All clients want a worry-free retirement, but some could find themselves facing financial challenges in their golden years.
That’s because 25% of Canadian retirees are living with debt, finds a national survey from Sun Life Financial.
In fact, some retirees still use credit as they did before retirement, with 66% carrying debt from credit cards. That’s similar to the percentage of working Canadians with such debt (65%).
On average, retired Canadians carry more than $11K in non-mortgage debt (compared to almost $19K for working Canadians). And 20% of retirees are making mortgage payments.
Here are other areas where retirees owe money:
- car payments (26%);
- health expenses (7%);
- holiday expenses or vacation property (7%); and
- home renovations (6%).
Dipping into RRSPs
At the same time that retirees face lingering debt, almost one-quarter (24%) of working Canadians are dipping into retirement savings.
Canadians pulled cash for the following reasons:
- needed expenses, such as healthcare and debt repayment (63%);
- home down payment through the First Time Home Buyers’ Plan (24%); and
- discretionary spending, such as vacations and car purchases (13%).
Similar to the Sun Life survey, a BMO poll finds that reasons for dipping into RRSPs include purchasing a home (27%). But in that poll, fewer Canadians cited expenses: 23% said they used withdrawals to pay for living expenses, while 20% were using the funds to pay off debt—a total of 43%.
For more details, read the survey results.
About the survey: Sun Life Financial Canada’s survey is based on findings of an Ipsos poll conducted between Oct. 13 and Oct. 19, 2017. A sample of 2,900 Canadians, aged 20 to 80, was drawn from the Ipsos I-Say online panel. The data for Canadians surveyed were weighted to ensure that the sample’s regional, age and gender composition reflect those of the Canadian population.