Financial Planning Standards Council and Credit Canada shed light on how Canadian seniors can avoid tarnishing their golden years
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, according to a national survey commissioned by Financial Planning Standards Council (FPSC) and Credit Canada in time for June, which is Seniors’ Month.
The two non-profit organizations continue their series on the financial health of Canadians by co-sponsoring the Seniors and Money Report. The report is a Leger poll of 1,000 Canadians 60 and older that probes the issues aging Canadians face when it comes to debt, income, financial planning and work.
Financial worries of seniors
The survey reveals that nearly half of people 60 and older say they have at least one financial concern.
One-in-four seniors fear they will run out of money before they die, while an equal amount (25%) fear they will not be able to pay for long-term care. Other fears include never being able to pay off their debt, not having enough money to retire, having to sell their house or needing to depend on their children for financial support.
Canada’s working seniors – Has retirement become a luxury?
One-in-five Canadians are still working past age 60, including six percent of those 80 and older. The reasons for doing so vary:
Three-in-10 can’t afford retirement (including 13% who say they’ll never be able to afford it)
One-in-eight have too much debt
Nearly three-in-10 (28%) don’t have enough savings
12 percent are still helping their children financially
On the positive side of the ledger, nearly a third continue to work because they simply love their job
From credit cards to car loans, more than half (56%) of Canadians age 60 and older carry at least one form of debt, with a quarter (26%) carrying two or more types of debt. Credit card debt leads the way (32%), followed by lines of credit (23%), mortgage debt (19%) and auto loans (14%). Surprisingly, 35% of seniors age 80 and older are carrying at least one form of debt, including credit card debt (24%) and, perhaps most unexpectedly, a car loan (9%).
The decline of company pension plans
The report illuminates the beginnings of a generational shift in how seniors are supporting their retirement. A gap is beginning to show with respect to those who list a company pension plan as a source of income. Fifty per cent of those 80 and older list a company pension plan as a source of income, while the percentage is 41% among those 60-69.
Here are some additional findings:
Men (vs women) are significantly more likely to be working, have a company pension plan, or have investments as their current source of income.
Four-in-ten of those who have a company pension as a source of income also hold investments.
Three-in-ten Canadians age 60 and older with children are supporting them financially (including 22% of those 80 and older)
Nearly a quarter of homeowners 60 and older have a mortgage.
Overall, Canadians 60 and older are most likely to be supported by the government (73%) than any other form of income.
“Times are changing, and many seniors haven’t planned for or anticipated the life and financial circumstances they now are facing,” says author, personal finance educator and FPSC’s Consumer Advocate, Kelley Keehn. “Some seniors may feel embarrassed, or that it’s too late to ask for assistance when it comes to their finances. Truthfully, it’s never too late to get started. A CFP® professional will help you reach your golden goals.”
“Debt later in life can be frightening. We are seeing a good deal of seniors in financial jeopardy and stressed out about their debt situation,” states Laurie Campbell, Credit Canada CEO. “There is no shame in seeking assistance and taking control of your finances to enjoy the later chapters of your life. A non-profit credit counsellor will help you develop a simple and straightforward plan to tackle debt, so you don’t have to face it alone.”
The full results of the Seniors and Money Report can be found here.