Four-in-ten Canadians retiring with debt - Canadian TV, Computing and Home Theatre Forums
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post #1 of 21 (permalink) Old 2010-04-26, 11:49 AM Thread Starter
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Four-in-ten Canadians retiring with debt

Okay this shocked me (from press release, edited for brevity)

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Four-in-ten Canadians (39 per cent) over the age of 50, who have assets of at least $100,000, retired with some form of debt and one-quarter (22 per cent) entered retirement with a mortgage on their primary residence, according to the first annual RBC Retirement Myths and Realities poll, which examines Canadians' expectations and experiences in retirement.

....

Retirees say they are currently living on 56 per cent of their pre-retirement income, indicating that spending drops significantly in retirement.

"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," added Davies. "For example, our poll found that almost one-in-five retirees spend over $1,000 annually on prescription drugs. Working with a qualified advisor can help you prepare for taxes, inflation and unexpected costs that may impact your retirement goals."

These are some of the findings the RBC Retirement Myths & Realities poll conducted by Ipsos Reid from March 10-19, 2010. For this survey, a national sample of 2,143 adults aged 50 and over with household assets of at least $100,000 from Ipsos' Canadian online panel was interviewed online.
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post #2 of 21 (permalink) Old 2010-04-26, 01:07 PM
 
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I'm not surprised, for all sorts of reasons. One of the more common reasons I see in my circle is a "late" divorce, sometimes followed by a re-marriage that might involve more youngish kids. Things you don't usually financially plan for. Can set you back, especially since any pension/RRSP/etc. income is going to be pro-rated split.

But mainly I'm not surprised because apparently over 40% of working Canadians are in a severe debt/cash-flow problem if they miss 1-2 paychecks. Easy credit/mortgages/etc. and people can live close to the line. If they've done it all their life, it won't end with retirement.
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post #3 of 21 (permalink) Old 2010-04-26, 01:16 PM
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How many people are retiring at 50? Other than 57. Even 55 is a tad early for the majority. Also do you think historically low interest rates have encouraged people to stretch their payments out a little?
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post #4 of 21 (permalink) Old 2010-04-26, 01:40 PM Thread Starter
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Jake,

I'm amazed at how many people I know with six figure household incomes that aren't saving a dime. I'm talking about people who chide me for my ten year old minivan. Many of these people live in nice houses, drive nice cars etc but are living almost paycheque to paycheque.

I think the government has so pandered to retirees that people don't fear the prospect of being poor when they retire because they figure the government will take care of them so why save?


FYI, if you are male and retire at age 55, you have a life expectancy of about 76, females about 80.
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post #5 of 21 (permalink) Old 2010-04-26, 01:51 PM
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if you are male and retire at age 55, you have a life expectancy of about 76, females about 80.
So in order to live longer, do I need to work until age 77?

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post #6 of 21 (permalink) Old 2010-04-26, 01:59 PM
 
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Here is the graph Magnet; from a study of Boeing employees!

http://old.swivel.com/graphs/show/13840305
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post #7 of 21 (permalink) Old 2010-04-26, 02:19 PM
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please lets stick to the topic at hand.
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post #8 of 21 (permalink) Old 2010-04-26, 02:31 PM
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I wonder what kind of debt qualifies as debt in the poll conducted? If I have an outstanding balance of $200 on my credit card, that technically counts as debt, but obviously isn't in the same category as a mortgage.
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post #9 of 21 (permalink) Old 2010-04-26, 02:44 PM Thread Starter
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That's true and could account for the high rate.

My assumption would be a personal loan or mortgage (22% said they had a mortgage) but I guess if your Visa bill isn't going to be paid off at the end of the month, then its a debt.
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post #10 of 21 (permalink) Old 2010-04-26, 03:36 PM
 
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Question

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Originally Posted by hugh View Post
Okay this shocked me (from press release, edited for brevity)
Do you have a link to the full article???

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post #11 of 21 (permalink) Old 2010-04-26, 03:40 PM Thread Starter
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Just Google the survey and you'll find it.
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post #12 of 21 (permalink) Old 2010-04-26, 04:00 PM
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Interestingly enough, a colleague of mine and her husband, are retiring in a couple of years (early - they are about 55 ~ 60 yrs old) despite just buying a more expensive house a few years back. Their kids (2) are still in post secondary education, and she has stated that they are paying the kids' tuition.

She has told me that they are anticipating on using inheritance money to pay off their mortgage, when the time comes for their elderly parents to become deceased.

I have know idea how old the elderly parents are, but talk about count your chickens before...
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post #13 of 21 (permalink) Old 2010-04-26, 05:15 PM Thread Starter
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Wow. I'll never figure people out!
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post #14 of 21 (permalink) Old 2010-04-26, 05:47 PM
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She has told me that they are anticipating on using inheritance money to pay off their mortgage, when the time comes for their elderly parents to become deceased.

I have know idea how old the elderly parents are, but talk about count your chickens before...
Maybe she has a plan that she's not telling you about?

More seriously, having a small mortgage on a large house that you are going to sell after you retire is not a big deal. The assumption is that you will be downsizing into something that will be fully paid for with the sale of the first house.

What would be really interesting is to see the net worth of the retirees.

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post #15 of 21 (permalink) Old 2010-04-26, 06:04 PM
 
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She has told me that they are anticipating on using inheritance money to pay off their mortgage, when the time comes for their elderly parents to become deceased.
We have good friends who are pretty much relying entirely on an inheritance for retirement. I suspect this is far more common than we might know (sure would like to see a survey on it). There are just so many frightening variables with this approach! I'm scared for them.

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