Every year, a variety of investment firms
provide surveys on a variety of investment topics, and one in particular
focused on Canadians who are near, or already in, retirement as to how they
approach this next stage of their lives. The 2017 investment survey brought
some interesting result that should be useful for everyone to take note of in
terms of household financial planning.
First, it appears that a large part of
currently retired people (about 45%) took early retirement (before the age of
60). About 50% of people in this category retired due to job changes or for
medical reasons. Yet, a good portion of
them also took early retirement because they were financially ready (around 15%)
or wanted to pursue their other interests outside of work (around 14%).
At the same time, those who are not yet
retired but are close to retiring now are overwhelmingly planning to retire at
the age of 65 (about 42%) and older (21%). This, probably, speaks to the changes
in Canadian pension rules extending the official retirement age to 67, which are being discussed currently. Or it may speak to the worsening financial conditions of households,
or poorer expectations about future personal levels of wealth. People, who find
themselves in either of these two categories should seek professional financial
advice.
One of the major factors which affect the
well-being of retirees is debt. The survey showed that 28% of Canadian retirees
carry a mortgage on their principal property into retirement. The survey report
notes that mortgage debt, coupled with the costs associated with home ownership,
can significantly affect one’s retirement plan and limit one’s choices in
retirement. This factor is becoming increasingly important in Canada where the
growth of household debt has recently spiked: total household debt, including
consumer credit, mortgage and non-mortgage loans, as of late 2016 exceeded $2.0
trillion or 167% of household adjusted disposable income in the fourth quarter.
Ukrainian Credit Union Limited
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