The majority of retired Canadians hold some form of debt, according to a new CIBC (TSX: CM) poll conducted by Harris/Decima.

The poll reveals that 59% of retired Canadians currently hold some form of debt compared to 76% of all non-retired Canadians.

Although retired Canadians hold less debt than those still working, they are also less likely to be taking steps to accelerate their debt repayment, the poll reveals.

On average, retired Canadians carry 1.65 debt products with a balance (including mortgages, lines of credit, loans and credit cards) compared to 2.64 products with a balance among non-retired Canadians.

However, only 27% of retired Canadians said they have made an extra lump sum payment towards their debt in the past 12 months, lower than the national average of 42% of all non-retired Canadians.

This suggests that retired Canadians may carry debt for longer than they anticipated in retirement, incurring higher interest costs and affecting cash flow.

“While retired Canadians carry less debt than the national average, their debt could be stagnant and may end up costing them more in interest costs over a longer period of time,” says Christina Kramer, executive vice president, retail distribution and channel strategy, CIBC. “You really have to think about the debt you are retiring with because the regular repayments you make will directly affect the discretionary income you have.”

More difficult to pay down debt once you retire

Making the transition to retirement may mean adapting to living on a fixed income. In past CIBC research from the beginning of 2012, retired Canadians identified managing day-to-day expenses as their number one financial priority for this year.

Debt carried into retirement can affect retirement plans and cash flow, as the monthly payments must come from pension earnings or from retirement savings — both of which were intended to serve as retirement income.

“These poll results clearly illustrate the importance of having a good debt repayment strategy in all phases of life, particularly as you approach retirement” adds Kramer. “While it’s a good sign to see that Canadians have made some progress on debt reduction entering retirement, it’s also clear that once you retire with debt, it can be harder to pay off your outstanding balances.”