Nearly one in five retired Canadians say their debt level has risen in
the past year
TORONTO, July 15, 2013 /CNW/ - A new CIBC (TSX: CM) (NYSE: CM) Poll conducted by Harris/Decima reveals 59 per cent of retired Canadians say they are carrying debt. Among this group, 19 per cent say the amount of debt they are carrying has increased in the past 12
months.
Highlights of the poll include:
-
59 per cent of retired Canadians said they currently have debt, compared to the
national average of 71 per cent across all age groups
-
Among retired Canadians with debt, 19 per cent say in the past 12 months their level of debt has increased, while
another 36 per cent say their debt levels have stayed the same -indicating more than half (55 per cent) of all retired Canadians with debt missed an opportunity to pay it
down over the past 12 months
"When you reach retirement, you should be able to enjoy the money you
have worked hard to save over your lifetime," said Christina Kramer,
Executive Vice President, Retail Distribution and Channel Strategy,
CIBC. "Canadians carrying debt into retirement may miss out on the full
benefit of their retirement savings because they are using some of it
to make their monthly debt payments."
While fewer retired Canadians are carrying debt compared to the national
average across all age groups, paying down your debt becomes more
difficult after retirement when many Canadians transition to a fixed
income.
Retirees Carrying Debt on More than one Product
With more than half of all retired Canadians managing debt, the poll
also reveals that 37 per cent of retired Canadians are juggling two or more debt payments a month.
Among retired Canadians with debt:
-
39 per cent say they are carrying debt on their credit card
-
30 per cent say they are carrying debt on their line of credit
-
16 per cent say they are carrying debt on their mortgage
-
14 per cent say they are carrying debt on their loan
"With today's low interest rates, there is an opportunity for retired
Canadians to review their monthly cash flow and make progress in paying
down their debt. Although future interest rate changes can't be
predicted, being on a fixed income means any interest rate increases
will have a greater impact on your monthly cash flow for those retired
Canadians carrying debt," explained Ms. Kramer.
"An advisor can help you review all of your finances and determine
whether there are ways to accelerate your debt repayment, such as
consolidating your debt at a lower interest rate or making slightly
higher regular payments," adds Ms. Kramer. "Cash flow is a major
component of retirement planning, meaning that even small reductions to
your debt load can make a big difference in your monthly cash flow."
Advice on Managing Debt for Retired Canadians:
For Retired Canadians focused on paying down debt, Ms. Kramer offers the
following advice:
-
With many retired Canadians juggling more than one debt payment a month,
an advisor can help to structure your debt to minimize overall interest
costs by utilizing a debt product with a lower interest rate
-
Make lump sum payments to higher interest debt first to reduce interest
costs
-
While interest rates remain near historic lows, don't ignore the long
term benefits of making small adjustments to your payment today.
Setting your debt payment even slightly higher than your required
payment can reduce your overall interest costs and help free up some of
your monthly cash-flow
-
Use free budgeting tools to help you stay on budget - CIBC CreditSmart
available to CIBC credit card holders allows you to set customized
budgets and receive spend alerts if you exceed your planned budget for
the month, helping you stay on top of your everyday budgeting and
saving
KEY POLL FINDINGS
Percentage of Retired Canadians currently managing some form of debt, by
region:
|
|
National
|
59%
|
Atlantic Canada
|
65%
|
Quebec
|
58%
|
Ontario
|
60%
|
Manitoba and Saskatchewan
|
58%
|
Alberta
|
53%
|
British Columbia
|
59%
|
|
|
Among Retired Canadians that said they are currently managing debt,
percentage that say their debt has increased or stayed the same in the past 12
months, by region:
|
|
National
|
55%
|
Atlantic Canada
|
82%
|
Quebec
|
50%
|
Ontario
|
54%
|
Manitoba and Saskatchewan
|
35%
|
Alberta
|
52%
|
British Columbia
|
52%
|
|
|
Among Retired Canadians that said they are currently managing debt,
percentage that say they are juggling two or more debt payments each month, by
region:
|
|
National
|
37%
|
Atlantic Canada
|
42%
|
Quebec
|
38%
|
Ontario
|
36%
|
Manitoba and Saskatchewan
|
36%
|
Alberta
|
35%
|
British Columbia
|
34%
|
*Each week, Harris/Decima interviews just over 1000 Canadians through
teleVox, the company's national telephone omnibus survey. These data
were gathered in subsamples of 766 retired Canadians between March 28
to April 7, 2013 and 373 retired Canadians between April 25 - 28, 2013.
Samples of this size have a margin of error of +/-3.5%, 19 times out of
20 and +/-5.1%, 19 times out of 20 respectively.
CIBC is a leading North American financial institution with nearly 11
million personal banking and business clients. CIBC offers a full range
of products and services through its comprehensive electronic banking
network, branches and offices across Canada, and has offices in the
United States and around the world. You can find other news releases
and information about CIBC in our Press Centre on our corporate website
at www.cibc.com.
SOURCE: CIBC
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