Almost half of retirees are in debt. While their total debt might be lower, older Canadians are accumulating debt at a faster rate than their children and grandchildren. The question is, why this is the first generation of seniors willing to risk their retirement by taking on so much debt late in life? In truth, seniors are facing the pressure to go into debt for three main reasons.
1. Lifestyle and Longevity
For some, debt becomes a way of funding their retirement. A small segment may be using debt to maintain a larger home rather than downsizing and travelling, but for many, debt is funding basic living expenses. A reduction in income without a healthy safety net, in terms of retirement savings or a good pension, means borrowing to pay the rent and eat. As we live longer, any savings we do have may not go far enough.