More than one-third (34 per cent) of retirees aged 55 or older — whether single or a couple — have mortgage or consumer debt, according to Statistics Canada. The median debt held by this group was $19,000.
The incidence of debt was much higher among those who had not yet retired. Of those, two- thirds had mortgage or consumer debt and the median debt load was $40,000, according to "Retiring with debt" in the April edition of Perspectives on Labour and Income.
Among retired people with debt, 25 per cent owed less than $5,000, 32 per cent owed between $5,000 and $24,999, while 26 per cent owed between $25,000 and $99,999. At the high end of the debt scale, 17 per cent owed $100,000 or more.
Retirees who owned homes, had higher household income, higher levels of education and better financial knowledge were more likely to have debt. This group was also more likely to have solid finances and higher net worth or lower debt-to-asset ratios, said Statistics Canada.
Divorced people (43 per cent) who were retired had the highest incidence of debt. They were followed by people in a couple (35 per cent), those who never married (30 per cent) and widows or widowers (28 per cent). Also, divorced retirees had the lowest annual median income and net worth, compared with all other groups.
Retirees with debt had a median annual household income of $42,000 and a median net worth of $295,000. Overall, their debt was equivalent to about seven per cent of their total assets.
Older retirees were less likely to have outstanding debt — 48 per cent of those aged 55 to 64 had some debt compared to 20 per cent of retirees 75 and older.
The majority of retirees reported that their finances were where they expected them to be prior to leaving the workforce.
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