelming, particularly for those who are no longer working. Seeking sound advice and working with a financial advisor can help you reach your goals.”
At the same time retirees face lingering debt, almost one-quarter (24 per cent) of working Canadians are dipping into their retirement savings. Canadians pulled cash for the following reasons: 63 per cent did so because they needed to (e.g., health expenses, debt repayment); 24 per cent as part of the First Time Home Buyers’ Plan; 13 per cent because they wanted to (e.g., vacation, car purchase).
“Our survey results highlight the importance of getting ready for retirement,” said senior vice-president of group retirement services Tom Reid.
“Although it can seem far away, retirement creeps up faster than you think - building a financial plan and making meaningful contributions will pay off in the long run. There are helpful tools and resources you can tap into to get on the right track to building the income you want and need to retire.”
The following tips can help Canadians save for a bright retirement:
- Start now. Begin saving and investing as early as possible to set yourself up for success.
- Don’t leave money on the table. If your employer offers a pension plan and will match your contributions, contribute the maximum amount possible.
- Invest wisely. If you do not have access to a defined contribution plan, RRSPs and TFSAs are other great vehicles to consider.
- Have a plan and stick to it. It’s never too late to build a financial plan that will get you where you want to be.
- Seek valuable advice. A financial advisor can help you create a financial plan, set achievable goals, and guide you through each life stage.
(Source: Sun Life)