Is Retirement a New Luxury? (Hint: It Shouldn't Be)

Written by Kelley Keehn

Tuesday, June 19th, 2018

Is retirement a new luxury? (Hint: by the end of this article you'll find out it doesn't have to be.)

According to a new national survey1, running out of money before they die and not being able to pay for long-term care top the list of financial fears of seniors. The national survey was commissioned by the Financial Planning Standards Council (FPSC) and Credit Canada in time for June, which is Seniors' Month.

Some Important Findings:

1 in 5 Canadians are working past age 60, including 6% of those 80 and older. The reasons vary from too much debt, too little savings and helping out their kids. On a positive note, 1 in 3 are still working because they love their job!

More than half of seniors have at least one form of debt (35% of them are 80 and older), and 26% carry two types of debt.

Debt Danger:

Credit cards, with their high interest rates, and lines of credit, which bring a risk of interest-only payments that never pay off the debt, lead the way in terms of potential debt dangers.

Are You Pre-Retirement? Some Things to Consider

  • Your brain is hard-wired for instant gratification. Spend 5 minutes a day getting to know the future you — envision yourself in 10, 20 and 30 years, and consider how much money you'll need.
  • Open a TFSA or RSP even if you don't have much money now. The act will engage and encourage you to start saving, even if it's just a small amount to start.
  • Don't leave money on the table with your employer — make sure you're taking full advantage of your pension plan or other incentives.

Are You Near Retirement? Some Things to Consider

  • Consider an encore career. Turning your hobby into cash can help ensure you don't run out of money in retirement.
  • If you have debt, make a plan to get out of it ASAP. There are tools online that can help you crunch the numbers.
  • Stats Canada states that shelter, transportation and food are the three biggest costs for Canadians. Where can you get creative in these areas?

Source:

1The Seniors and Money report was commissioned by Financial Planning Standards Council (FPSC)and Credit Canada for June, which is Seniors' Month.

 

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