There are various reasons why baby boomers debt is so high. According to the 2011 Canadian Census, 9.6 million persons, or close to 3 Canadians out of 10 (29%), were baby boomers. Baby Boomers, the generation born between 1946 and 1964, face challenges unlike any other generation before them. Sometimes referred to as pre-seniors, the sandwich generation (taking care of children and parents), and the club sandwich generation (taking care of grandchildren, children and parents), many Baby Boomers are finding themselves ill prepared for retirement.
They expected to have their children off their payroll prior to retirement and never anticipated the financial burden of caring for aging parents and sometimes their grandchildren. Their defined pension plans have all but evaporated and they are left with huge financial responsibilities and a diminishing income. And sometimes, life just got in the way due to divorce or illness. These are many reasons why baby boomers debt is so high.
According to a BMO study:
- Baby Boomers are about $400,000 short of their retirement goals.
- The average Baby Boomer feels they need about $658,000 to retire on, not including Canada Pension Plan and Old Age Security money they’ll also get coming to them. However, the average amount they have saved so far is about $228,000.
- 71% Baby Boomers said they plan to work part time in retirement to earn extra income.
- 44% will sell off their valuable goods, such as antiques or possessions they don’t use.
- 33% plan to sell their home to help make ends meet.
The Canadian Payroll Association (CPA) came to similar conclusions. Their study showed that the long term financial outlook for many Canadians is troubling because there is a huge gap between how much money people say they will need to retire and how much they are actually saving for retirement. In addition 40% of employed Canadians still are spending all of or more than their net pay and many are living paycheque to paycheque. Many Baby Boomers of retirement age are retiring with alarming levels of debt, or not able to retire because of their baby boomers debt.
If you’re a Baby Boomer with serious baby boomers debt issues, contact Ira Smith Trustee & Receiver Inc. today. Starting Over, Starting Now we will evaluate your situation and offer practical advice so you can clearly see the way to move forward.