The CIBC poll out Wednesday showed 46% of Canadians aged 45- to 64 are still working to pay off their mortgage, and 75% of the baby boomers still hold some form of debt. But at the same time, many in that age bracket are trying to build retirement savings, said the report.
“Having identified retirement planning as their top priority for 2011, these poll results show that boomers still have progress to make on paying down their mortgage and other debt, which will allow them to accelerate their retirement savings,” said Colette Delaney, senior vice president of mortgage, lending, insurance and deposit products for CIBC.
But she said paying off one’s mortgage faster will allow the retirement savings to build faster. Paying off interest on debt is typically much more expensive than any savings investment plan. That sounds like common sense, but Delaney said few baby boomers take the time to sit down and analyze what they need to do to achieve their goals.
The poll showed only 21% of Canadians aged 45 to 64 have had a conversation with an advisor sometime in the last year to reduce their debt faster.
“As boomers near retirement, managing and eliminating debt to allow for savings growth is a priority,” said Delaney.
In addition to paying off debt, the CIBC report noted refinancing a mortgage with rates near historic lows could also pay off.
The poll found the percentage of Canadians who held mortgages decreased from the peak of 65% of those between 35 and 44. Of those between 45 and 54, 54% held a mortgage, and of those between 55 and 64, 33% a mortgage. For those 65 and above, 12% held a mortgage.
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