CANADA – A recent poll by CIBC finds that on average, Canadians expect to be debt free by the time they are 56 years old although some Canadians see themselves carrying debt well into their sixties. In addition, nearly a third (29 per cent) say they have no debt while 13 per cent say they will never be debt free.
Highlights of the poll include:
- 56 is the average age Canadians expect to be debt free
- 21 per cent say they will be stuck with debt until they are over 65 years old
- 29 per cent say they are completely free of debt today
- 13 per cent say they will never be debt free
“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,” says Christina Kramer, Executive Vice President, Retail and Business Banking, CIBC. “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.”
More than half of Canadians 65 and over still owe money:
The poll found that over half of Canadians aged 65-plus say they still carry some form of debt today, with credit card debt and lines of credit as the most common types. This group also said they didn’t expect to have their debts paid off until they are 70 years old on average.
“Cash flow becomes a top priority in retirement, and having to make debt repayments out of your income will create a drag on your finances and your ability to have the retirement you want,” adds Ms. Kramer.
Younger Canadians optimistic about debt repayment:
Canadians 25-34 years of age have ambitious plans for debt repayment. This age group on average expects to be debt free by age 47. However, a closer look at those currently carrying debt suggests this may be an optimistic goal, as more than 68 per cent of Canadians 45 and over still carry debt, including 31 per cent who still carry a mortgage.
“What people need to remember when attempting to shorten the road to debt freedom, is that paying down debt is just one part of a broader financial plan that needs to include saving for retirement, managing day-to-day expenses and maintaining an emergency fund,” Ms. Kramer says.
Balancing debt repayment and savings goals:
Of all Canadians with debt, 32 per cent say they have made sacrifices or cut spending to better manage their debt this year and 25 per cent say they have made at least one lump sum payment towards their debt on top of regular payments. This aligns with a CIBC poll conducted last December which found that paying down debt was the top priority for 2015.
“As our poll findings show debt repayment remains a top priority for Canadians, it’s encouraging to see that many Canadians with debt are setting goals and taking action to pay it off,” Ms. Kramer says.
– On June 3 and June 5 2015, an online survey was conducted among 3,013 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error – which measures sampling variability – is +/- 1.80 per cent, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region, and Census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.
