What do playing with the grandkids and paying down a mortgage have in common? For a growing number of Canadians, these are two things they’ll do in retirement.

Recent findings from Statistics Canada confirm that 34 per cent of retired seniors (age 55 and older) are in debt. For 20 per cent of this group, this debt is entirely mortgage-related. For 57 per cent, it’s due to consumer spending. And for the remaining 23 per cent, it’s a combination – they’re dealing with both a mortgage and consumer debt.

Even more unsettling are the dollar amounts. Within this group:

  • 32 per cent owe $5,000 to $24,999,
  • 26 per cent owe $25,000 to $99,999, and
  • 17 per cent owe $100,000 or more.

This works out to an average debt of just over $60,000. Add in the fact that many retirees live on a limited income – one that needs to cover their basic, health and lifestyle expenses for possibly 30 years or more – and debt repayment becomes downright difficult. Instead of enjoying sunny days on the golf course or cross-country travels, they may be struggling just to make ends meet.

As an advisor, your awareness of this emerging trend and ways to address it is important. Some Canadians will delay their retirement. Others may need to rethink their retirement plans. Regardless, the common denominator will be the need for sound financial advice to help make the most of their hard-earned money.

Delayed retirement – According to the 2013 Sun Life Canadian Unretirement™ Index, only 27 per cent of Canadians ages 30 to 66 expect to be retired at 66 (compared to 51 per cent in 2008). The top three reasons cited by this survey all relate to finances.

  • 25 per cent say it’s to earn enough money to pay basic living expenses.
  • 21 per cent say it’s to earn enough money to live well.
  • 16 per cent believe that government pension benefits won’t be enough to live on.

No matter what the reason, many will welcome effective product solutions and investment strategies to maximize their income. That’s where you come in.

Candid conversations – Knowledge is power. Talk to your clients about retirement and debt. For those nearing or in retirement and owing money, this may mean updating their plans to address debt repayment. For younger clients, awareness of this growing reality and how it might impact their retirement dreams is the first step in overcoming it. Your help in developing plans that encourage savings, protection and lifetime financial security can help Canadians retire with confidence…without debt.

Originally published on Advisor.ca