While most Canadians say they will be debt free before they turn 60, 21% of respondents to a CIBC poll say they will still be carrying debt past age 65.
Of those already over the age of 65, more than half say they are still carrying debt, mostly in the form of credit cards and lines of credit. Most of the respondents in this group said they will likely be debt-free by age 70.
“While Canadians expect to be debt free by age 56 on average, not everyone will hit that goal, which means a significant number of Canadians will still be carrying debt during retirement,” said Christina Kramer, CIBC executive vice-president, retail and business banking.
“As debt repayment goals push closer to retirement age, it puts an added strain on your ability to save for retirement and manage your cash flow after you retire.”
British Columbians also believe they will be debt free by 56 – the same as the national average.
The survey found 13% of Canadians feel they will never be free of all debt.
Canadians aged 18-24 say they believe they will have no debt by the age of 39. Those between 25 and 35 say they will be debt-free by 47. However, this may not be realistic, CIBC said in a press release, as over 68% of Canadians aged 45+ still carry debt, including 31% who still have mortgages.
The types of debt listed included credit cards, mortgages, lines of credit, car loans, student loans and personal loans.
On the same day CIBC released its poll results, Edward Jones announced the results of a study that found Canadians put paying down debt ahead of saving for retirement.
One in three surveyed by Edward Jones said debt repayment is their number one priority. Only 9.4% said retirement savings was their top goal. This is only slightly more than the percentage of respondents – 8% – who said saving for a vacation was their main financial goal.
“It’s a common dilemma for many Canadians – should I pay down my debt, including my mortgage, or contribute to my retirement savings account,” said Edward Jones director of financial and retirement planning Patrick French.
“Unfortunately, there’s no easy or definitive answer. When carefully factored into an overall financial strategy, a lump sum of money can mean an opportunity to pay off debt and also accumulate retirement savings, but Canadians need to strike the balance that is right for them.”
The Edward Jones study found 34% of respondents say their biggest fear is having to work into retirement. When the previous study was conducted in 2010, 28% had the same fear. In 2006, 23% of those surveyed felt the same way.
“The uptick doesn’t surprise me,” French said.
“Over the past ten years, Canadians have experienced an economy that has gone through several changes, and for many, the fear of the unknown can seem quite overwhelming.
The study also found 70% of Canadians had not calculated the amount of money they will need for retirement.
