Four-in-ten Canadians over the age of 50, who have assets of at least $100,000, retired with some form of debt, according to a new poll released by Royal Bank of Canada (TSX:RY).

The first annual Retirement Myths and Realities poll, which examines Canadians’ expectations and experiences in retirement, also found that 22% of respondents entered retirement with a mortgage on their primary residence

The majority of retirees (70%) feel it is still important to be able to save part of their income, yet 28% have acquired new credit products since they retired.

“More and more, Canadians are carrying debt into retirement, which is not necessarily a bad thing,” says Lee Anne Davies, head, retirement strategies, RBC.

“Having access to credit in retirement can be beneficial to managing income and cash flow and provide additional flexibility. To help make your retirement dreams a reality, our advice is to start early and prepare a comprehensive financial action plan that will keep you focused on paying down debt and saving, as well as establishing a budget for both your pre- and post-retirement years.”

Inflation and taxes the biggest worries</b

Inflation and taxes are among the top concerns for retirees, with 35% worried that inflation will negatively impact their retirement income, compared to 43% of pre-retirees.

Sixty-two per cent of retirees worry about taxes on their income, with 66% believing the percentage of their income required for taxes will rise in the next 10 years. Retirees say they are currently living on 56% 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,” adds 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.”

The poll was 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.

IE