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can you retire with debt

Can you retire with debt? Introduction

Can you retire with debt? Retirement used to be so simple. You worked until the age of 65 and then retired with your defined benefit pension plan and sailed off into the sunset. Those days are gone and retirement is now very different.

Firstly defined benefit pension plans are rapidly disappearing from the landscape. We’re living longer than ever before and in many cases now have to fund 30+ years of retirement. And many seniors are dragging a debt load with them into retirement. According to Statistics Canada among those 55 and over:

33% of those retired still have debt
66% of the not-yet-retired still have debt

Can you retire with debt? Most people cannot

As a result, many Canadians are continuing to work beyond the age of 65, although they may retire several times before ultimately retiring from all income generating activity. It’s quite common these days for someone to retire and in short order, miss the income, miss the stimulation, miss the sense of accomplishment, miss the sense of identity that can be derived from being in the workforce or just wants to get out of the house.

Although they may not want to go back to the corporate rat race on a full time basis, consulting, contracting or part-time employment are all options. Some retired seniors even open their own businesses. It’s quite possible to retire three, four or five times before retirement becomes your full-time vocation. Can you retire with debt? Most people cannot.

Can you retire with debt? Delaying retirement makes economic sense

Considering how many seniors are still in debt, delaying retirement makes good economic sense.

Canada Pension Plan (CPP) creates great incentives for you to delay your retirement past the age of 65. As of 2016, if you delay receiving CPP until the age of 70 you’ll receive 42% more in your monthly benefits than if you’d retired at age 65. Conversely, if you start receiving the CPP at age 60 your monthly benefits will be 36% less than if you’d waited to start your benefits at age 65.
Old Age Security (OAS) also provides incentives to delay retirement past the age of 65. If you wait until the age of 70 to receive OAS benefits, you’ll receive 36% more in average monthly benefits than if you’d started at age 65.

So can you retire with debt? You can try, but delaying retirement makes good economic sense.

Can you retire with debt? Let us help you retire debt free

How many times will you retire? Will you be like many Canadians who go back to work fulltime or part-time? Regardless of how many times you retire or at what age, it’s important that you retire debt free to lead a more comfortable life. A professional trustee can help you solve your financial problems and give you peace of mind in retirement. Ira Smith Trustee & Receiver Inc. can help you get back to debt free living Starting Over, Starting Now. Give us a call today.

Will I ever be able to retire?” is a common question amongst the Boomers generation. Last week we discussed the problem of living paycheque to paycheque. This week we’ll be addressing whether or not you will ever be able to retire. That’s right; there is a distinct possibility that many of you may never be able to retire. A new HSBC study reports that 17% of Canadians believe that they will never be able to retire, while a growing number of Canadians believe that retirement is getting further and further away and therefore the answer to their will I ever be able to retire question is NO.

40% say they did not prepare well enough and of that group that doesn’t have enough money, 40% only came to the realization after they retired
72% of retirees experienced a fall in income, yet only 48% had a similar drop in spending
14% of people were funding a dependent in retirement while 32% of people not fully retired made the same claim

A BMO study reports that Baby Boomers are about $400,000 short of their retirement goals. Another reason why the answer to their will I ever be able to retire question is no. The money has to come from somewhere and as a result the BMO survey reports that:

71% of Boomers plan to work in retirement and therefore feel that the answer to the will I ever be able to retire question will never be yes
44% will sell off their valuable goods such as antiques or possessions they don’t use in order to raise funds otherwise the answer to their will I ever be able to retire question will never be yes
33% plan to sell their home to help make ends meet otherwise the answer to their will I ever be able to retire question will always be no

According to Sun Life Financial’s annual Unretirement Index poll:

Only 27% of respondents believe they’ll retire by 66, a nearly 50% decline from the previous year
Economic uncertainty and poor financial planning are being cited as key reasons why a majority of Canadians surveyed say plans to retire by age 66 are more of a fantasy than a reality and their answer to the will I ever be able to retire question is no

Are you one of the many Canadians who haven’t been able to save for retirement? Is life a financial struggle to pay the monthly bills? Are you relying on credit to maintain your lifestyle? Are you forced to use expensive credit, such as an online bad credit loan or a bad credit line of credit? Do you feel that it is no longer worth spending your time thinking about the will I ever be able to retire question because your reality is too depressing?

If so, you are living in a financial danger zone. Consult a professional Trustee as soon as possible. Contact Ira Smith Trustee & Receiver Inc. for sound advice and a realistic financial plan to turn your life around. Starting Over, Starting Now we can solve your financial problems and put you back on track to living a debt free life. We want to help you answer a resounding YES to your will I ever be able to retire question.