Retire your debt before you retire from your job
Jeffrey Schwartz, Executive Director of Consolidated Credit Canada, discusses a concerning financial matter, the increasing amounts of mortgage debt held by older Canadians. Leaving the workforce with a balance still owing on your mortgage can ruin your retirement plans in a hurry. If this sounds like your household, Consolidated Credit has helped thousands of Canadians achieve financial freedom and we can help you too, contact our team today.
Last week, I read an excellent article in the Globe and Mail that was just terrible. That’s not as odd as it sounds. The article was wonderfully reported and written, it was just a topic that disturbed and depressed me.
It was about elderly Canadians who are retiring from their jobs before they retire their mortgages. Now, nothing ruins your golden years quite like owing money when you’re no longer working. But that’s exactly what’s happening. And the problem is getting worse.
In 2016, 1.2 million Canadians older than 65 had balances on their mortgages. Five years later, that ballooned to 1.5 million. With rising inflation and a slowing economy, you can bet that number will grow once they add up the 2022 results.
Mortgages are almost always the biggest debt a human being can have. If you leave the workforce without owning your home free and clear, then a chunk of your retirement savings goes to paying off debt instead of enjoying your life.
Now consider this: The average mortgage in Canada is a little over $300,000. Paying off even a portion of that every month will have serious consequences for the elderly. Obviously, many of these seniors will need to sell their homes and move somewhere smaller and cheaper. But these days, with interest rates rising, that’s not so easy. In fact, the Globe and Mail story ends with a financial planner saying, “It’s harder as you get older to get your head around these changes.”
Here’s one change that EVERYONE needs to get their head around: Debt will shorten your lifespan. You shouldn’t live with it, you shouldn’t retire with it, and you certainly shouldn’t die with it. Luckily, the first step is the easiest. And the cheapest. You call Consolidated Credit for a free debt analysis from a trained counsellor.