Seniors and Debt
Various studies over the past few years have shown that consumers in the55-65 and older age group are growing their debt faster than other age groups. This is an unexpected result of these studies and it deserves additional review to determine the causes of this phenomenon. What we would expect to find is the following:
1. Seniors are living longer and are in better health than previous generations. Seniors who planned on a low budget retirement are spending money on a standard of living that they cannot afford. We can debate on the cause of this as being savings for retirement were too low, the income earned on their savings has been very low, CPP and OAS have not kept up with inflation, etc. It really does not matter why.
2. In order to maintain their lifestyle, seniors have been using credit cards and loans to finance the difference between their living expenses and their fixed income. Eventually, they can no longer borrow to finance their lifestyle and reality sets in.
3. In the past, children moved out of the family home, got married and set up their own household. Today, the children are still moving out but they are returning to their parents’ house with increasing frequency, many times with little or no money. This impacts the ability of the parents to save for their own retirement.
4. Living longer seems to work both ways. Not only are our parents living longer but so are their parents. Some families are supporting both of their children and their elderly parents. Not surprisingly, the ability to plan for a comfortable retirement is being compromised.
5. And finally, Scams and Cons. The police are constantly reminding seniors to beware of salesmen trying to sell you a roof or furnace for your house, selling you life insurance or extended product warranties, etc. that are not needed. Be aware of the telephone call from a son, daughter, niece, nephew who tell you their sad tale of financial hardship (none of which is true) and end their story with a request for a small loan. If you give them the loan (which will never be repaid), you can expect another call a few weeks later with another sad tale ending with a request for another loan.
If you ever get a call from the Canada Revenue Agency, a bank inspector or any branch of any government and they ask you to verify the information in their file – ask for their name and their phone number and phone your local police fraud department.
As computer usage increases, everyone has to be aware of scams of Email accounts & Phishing no matter how legitimate the email looks i.e. CRA Logo, etc. If any email asks for personal info, never ever give it! Forward the email to your local Police Fraud department or to info@antifraudcentre.ca. For these and many other reasons, the debt of seniors has been rising. Periodically meet with a financial consultant to review whether or not your income is capable of financing your standard of living. Make changes that are necessary and enjoy a long and healthy life.
Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.
RESPs: Useful Information for Families