There’s an article in the Globe and Mail about the rising number of ‘Grandpa debtors‘ – people past the age of 55 who have debt problems. There are a few reasons sited for this shift: easy credit, lack of emergency savings and relying on real estate as a retirement plan:
Real estate can also be a factor in some of these dire debt situations, Mr. Elyea said. Some older debtors head into retirement with $50,000 still left on their mortgages, and then start using their credit cards to pay them because their income has dropped and the CPP and OAS aren’t enough to cover the payments.
There’s also the trap of considering your home to be your retirement nest egg, said Mr. Elyea, which can backfire because of the unpredictability of the housing market.
“In our Tri-Cities practice [covering Coquitlam, Port Coquitlam and Port Moody], that’s where a lot of people bought houses at the height of the market when anybody could get financing, and now they’re all [valued] below what they paid for them,” he said.
If you do find yourself in a situation where your debt has gotten out of control, see a professional, said Mr. Eylea, whether it’s a bankruptcy trustee or a money coach who can let you know about your options.
Here’s the full article.