A majority of retired Canadians are living with debt, according to a survey released by Toronto-based Canadian Imperial Bank of Commerce (CIBC) on Monday.
The poll results reveal that 59% of retired Canadians currently hold some level of debt. Most of that debt comes from credit cards with 39% of retirees surveyed by CIBC said they had credit card debt. The next major source of debt for retirees was lines of credit with 30% of respondents reporting they were carrying such debt, followed by 16% who said they had mortgage debt and another 14% that reported were paying down a loan.
Furthermore, 19% of retired Canadians have seen their debt level increase in the past year, according to the study, followed by another 36% that said their debt has remained the same over the last 12 months.
With so many people struggling with debt, Christina Kramer, executive vice president, retail distribution and channel strategy, CIBC in Toronto, said financial advisors have a role to play in helping their clients get back on track.
“An advisor can help [clients] review all of [their] finances and determine whether there are ways to accelerate [their] debt repayment, such as consolidating [their] debt at a lower interest rate or making slightly higher regular payments,” said Kramer in a statement. “Cash flow is a major component of retirement planning, meaning that even small reductions to [clients’] debt load can make a big difference in [their] monthly cash flow.”
The study also found that retirees are often trying to pay down more than one type of debt. According to CIBC, 37% of Canadian retirees are making more than one debt payment each month.
Retirees in Atlantic Canada are the most indebted with 65% of respondents from the region claiming to have some form of debt, followed by Ontarians at 60% and B.C. residents at 59%.