“Although retired Canadians hold less debt than those still working, they are also less likely to be taking steps to accelerate their debt repayment. This suggests that retired Canadians may carry debt for longer than they anticipated in retirement, incurring higher interest costs and affecting cash flow,” said the CIBC.
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Key poll findings include: 59 per cent of retired Canadians currently hold some form of debt compared with 76 per cent of all non-retired Canadians; only 27 per cent of retired Canadians said they have made an extra lump sum payment towards their debt in the past 12 months, lower than the national average of 42 per cent of all non-retired Canadians; and on average, retired Canadians carry 1.65 debt products with a balance (including mortgages, lines of credit, loans and credit cards) compared with 2.64 products with a balance among non-retired Canadians.
“While retired Canadians carry less debt than the national average, their debt could be stagnant and may end up costing them more in interest costs over a longer period of time,” said Christina Kramer, Executive Vice President, Retail Distribution and Channel Strategy, CIBC. “You really have to think about the debt you are retiring with because the regular repayments you make will directly affect the discretionary income you have.”
In Alberta, the percentage of retired Canadians holding some form of debt was 58 per cent.
The percentage of retired Albertans who have made an extra lump sum payment toward their debt in the past 12 months was 30 per cent.
The percentage of retired Canadians that hold a debt product with a balance by product is: line of credit, 29 per cent; credit card, 28 per cent; mortgage, 14 per cent; and loan, 13 per cent.
The average age at which Canadians expect to retire is 63 while in Alberta it’s 62.