Canadians holding debt are actively contributing to their retirement savings, but the more debt products they hold, the less they are able to put away for the future each month, according to a new CIBC poll conducted by Harris/Decima.

Among those Canadians holding debt, 53% say they have made a contribution towards their retirement in the last 12 months, in line with the broader national average of 49% of Canadians who say they’ve made some form of retirement contribution in the same time period.

However, among those actively contributing to their retirement, the amount Canadians say they are putting away each month declines with each additional debt product they carry a balance on:

  • one debt product — median contribution of $500 per month contributed to retirement savings
  • two debt products — median retirement contribution of $240 per month
  • three or four debt products — median retirement contribution of $200 per month.


“These poll results clearly illustrate the connection between good debt management and your ability to save for your long term financial goals,” says Christina Kramer, executive vice president, retail distribution and channel strategy, CIBC. “Planning for a successful retirement involves more than just having a regular savings plan. It also requires a strategy to pay down debt, reduce interest costs, and redirect those funds towards long term savings.”

Past CIBC research has shown the likelihood of holding debt peaks at age 45, and then declines. As Canadians pay down their debt they have an opportunity to direct more of those funds towards retirement. Kramer notes there is an opportunity for Canadians to look at their finances holistically to accelerate this curve.

“A positive finding from this poll is that Canadians appear to be very aware of the importance of putting away money for the long term, however balancing that against the immediate need to repay debt can be a challenge,” adds Kramer. “The message is not that holding any debt will negatively affect your future, it’s that debt repayment needs to be managed appropriately to open up opportunities to accelerate retirement savings for the future.”

Advice on Managing Debt

  • For clients focused on paying down debt, Kramer offers these debt management tips:make lump sum payments to higher interest debt first to reduce interest costs;
  • work with an advisor to structure debt to minimize overall interest costs by utilizing debt products that offer a lower interest rate and having a strategy to pay these balances down in a specific time frame;
  • setting debt payment seven slightly higher than the required payment can reduce overall interest costs and help clients become debt free faster.


“There is a clear benefit to sitting down with an advisor and working through your plans on both the savings and debt management side of your finances to help you achieve what matters to you in the long term,” adds Kramer.