(TORONTO, ON) – Baby Boomers are starting their anticipated mass retirement from the work force, but their financial future is cloudy. Increasing life spans and persistent debt are cause for concern among those heading into their golden years.
In a report released on May 21st, RBC Economics states that an aging population is reaching retirement age in large numbers. This echoes a Statistics Canada study from 2007 that predicted the beginning of a retirement boom as the first of the Baby Boomers start to reach retirement age.
But, as these elder Canadians ride off into the sunset, they are saddled with large debt loads.
· The average debt load for a Baby Boomer retiree is over $60,000
· 17% owe more than $100,000
· Around 57% have consumer debt; 20% have mortgage debt
SOURCE: Statistics Canada, Canadian Financial Capability Survey, 2009
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, Inc., worries that debt and retirement may lead to a financial disaster.
“Dealing with debt payments on a reduced retirement income can put a strain on personal finances” says Schwartz. “Baby boomers should try to eliminate their debts before retiring to ensure they can enjoy the rest of their lives.”
Increasing life spans are also extending the period where seniors need to rely on their savings. This has caused concern among the elderly about whether they will be able to retire on their own terms. An Ipsos Reid poll from late last year found that just 26% of Canadians expected to be retired by the age of 66.
“Freedom 65 is being pushed back to Freedom 68, 69 or 70″ says Schwartz. “Seniors don’t have confidence that their limited savings will allow them to live out the rest of their lives peacefully.”
Consolidated Credit believes financial success starts with a financial plan. The following are some tips for Canadians nearing retirement:
· Know what to expect – Figure out what sources of income you will have in retirement. Factor in your pension, old age security and an investment income you expect to earn. A great resource is the Retirement Calculator from Service Canada.
· Be a ruthless saver – Make a savings goal and reach it. Whether its $20 a day, $200 a week or $2000 a month, do everything in your power to stay on track. Your savings will be integral to your long-term financial security.
· Eliminate debt – Getting rid of your debts will increase the amount of money you have to spend. You will no longer have to cut a cheque every month to the bank or your creditors and instead, you can use that money to enjoy your retirement.
Retirement is something that Canadians look forward to for years. But, to truly enjoy your senior years, financial security is necessary. Carrying debt into retirement is a dangerous proposition for the Baby Boomer generation.
About Consolidated Credit Counseling Services of Canada, Inc.:
Consolidated Credit Counseling Services of Canada is a national non-profit credit counselling organization that teaches consumers about personal finance.
For more information or to request an interview with Jeffrey Schwartz, please contact:
Eric Spence, Public Relations Coordinator, Consolidated Credit Counseling Services of Canada, Inc., T: 416-915-7283 ext.1041, C: 416-731-5588, F: 416-915-5200, E: [email protected], www.consolidatedcredit.ca