What Options Are There for Seniors in Debt?

  • By Jillian Taylor-Mancusi, B.A., C.I.R.P

No one envisions their Golden Years deep in debt and worried about money. However, this is becoming a reality for a growing number of seniors retiring with debt. According to Equifax Canada, the number of seniors in debt rose by 6.5 percent in the past year, and a recent poll from CIBC found that 59 percent of Canadians retire with some form of debt.

Dangers of Retirement Debt

Retiring with debt is problematic for a number of reasons. Retirees live on a fixed income, meaning there is a fixed amount of income that does not vary; once it’s gone, it’s gone. Those who enter retirement with a large mortgage payment or credit card debt and spend their retirement savings on debt reduction have less money to cover their living expenses during retirement.

The interest on debt presents another problem. When you can only afford to make minimum monthly payments, a large portion of that payment goes towards interest instead of the balance. This means you’ll be in debt for longer and spend more money on interest.

Options for Seniors in Debt

Getting debt under control before you retire is ideal. However, if you’ve already retired with debt or you’ve accumulated more debt after retirement, there are still options to help you get out of debt.

  • Reduce expenses. A fixed income makes it difficult to pay down debt.  Another way you can help control your debt after retirement is to cut your expenses. This might require some creativity, but it can be done. Taking advantage of retirement discounts, shopping with coupons, eliminating subscriptions and canceling landlines and using cell phones instead are a few examples that add up to big savings.
  • Negotiate lower rates. If you have credit card debt, contact your card provider and ask for a lower interest rate. Be persistent. If you have been a loyal customer or never missed a payment, be sure to mention it.
  • Stop taking on new debt. Most seniors don’t take on debt to fund luxury purchases or extravagances. Many do so prior to retirement to purchase things for their children and grandchildren, whether it’s helping them pay off loans or funding a down payment on a home. If you’re preparing to retire, use your money to save for your pending expenses instead and avoid taking on additional debt.

Retiring with debt can make retirement stressful instead of relaxing. Seniors in debt have options, however, that can help them pay off debt.

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Jillian Taylor-Mancusi, B.A., C.I.R.P

Jillian has worked in the insolvency field since 1992. She is a graduate of the University of Manitoba. She received her Insolvency Counselor’s Qualification Certificate from Ryerson Polytechnic University in 1998, and in 2007 she attained her license as a Licensed Insolvency Trustee. Jillian is a Read More Jillian has worked in the insolvency field since 1992. She is a graduate of the University of Manitoba. She received her Insolvency Counselor’s Qualification Certificate from Ryerson Polytechnic University in 1998, and in 2007 she attained her license as a Licensed Insolvency Trustee. Jillian is a member of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP). She is Past President of the Manitoba Association of Insolvency and Restructuring Professionals (MAIRP).Jillian has held positions on the Armstrong Point Association, Executive of her local EDA Riding Association, Manitoba Highland Dance Association, and the Continuing Education Committee of CAIRP. Previously, Jillian was the Treasurer for the Parent Association at her daughter’s school. Currently, Jillian serves as the Vice Chair for Dressage Winnipeg. Close

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