A recent survey by Fidelity Investments has shed light on a growing trend among Canadian retirees: carrying mortgage debt into their golden years. The Fidelity Retirement Report, released this week, indicates that 22 percent of retired Canadians still have an active mortgage, and more than half of these individuals do not anticipate paying it off within the next decade.
Rising Debt Among Seniors
The survey, which polled 2,000 Canadians with a median age of 62, highlights the increasing financial burden on retirees. According to the report, over 20 percent of retirees and 12 percent of pre-retirees believe they will never be able to fully repay their mortgage. This trend is driven by the rising cost of living, later-life debt accumulation, and a persistently expensive housing market.
Statistics Canada data shows that the proportion of senior families carrying debt rose from 27 percent in 1999 to 42 percent in 2016. Mortgage debt accounted for roughly two-thirds of the overall increase in senior debt during that period. Since then, economic challenges have only intensified.
Economic Uncertainty Weighs on Retirement Savings
In a separate survey by EQ Bank, over half of Canadian homeowners aged 45 and older reported that their retirement savings have been negatively affected by economic uncertainties over the past year. These uncertainties include the U.S. trade war, which has battered Canada's economy, and the Iran conflict, which has driven fuel prices higher.
Inflation tops the list of retirement concerns for Canadians, with 80 percent of respondents in the Fidelity poll citing it as a major worry. This is followed by turmoil in global politics (60 percent) and a weaker Canadian economy or recession (60 percent).
Conservative Investment Shifts
More than one-third of retirees have moved their assets into conservative investments such as guaranteed investment certificates (GICs), bonds, and cash due to concerns about global conflicts and stock market volatility. Additionally, nine in ten Canadians expect to rely on government programs for retirement income, but far fewer believe these programs will remain as generous as they are today.
Implications for the Future
The findings underscore a growing financial strain on older Canadians, with many facing the prospect of carrying mortgage debt indefinitely. As the population ages and economic pressures mount, the trend of retiring with debt is likely to become more common, prompting calls for policy adjustments and financial planning strategies.
