Struggling Financially Through Your Golden Years?

For many Canadians, their retirement years are supposed to represent their golden years where they can enjoy the fruits of a lifetime of work and labour. However, for an increasing number of seniors or those approaching retirement age, the golden years have become a tarnished chapter in their lives as they are making up a growing proportion of Canadians filing for either a bankruptcy or Consumer Proposals.

There are many reasons for this trend. But at the forefront of these, is the fact that more seniors are entering retirement age still carrying debt. In many cases, that debt can be quite significant. This can be attributed to the current environment of low interest rates. This debt, when combined with the increased difficulty in being able to paying down debt on a reduced fixed retirement income, can often lead to financial stress and difficulties.

Another reason many seniors may be struggling with unmanageable debt, is unplanned early retirement due to ill health or the increased expenses during retirement due to ill health. In both situations, out of pocket expenses relating to serious health issues such as a stroke, a heart attack or home care and / or long-term care are quite daunting. In addition, if this occurred prior to a person’s planned age of retirement, it adds the additional stress of reduced household income.

Other often cited reasons for the increase in insolvency filings by seniors are unplanned setbacks relating to helping out family or an adult child in need.

It is important to recognize that there are many reasons for this rise in insolvency filings by seniors and that a lot of these factors are beyond an individual’s control. However, regardless of the reason, financial difficulties are extremely stressful and often overwhelming.

The best way to guard against falling into financial difficulties in later years, is to take the time to sit down, evaluate your personal or household finances and develop a comprehensive long-term plan. A good understanding of one’s income and expenses is essential. An estimate of income needs to meet expenses during retirement needs to be established, thus translating into a plan of how much savings are required to achieve the necessary living income. Finally, a budget needs to be developed to take into account the amount of savings required.

For those seniors who have accumulated too much debt because of any or all of the factors mentioned above, it is a good idea to get in contact with a Licensed Insolvency Trustee to put a plan in place which will allow you to get back on track and make those retirement years golden again. At MNP, we offer a free, no-obligation initial consultation, will review all options available to an individual based on their unique financial situation so as to minimize the stress associated with overwhelming debt and choose a manageable route to a strong financial future.