The age group seeing the fastest growth in bankruptcy filings across Canada in the last few years is citizens 55 and over. Here in Lethbridge, bankruptcy filings are following the national trend. More and more residents approaching retirement are finding themselves in deep financial difficulty. When their incomes drop in retirement, a declaration of personal bankruptcy is often their only solution.
Debt and declining incomes are the twin towers driving people in all age brackets into bankruptcy. Simply put, if you run up more debt than your income can handle, personal bankruptcy may be your only way out.
In an ideal world, the older people get the less need they should have to incur debt. Most already own their own homes or are comfortable with apartment living. The material possessions by which some of us judge our success or failure have already been acquired.
However, for some people even with incomes on the rise, there is no such thing as “enough.” Their material possessions grow in proportion to the increase in their incomes, and sometimes even beyond what they can truly afford.
Many other Canadians have seen stagnant incomes for decades and instead of altering their living standards accordingly have resorted to credit cards to maintain their life styles.
In either case, approaching retirement with substantial debt places anyone at risk of a Lethbridge bankruptcy in retirement. The sad fact is that even those who have planned ahead with investments to supplement their government pension and managed their debt can be in for an economic shock from an unsuspected source – their adult children.
Times are very tough and more and more adult children are turning to their parents for help dealing with their financial difficulties. Some Lethbridge residents who had factored into their retirement plans the proceeds from the sale of that larger home they no longer need find themselves in the position of having to keep the home in order to provide lodging for their struggling children.
Others provide loans or use their own available credit to help their children. Those who enter retirement virtually debt free may be in a strong enough financial position to help their adult children and still survive. Those who enter retirement with debt loads of their own that may be beyond their ability to manage may find themselves in the emotionally difficult position of having to say no to their children.
The best course of action for all Canadians nearing retirement in these challenging times is to reduce their level of debt, even if it involves reducing your standard of living. Doing it while you have more income is a wiser choice than waiting till events force you into it.
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