An excerpt from RBC “Life and Money” By Diane Amato
Diane Amato is a Toronto-based freelance writer who loves to talk about finances, travel and technology.
More and more Canadians are retiring with debt. Even so, that doesn’t make it any easier for you to pay off what you owe once you stop working.
It’s easy to spend money before you retire. In the years leading up to retirement, you may want to tackle some home renovations, take a vacation, or help out your children with education, housing or wedding expenses. And while you might expect to have ample resources available to pay off any debt you accumulate before retiring, life doesn’t always work out as planned.
The result can be a debt load that gets carried into retirement – a trend that is growing among Canadian seniors. In fact, a 2015 study from the credit firm Equifax says that seniors are increasing their debt loads at a much faster pace than the population at large. The same study indicates that this debt is becoming harder to pay off. Delinquency rates (when you’re 90 days or more behind on your bills) for Canadians aged 65 and up have risen for the first time in 5 years.
The challenging part about carrying debt into retirement is that it becomes harder to pay off balances. Your budget is more fixed, and money that you have saved up for your retirement is earmarked to cover your living expenses and what you had planned for your next 30 years.
If you are entering retirement with unexpected – or higher than anticipated – debt, there are ways to reduce the amount you owe. At the same time, it’s important to speak to the right people about the debt you have to effectively manage it going forward.
For more information contact The Wilson Team or call 613-695-9250
