Retirement Debt
Retirement Debt
This article got me thinking about the FWF community.
I figure FWF members are not typical of this demographic.
Most retired Canadians carry some debt, poll finds
The attached poll attempts to capture this.
If you are retired do you carry any debt.
Voluntary means you do but could afford to pay it all off any time you wanted but you have a financial management reason for carrying it.
Monthly credit card balances do not count if they are ordinarily paid off each month.
I figure FWF members are not typical of this demographic.
Most retired Canadians carry some debt, poll finds
The attached poll attempts to capture this.
If you are retired do you carry any debt.
Voluntary means you do but could afford to pay it all off any time you wanted but you have a financial management reason for carrying it.
Monthly credit card balances do not count if they are ordinarily paid off each month.
" A verbal contract isn't worth the paper it is written on " Samuel Goldwyn
"The light at the end of the tunnel may be a freight train coming your way" Metallica - No Leaf Clover
"The light at the end of the tunnel may be a freight train coming your way" Metallica - No Leaf Clover
Re: Retirement Debt
We have absolutely no debt, own our home, and have an Equifax FICO score of 845 as of 2011 02.
- stardancer
- Contributor
- Posts: 202
- Joined: 08 May 2009 21:01
Re: Retirement Debt
I can't imagine being retired and having debt. In fact, my retirement gift to myself was a brand new car (in 2005) and we wrote a cheque for the full amount.
Things keep coming up in retirement, just as they do during your working life. It's nice to have the option of paying for them or not.
Things keep coming up in retirement, just as they do during your working life. It's nice to have the option of paying for them or not.
Re: Retirement Debt
I have no debt but I won't know if I'm currently retired or unemployed until I'm 65.
newguy
newguy
Re: Retirement Debt
We have zero debt, own our home, and I neither know nor care what my credit score is.We have absolutely no debt, own our home, and have an Equifax FICO score of 845 as of 2011 02.
Re: Retirement Debt
I'm retired, wife still works we have no debt at the moment. I have a substantial amount of margin and a large LOC, if we're going to make it to the 99th percentile I'm going to have to load up on debt. My timing has never been good, maybe this time, just one time, off to poker now.
This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed
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- Location: SW Ontario
Re: Retirement Debt
Retired since 1987 - absolutely no debt. Actually, we have used our LofCs as a source of funds for purchase of Canadian investments for many years but always with the proviseo that we have the cash to fully cover in a high interest account somewhere. Rightly or wrongly I have always believed that this practice (which permits all interest charges claimable comes tax time) represents one of the few real perks left for we members of the great unwashed !
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- Veteran Contributor
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- Joined: 31 Dec 2006 10:49
- Location: Southern Ontario
Re: Retirement Debt
The article and survey don't carry much weight if they don't distinguish between good and bad debt.
To me, they're alluding to consumer debt, and I wonder if the banks are worried about massive write downs?
To me, they're alluding to consumer debt, and I wonder if the banks are worried about massive write downs?
- westinvest
- Contributor
- Posts: 898
- Joined: 22 Feb 2005 01:17
- Location: Okanagan
Re: Retirement Debt
An example of voluntary debt: my wife bought a Honda Fit, and the dealership was advertizing 0.9% financing for 4 years. We tried several times to obtain a discount on the purchase price in lieu of the low cost financing, but they refused (don't want to set a precedent for discounts),so we invested the funds that would have paid for the car and took the financing for 4 years. The ROI on the investment has been about 3% (GIC rate at the time) so after tax she is ahead of the game - and has helped build her own credit rating.
Re: Retirement Debt
Got rid of the small mortgage upon downsizing in 1997.
Retired in 2002.
Got rid of car leasing debt upon selling the BMW convertible in 2005.
Have a rolling CC debt that is paid off each month.
Retired in 2002.
Got rid of car leasing debt upon selling the BMW convertible in 2005.
Have a rolling CC debt that is paid off each month.
For the fun of it...Keith
Re: Retirement Debt
No mortgage...no debt.....charge virtually everything on TD Visa 'Infinite' travel card, and pay it off in full each month.
Exit, pursued by a bear.
William Shakespeare, Stage direction in "The Winter's Tale"
William Shakespeare, Stage direction in "The Winter's Tale"
Re: Retirement Debt
Could almost say I've never paid interest charges of any kind, including mortgage interest, but briefly had a credit union auto loan in my early 20s. I suspect the now long-defunct Registered Home Owner Savings Plan, not to mention modest expectations and an obsessively high rate of saving, helped a fair bit.
Re: Retirement Debt
Own or home - only rolling M by M - always paid up.
Live below our income - put money aside every month.
Retired for 20 years. Drawing on RIF for 7.
bbt
Live below our income - put money aside every month.
Retired for 20 years. Drawing on RIF for 7.
bbt
Re: Retirement Debt
+1Jo Anne wrote:We have zero debt, own our home, and I neither know nor care what my credit score is.We have absolutely no debt, own our home, and have an Equifax FICO score of 845 as of 2011 02.
Re: Retirement Debt
No debt here either. Paid off our mortgage 25 years ago. No car or boat loans.
Accumulate about $3 or 4k in CC charges on average, although sometimes more when we do home projects etc. Always pay CC balance off at end of month. We have a margin investment account but almost never use it. Had a HELOC and almost never used it either. Cancelled it because it could affect home insurance cost if deemed a mortgage.
If we were to make a large purchase (car, appliances etc) and vendor offered very low financing cost, it would not bother me to use debt, provided we had investments earning more than the borrowing rate.
Accumulate about $3 or 4k in CC charges on average, although sometimes more when we do home projects etc. Always pay CC balance off at end of month. We have a margin investment account but almost never use it. Had a HELOC and almost never used it either. Cancelled it because it could affect home insurance cost if deemed a mortgage.
If we were to make a large purchase (car, appliances etc) and vendor offered very low financing cost, it would not bother me to use debt, provided we had investments earning more than the borrowing rate.
Re: Retirement Debt
I voted "No Debt" as well, with some clarification needed.
We retired 10 years ago with no long-term debt - mortgage- and loan- free.
Now, for short-term debt:
We do use an LOC cheque occasionally but only if we can clear the balance when the cheque clears - sometimes that requires a little planning and perhaps delay in spending.
We do invest but we never borrow to invest. If we see something new we like and have insufficient investment cash, we look to sell some current holdings and use the resulting cash to purchase our new opportunity.
We do use bank credit cards regularly but always pay the bill in full when it comes in.
All of us in the forum have ongoing property and income tax liabilities - these should be paid in full on time.
We are fortunate so far that our income covers our expenses on an ongoing basis, despite some challenges with personal health, children and aging parents.
Best of luck to everyone! Hope you can stay debt- and worry- free!
We retired 10 years ago with no long-term debt - mortgage- and loan- free.
Now, for short-term debt:
We do use an LOC cheque occasionally but only if we can clear the balance when the cheque clears - sometimes that requires a little planning and perhaps delay in spending.
We do invest but we never borrow to invest. If we see something new we like and have insufficient investment cash, we look to sell some current holdings and use the resulting cash to purchase our new opportunity.
We do use bank credit cards regularly but always pay the bill in full when it comes in.
All of us in the forum have ongoing property and income tax liabilities - these should be paid in full on time.
We are fortunate so far that our income covers our expenses on an ongoing basis, despite some challenges with personal health, children and aging parents.
Best of luck to everyone! Hope you can stay debt- and worry- free!
- Inquisitive
- Contributor
- Posts: 814
- Joined: 18 Feb 2005 22:53
Re: Retirement Debt
I was going to vote No until I remembered I now defer my property taxes. It doesn't please me to do this but otherwise the property taxes would come from my savings and that would please me less. This way the taxes will be paid when the house is sold or from my estate. So I think that is voluntary debt.
I don't consider credit card charges to be debt if paid off before due, anymore than my gas bill is.
Inq
I don't consider credit card charges to be debt if paid off before due, anymore than my gas bill is.
Inq
Re: Retirement Debt
I hadn't realized that that was even an option. But Dr Google advises otherwise. It seem that it is not widespread, but in BC quite a good deal:Inquisitive wrote:I was going to vote No until I remembered I now defer my property taxes.
Inq
http://www.nationalpost.com/property+ta ... story.html
Re: Retirement Debt
How much is good debt, i.e. debt used to purchase an asset with better yield than the interest payments? The amount is negligible compared to bad debt I think.HardWorker wrote:The article and survey don't carry much weight if they don't distinguish between good and bad debt.
Personally, have had no debt for 20 years (except for some in my margin account in 2009-2010, cleared when I took gains) and it's going to stay that way.
Re: Retirement Debt
I just pay mine - cash every July 4. Live in manufactured home on a REZ, with my BC home owner discount plus the olde duffer discount it's 265 a year (and I like to think of it as our multi million $ Island mansion).Springbok wrote:I hadn't realized that that was even an option. But Dr Google advises otherwise. It seem that it is not widespread, but in BC quite a good deal:Inquisitive wrote:I was going to vote No until I remembered I now defer my property taxes.
Inq
http://www.nationalpost.com/property+ta ... story.html
bbt
Re: Retirement Debt
Inquisitive's reply concening deferral of property taxes reminds us once again that some of us are fortunate enough to be able to meet all our bills each month/year, while others need to be more creative in order to have sufficient income to live for the foreseeable future.
Some of us are able to meet our obligations with pensions alone.
Others depend on some deferral of expenses or investment income to supplement their budget. This directly affects investment strategy and related risk management.
We need to think for ourselves and look past trite formulas often touted in the media.
Some of us are able to meet our obligations with pensions alone.
Others depend on some deferral of expenses or investment income to supplement their budget. This directly affects investment strategy and related risk management.
We need to think for ourselves and look past trite formulas often touted in the media.
Re: Retirement Debt
+1Thorn wrote:reminds us once again that some of us are fortunate enough to be able to meet all our bills each month/year, while others need to be more creative in order to have sufficient income to live
" A verbal contract isn't worth the paper it is written on " Samuel Goldwyn
"The light at the end of the tunnel may be a freight train coming your way" Metallica - No Leaf Clover
"The light at the end of the tunnel may be a freight train coming your way" Metallica - No Leaf Clover
Re: Retirement Debt
As a young Entrepreneur, in my early 20's, I was very aggressive and run into a problem with 'Cash-Flow'. My Grandfather bailed me out and I did learn Big-Time that it is a 'MUST' to live BELOW your Means, ALWAYS.
I never had a mortgage, loan, LOC. To date I have not paid one cent of interest to anyone. Hold clear title to all my properties. Keep some loose change in my pocket to leap onto an Opportunity. Have one CC and pay CC charges each month.
In retirement the lifestyle in our household uses 60-70% of our Cash-Flow.
Our aim in our previous life was to save so much money that it is impossible to spend it all.
+1...ATTA-Gal Jo Anne
I never had a mortgage, loan, LOC. To date I have not paid one cent of interest to anyone. Hold clear title to all my properties. Keep some loose change in my pocket to leap onto an Opportunity. Have one CC and pay CC charges each month.
In retirement the lifestyle in our household uses 60-70% of our Cash-Flow.
Our aim in our previous life was to save so much money that it is impossible to spend it all.
Jo Anne wrote:We have zero debt, own our home, and I neither know nor care what my credit score is.We have absolutely no debt, own our home, and have an Equifax FICO score of 845 as of 2011 02.
+1...ATTA-Gal Jo Anne
Sometimes the questions are complicated and the answers are simple...Dr Seuss
Be who you are and say what you feel because those who mind don't matter and those who matter don't mind...Dr Seuss
Be who you are and say what you feel because those who mind don't matter and those who matter don't mind...Dr Seuss
Re: Retirement Debt
Thorn wrote:Inquisitive's reply concening deferral of property taxes reminds us once again that some of us are fortunate enough to be able to meet all our bills each month/year, while others need to be more creative in order to have sufficient income cash flow to live for the foreseeable future..
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- Veteran Contributor
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Re: Retirement Debt
Not much detail is given on the methodology of the survey, but it may also be including all those people who have mortgages on cash-flow-positive rental properties; plus those who have succumbed to the temptation to invest in securities with borrowed money.