According to Statistics Canada, 42% of seniors have debt, while a 2017 Equifax Canada report found seniors are increasing their debt loads at a much faster pace than other Canadians. With so many retirement-age Canadians carrying increased levels of debt, many will face a choice: accept a reduced standard of living or carry more debt to compensate. This can put a strain on seniors and their adult children who may need to support them.
Why do seniors find themselves in debt?
Increasing debt levels among seniors can be attributed to the following factors:
- The allure of low interest rates
- Trying to maintain a pre-retirement lifestyle
- Wealth transfer to children or grandchildren
- Market downturns
- The cost of long-term care
Are you a senior struggling with debt?
As LITs, we help people who have worked hard their entire lives but now find it difficult to make ends meet on a fixed income.
If you are in your golden years and experiencing debt problems, we can figure it out together. A consumer proposal or bankruptcy could be a solution. There is no limit to when you can file for bankruptcy, as debt can affect us at any age. Meet with a Grant Thornton debt professional for a free, confidential consultation to learn more about your options—so you can focus on your retirement, not your finances.
Is your senior loved one in debt?
While is it difficult to support a loved one at a distance, you can recognize warning signs of debt:
- When you visit or join them on a virtual call, you notice mail piling up. This can indicate they are having trouble making payments on time
- They are relying on credit cards to make day-to-day purchases such as groceries or other basic needs
- They ask you to co-sign a loan or debt, which is a strong indicator that they have bad credit
Explore these suggestions for supporting an aging loved one in debt:
- Help them re-evaluate their monthly budget as they may need to adjust it to reflect changes to their income related to retirement or other major life events
- If they do not want to discuss their income and expenses, you can seek support through a financial planner
- Get educated on current financial scams in Canada through the Canadian Anti-Fraud Centre so that you can help your senior loved ones navigate phone and credit card scams
- For more formal debt relief options, you can reach out to a debt professional or Licensed Insolvency Trustee (LIT)
For more information about how to assist your senior loved ones with resolving their debt, explore this article about discussing finances and debt with seniors.