Money management tips for seniors.
But for many Canadian seniors, living the high life post-retirement means piling on more debt.
A recent Equifax survey, featured exclusively in the Financial Post indicates that an increasing number of Canadians 55 and older are relying on debt to finance their lavish lifestyles.
According to the report:
- 3 million Canadians 55 or older are carrying some sort of debt;
- 87 million still carry a mortgage;
- The average senior (75 and older) carrying a mortgage still owes an average of $113,944; and
- A growing number of seniors are using debt to finance their lifestyles.
Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, is concerned with the increase in debt levels among older Canadians.
“I get that most people have earned the right to live life as they wish post-retirement,” says Schwartz. “What concerns me is the accumulation of debt in order to finance a lifestyle that is beyond your means.”
“Just because we stop working, doesn’t mean we should stop planning and budgeting. Incomes can change dramatically after retirement. The last thing you want is to face collections, or worse – bankruptcy, after working so hard for so many years.”
For Schwartz and the team at Consolidated Credit, helping seniors manage their finances ,before and after retirement, means providing helpful tips to manage money and live the retirement of your dreams – within reason!
Here are some money management tips for seniors:
Draw up a budget – Whether you are retired or preparing for retirement, it is essential to prepare a budget based on your expected retirement income. You will also need to take a look at your post-retirement spending. If there is a significant gap between your income and your spending, you need to find ways to increase income or reduce spending – or both.
Review your savings and investments – It is essential to maintain an emergency fund to cover three to six months’ worth of expenses, even after retirement. It’s also wise to review investments to ensure your money is working. You have worked hard for your nest egg, and you want to make the most out of your retirement savings.
Go back to work – If having the nicer things in life is your post-retirement goal, consider taking on a second job. Part-time work has the potential to boost your income enough to help you finance a dream vacation, golf membership or anything else you’ve dreamt about.
Think twice about being the bank of mom and dad – One of the quickest ways to hamper your retirement savings is to finance the dreams and aspirations of your adult children. While there is nothing wrong with helping a family member in need, footing the bill for your children’s lifestyles can quickly lead down the road to debt. Take the time to think about family requests to borrow money. If you do step in to help a child out be sure to set up an agreed upon re-payment plan.
If your retirement savings are already depleted and you are beginning to take on debt, it may be time that you asked for help. Give us a call, today to speak to a trained credit counsellor and find out how you can get your budget under control. You can also try our Free Debt Analysis online and a counsellor will reach out to you.