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Among retired people with debt, 17 percent owed $100,000 or more.
Ottawa (27 April 2011) – A new survey from Statistics Canada suggests that 34 percent of retired individuals aged 55 and over, whether single or in a couple, held mortgage or consumer debt. The median amount owed by these individuals was $19,000.
The incidence of debt was much higher among those in the same age group who had not yet retired. Among pre-retirees aged 55 and over, two-thirds held mortgage or consumer debt and their median debt load was $40,000, double that of retirees.
Among retired people with debt, 25 percent owed less than $5,000, 32 percent owed between $5,000 and $24,999, while 26 percent owed between $25,000 and $99,999. At the high end of the debt scale, 17 percent owed $100,000 or more.
Retirees who owned homes or who had higher household income, higher levels of education and better financial knowledge were most likely to hold debt.
On the other hand, these same groups tended to have solid finances. Home ownership, income and education were all associated with higher levels of net worth and lower debt-to-asset ratios.
Divorced people (43 percent) who were retired had the highest incidence of debt. They were followed by people in a couple (35 percent), those who never married (30 percent) and widows or widowers (28 percent). Also, divorced retirees had the lowest annual median income and net worth, compared with all other groups.
Older retirees were significantly less likely to have outstanding debt. Just under one-half (48 percent) of retirees aged 55 to 64 had some form of debt, compared with 20 percent of retirees aged 75 and over.
The majority of retirees reported that their finances were what they had expected them to be prior to retirement. They also reported that their income was sufficient to cover expenses and that they were able to stay on top of bills and keep up with their financial commitments.
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