A new survey conducted by the Royal Bank of Canada found that one in four Canadians retired with some form of debt. The survey discovered that the Canadians, over the age of 50, have at least $100,000 in assets, but also have some debt when they retire. Twenty-eight percent of those polled said they took on more debt after retiring. “More and more, Canadians are carrying debt into retirement, which is not necessarily a bad thing,” Lee Anne Davies, head of retirement strategies at RBC, said according to a report by Reuters. “Having access to credit in retirement can be beneficial to managing income and cash flow, and provide additional flexibility.”
Another survey released on the same day said that almost two out of three Canadian home buyers feel they will be able to pay off their mortgage sooner than expected. The poll, released by Canada Mortgage and Housing Corp, found that 81 percent of home owners are comfortable with their current level of housing debt. The poll did reveal that about one in three Canadian retirees worried how inflation would impact their retirement income. Nearly half of people who have not yet retired shared that same concern. Many retirees also showed concern about how taxes would affect their income.
The Canadians polled say they’re living on a little more than half of what they lived on pre-retirement. However, a report by the Toronto Sun said that financial planners suggest aiming for a 70 percent replacement of your income in retirement in order to maintain the quality of life you are accustomed to. Finance Minister Jim Flaherty recently completed a Canadian tour, gathering information about the country’s retirement income system. Flaherty believes those who are well prepared will end up taking on the responsibility for those that aren’t. But Davies pointed to unexpected expenses that retirees often face. “It’s not uncommon to be concerned about maintaining a sustainable level of income in retirement, but costs you never counted on may also arise,” Davies said in a Toronto Sun report. “For example, our poll found that almost one-in-five retirees spend over $1,000 annually on prescription drugs.”
Tags: Canada, retiree, Aging, Retirement
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