Most Canadian homeowners (87 per cent) indicate "being debt-free" is very important to their definition of a successful retirement, according to a survey by Manulife Bank of Canada. This is second only to "having good health" (94 per cent) and slightly higher than "having sufficient income to maintain my current lifestyle" (85 per cent).
And one-half of Canadians — more women (54 per cent) than men (46 per cent) — would find it extremely stressful to reach retirement age with debt still outstanding, found the survey of 2,003 Canadian homeowners between the ages of 30 to 59 with household income of more than $50,000.
Non-financial factors such as "living near family" (62 per cent), "keeping busy with a hobby or volunteer work" (64 per cent) and "having a broad group of friends" (43 per cent) were deemed much less important to a successful retirement than being debt-free.
"For a successful retirement, people need to pay close attention to not just their retirement savings, but debt repayment as well," stated Doug Conick, president and CEO of Manulife Bank of Canada.
Most Canadian homeowners in their 30s (73 per cent) who reported having debt expect to be debt-free before they turn 60, found the survey. That number decreases to two-thirds for homeowners in their 40s. Just one third of homeowners in their 50s expect to be debt-free before they turn 60, with one-fifth indicated they either don't know when they'll be debt-free (14 per cent) or don't expect to ever be debt-free (seven per cent).
Regional similarities and differences
•Almost all regions of Canada rank being debt-free as the second most important factor for a successful retirement, after good health. The exception is Quebec, which also ranks it behind "having sufficient retirement income to maintain my current lifestyle."
•57 per cent of Ontario homeowners and 41 per cent of Quebec homeowners would feel extremely stressed if they reached their planned retirement age with debt still outstanding, compared to the national average of 50 per cent.
•All regions rate living near family as less important to a successful retirement than being debt-free. However, in the three Prairie provinces, homeowners deemed this factor to be even less important than their counterparts across the country (55 per cent versus 62 per cent).
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.