Calgarypuck Forums - The Unofficial Calgary Flames Fan Community - View Single Post - Canadians naive about how long they’ll be in debt

chemgear · 12-01-2014, 10:48 AM

Bump for a new FP article today:

http://business.financialpost.com/20...n-they-retire/

About half of Canadians expect to be in debt when they retire

The Manulife survey also found that many still struggle with financial literacy. For example, one-quarter of respondents didn’t consider mortgages or auto loans to be part of their overall debt.

Throw in concerns that Canada’s housing market may be overpriced, and the likelihood that interest rates will rise in the coming years, and several additional levels of risk could be introduced into the financial equation. “Canadians have been lulled into this sense of security because they’re paying 3% or less on their mortgages, but that could change very quickly,” Lunny said.

“People don’t have long memories and if their only reference period is the last five years or so, since the financial crisis, they better be prepared for it.”

Using home equity as a “fallback plan” suggests some Canadians are struggling to balance retirement with paying down debt, Manulife Bank CEO Rick Lunny said in an interview.

“If people think they’re going to take out second mortgages and larger mortgages when they retire, that’s a pretty concerning view and evidence of no financial plan whatsoever,” Lunny said.

Debt problems are nothing new for most Canadians and neither are the surveys which conclude that most people aren’t properly saving for the future.

TD Insurance released findings last month which said 39% of Canadians would run into financial problems if they were forced to stop working due to a sudden illness. The figure rose to 44% for respondents under the age of 35.

12-01-2014, 10:48 AM	#240
chemgear Franchise Player Join Date: Feb 2010 Exp:	Bump for a new FP article today: http://business.financialpost.com/20...n-they-retire/ About half of Canadians expect to be in debt when they retire The Manulife survey also found that many still struggle with financial literacy. For example, one-quarter of respondents didn’t consider mortgages or auto loans to be part of their overall debt. Throw in concerns that Canada’s housing market may be overpriced, and the likelihood that interest rates will rise in the coming years, and several additional levels of risk could be introduced into the financial equation. “Canadians have been lulled into this sense of security because they’re paying 3% or less on their mortgages, but that could change very quickly,” Lunny said. “People don’t have long memories and if their only reference period is the last five years or so, since the financial crisis, they better be prepared for it.” Using home equity as a “fallback plan” suggests some Canadians are struggling to balance retirement with paying down debt, Manulife Bank CEO Rick Lunny said in an interview. “If people think they’re going to take out second mortgages and larger mortgages when they retire, that’s a pretty concerning view and evidence of no financial plan whatsoever,” Lunny said. Debt problems are nothing new for most Canadians and neither are the surveys which conclude that most people aren’t properly saving for the future. TD Insurance released findings last month which said 39% of Canadians would run into financial problems if they were forced to stop working due to a sudden illness. The figure rose to 44% for respondents under the age of 35.