A recent Bureau of Labor Statistics study in the U.S. broke down how each age group spends their leisure time. According to The Huffington Post which compared the time spent on leisurely activities between retirees and millennials, these two groups do not have too much in common. Retirees dedicate exactly twice as much time to relaxing and thinking, and watch nearly double the television, as 25-34-year-olds. Although retirees have more leisure time on average, many can’t afford to being idle. Another recent study indicated that four in 10 retiree homes don’t have enough money to cover their monthly expenses.
In Canada, the picture is not looking any better. Not only are Canadians continuing to take on more debt, but a growing concern is the extent to which older consumers, supposedly enjoying a worry-free retirement, are resorting to credit. The Globe and Mail reported that according to a new study by credit-monitoring firm Equifax Canada, total Canadian consumer debt rose by almost $77 billion, or slightly over six percent, in the second quarter of 2013, compared with the same period in the previous year. What is most worrisome is that the average debt for consumers aged 65 and over increased by 6.5 percent, the greatest year-over-year increase in all age groups.
Many boomers are postponing their retirement and trying to work longer in the workforce. However, even for seniors who have retired, they seem to be accumulating more debt to boost income through credit so that they can continue to enjoy a pre-retirement lifestyle that they may no longer be able to afford. According to the Canadian Association of Credit Counselling Services, these retirees may also be accumulating debt to help their own grown children or their own parents who are struggling financially.
I’ve posted before that boomers who want to retire must make sure that they are 100 percent debt-free. Even so, they may have to take a more aggressive approach to their investment portfolio in order to continue with a certain lifestyle that they are used to. Otherwise, they will have no choice but to lower their expectations for a retirement lifestyle or work longer in order to save more.
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