- When asked to name their top financial priority, 45% listed paying down personal loans, other debt or credit card balances. By comparison, 23% said saving for retirement was their number-one financial concern.
- Almost half (44%) of Canadians are paying down mortgage debt as opposed to saving for retirement.
Other findings suggest these good intentions may not be enough, however. When asked under what circumstances they’d take on debt in retirement:
- 11% would take on debt to buy a car.
- 7% would to renovate their home.
- 7% would to help their children.
- 4% would to buy a home.
- 2% would to invest.
When asked: Is it important to you that you do not die in debt? A sizable minority — 27% — said “No, it does not matter if I die in debt.”
Here’s what you need to know about dying in debt.
There are three types of creditors: preferred creditors (such as Canada Revenue Agency); secured creditors (like the bank that’s holding your mortgage loan); and general or unsecured creditors (everybody else).
Preferred creditors get paid first, followed by secured creditors and then unsecured creditors. All the creditors have to be paid out [of your estate] first before any beneficiaries are paid out.
So, does it matter if you die in debt? It does to the extent that your goal is to leave something for the beneficiaries you've named in your will. For some of us this is important, for others it is not as important as enjoying life. I believe that most boomers want our children and grandchildren to be better off then we were, and if we can help them we will, but we also recognize that we need to have a good quality of life in our retirement years. I tell my children that I am spending their inheritance so enjoy me while you can. I guess I am in the 27%