Canadians retiring at 58; a third in debt

Expert urges we plan differently More women want to be debt-free

Canadians are retiring at age 58, on average, and 48 per cent don’t believe it’s necessary to retire debt- free, the Royal Bank’s 15th annual RRSP survey suggests.

While the survey conducted by Ipsos-Reid found that 85 per cent of working Canadians polled believe it’s important to have their debt paid off before retirement, 33 per cent of retired Canadians have debts, with an average debt load of about $ 35,000, the Royal Bank of Canada 0said.

“ We seem to be observing an emerging mindset, where many Canadians do not see the need to retire their debt before they themselves retire from work,” said Dave Richardson, vicepresident of RBC Asset Management Inc. “ If this is in fact a new reality, Canadians will need to strategize and plan for their retirement differently to ensure they can achieve their desired lifestyle during retirement.” The survey notes that of those who are retired with debt, the most common liability they hold is either mortgage or credit card debt ( both at 42 per cent). But a substantial number also hold a line of credit ( 6 per cent), business loans ( 5 per cent) and car loans ( 5 per cent). One in seven, or 14 per cent, have debts in excess of $ 100,000. Among respondents retired with debt, 44 per cent said they never planned on paying off their debt before they retired and half, 51 per cent, incurred their debt after they had retired. But 67 per cent of respondents who incurred debts after retiring said they never thought they’d have to. Women were more likely than men to believe it’s essential to be debt- free in order to retire: 57 per cent versus 46 per cent. As age rises, the belief that it is not essential to retire debt- free also rose: 36 per cent among 18to 34-year-olds, 49 per cent among 35- to 54- year- olds, and 65 per cent among those age 55 and over. The report also says 20 per cent of retired Canadians supplement income with work. Those who retired with debts are more likely to work occasionally than are those who do not have debts: 35 per cent versus 13 per cent. The Ipsos Reid/ RBC poll was conducted Nov. 11 to 21. A representative randomly selected sample of 1,250 adult Canadians was interviewed by phone. The results are considered accurate within 2.8 percentage points, 19 times out of 20.