The Long Dance with Debt

Retiring debt-free was once considered a badge of honour and mortgage-burning parties were milestone celebrations. Handed-down stories of the Great Depression struck a chord of financial fear in next generations. I do not know if those were the good old days, but one thing is clear, things are different now. Last year, Statistics Canada reported that as of 2012, 42.5% of people aged 65+ had debt. That is over a 50% increase since 1999 and the trend shows no sign of abating. Some of the reasons behind this shift include:

• Easy access to credit has grown exponentially.
• Low interest rates (cheap money) have also made spending and debt seem easier.
• Two-thirds of Canadian parents say adult children are cutting into their retirement savings.
• Cultural and lifestyle expectations have evolved. Our view of retirement has started shifting, debt tolerance has increased, and so have expectations for the good life in later years.

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