As approximately five million Canadian seniors and boomers approach retirement, there is a real fear that they may not have enough money saved to make retirement comfortable.

A recent report released by the Vanier Institute of the Family stated that “the insolvency rate for those over 55 has been on a consistent upward trend. Seniors were 17 times more likely to become insolvent in 2010 than they were in 1990, according to the report on the current state of family finances.

Real estate is a big part of the story. Twelve per cent of people over 65 owed money on mortgages in 2012, up from eight per cent in 2012 – and the average mortgage debt rose to $125,100 from $77,100.”

There are several reasons debt has been increasing in seniors:

People in their 50s and 60s often support their parents and their children by paying student debt for their kids and having their parents move into their basement.

Many parents pay for adult children’s expenses, such as wireless phone bills. If they have grandchildren, they cover the costs of sending them to swimming lessons or camps

Many people sit on a valuable asset they refuse to liquidate, relying on reverse mortgages or lines of credit to help with cash flow. Others try to cut back on daily living costs, leading to stress and health problems

There are also factors such as increased medical and health care costs, decreased mental fitness, depression and loss of a spouse.

Retiring with debt can be a stressful time. It’s important to know your current financial situation and how much money you realistically need for retirement. If you are close to retirement (or have already retired) and your financial situation is causing you stress, consider booking a free consultation with one of our Trustees in Bankruptcy. We can provide solutions to deal with your debt load, stop the interest and phone calls, and your pensions and RRSPs may be protected.

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