Can You Pay Your Debt And Save For Retirement

For most people, the short and unfortunate answer is probably not.

If you’re trapped in the cycle of debt, you’re likely committing most of your income to paying that back. This means little money left over for annual expenses and long-term goals — including saving for retirement. It also means you’ll need to revisit your budget and financial plan to determine the sacrifices and compromises necessary to achieve your long-term goals.

A Startling Trend

At MNP, we’re seeing a growing number of people working well-past retirement age simply to afford their monthly debt obligations. Many won’t even consider retiring, as they know, for them, it’s more a dream than reality. The hard truth is despite their good intentions, many may not be able to work long enough to end their debt in their lifetime.

Avoid the Minimum Payment Trap

Credit card statements must now indicate how long it would take to pay off your current balance making only the minimum monthly payment and never using the card again. If, like most Canadians, you have a balance of $5,000 or more on one or multiple cards and an average interest rate of between 19.99 and 29.99 percent — this could be 30 years or longer.

For those approaching (or past) middle age, you will reach or exceed retirement age before you pay off your debt. And if you do decide to retire, you will likely have a financial crisis on your hands — as you will have less income to pay your debt obligations and would have missed your best opportunity to save for your years on a fixed income. 

Another Option: Life-Changing Debt Solutions

Retirement is supposed to be a happy and rewarding chapter. Don’t burden your golden years with the regret, stress and anxiety of debt. Instead of spending your remaining working years struggling to make payments you can’t afford — and that may never end in your lifetime — meet with Licensed Insolvency Trustee to review your options.

During a Free Confidential Consultation, your Licensed Insolvency Trustee will review your financial situation, discuss your challenges and goals and design a solution that could have you out of debt in five years or less. And, for most consumers, with a monthly payment significantly less than you’re making now.

Whether you qualify for a Life-Changing Debt Solution, such as a Consumer Proposal or Bankruptcy — or would benefit from another option — you’ll receive the information, advice and assistance to choose a solution that fits your current needs and your future goals. Remember, when thinking about retirement, having a strategy to deal with your debt is just as important as planning for your income. Let MNP help you end the burden of debt for good, so you can look forward to your future instead of fearing it.