Personal Finance:
If you’re still steeped in debt, then retiring might not be the best option. This is a bold suggestion prescribed by Chevreau in his article. Although carrying debt into retirement is a modern trend for seniors nowadays, it should ideally be the last resort – regardless of whether or not they have investments of any sort.
Debt in Retirement
However, the alarming truth remains: a significant number of retirees are currently in debt. Some of these debts were accrued even before retirement, while some during retirement. This means that seniors who retire debt-free are not exempt from debts, whereas those who retire with debts may end up having even more debts!
What does this say about retirement? Although seniors may retire out of their jobs without debt, certain circumstances might eventually lead to more debts anyway. In the case of James and Jane Kennedy, the renovations done to their home meant more debts.
Natural for Baby Boomers
This dangerous trend among seniors in Canada is something that the Baby Boomer generation has accustomed them to. Born between 1946 and 1964, many baby boomers grew up with credit cards, loans to pay for their college education, and mortgages that they can take anytime. As such, this generation, unlike the ones that came before it, is less fearful of debt. With many seniors retiring at an early age of 55, the problem is magnified. By the time they reach their mid-80s or earl 90s, they might end up being flat broke. An average Canadian living to be 95 years old, as a matter of fact, has a 90% chance of being broke. Ironic as it may sound, the idea of longevity is synonymous to poverty.
Managing Debts for Retirees
If you’re preparing for retirement, then managing your debts and finishing them off well before you retire is a great idea. This includes your mortgage payment, the management of which can be done with the help of an efficient mortgage broker. A reliable broker will ensure that you will get only the best loans and mortgages that you can pay relative to your income.
You shouldn’t risk your chances and ‘live dangerously’ once you retire. For such reason, you must carefully plan your finances well before your retirement age.
