The number of Canadian seniors declaring bankruptcy is growing alarmingly, says a study carried out by the Financial Consumer Agency of Canada. Canadians are entering retirement carrying a greater burden of debt.
Bankruptcy is a term used to define a business or individual that cannot pay back monies owed to creditors. It is a legals status that is typically initiated by the debtor.
More seniors are having to support their children financially because they are taking longer to find employment and get on their feet, a factor that is contributing to the trend, says The Strategic Council, the firm that conducted the study.
The study authors wrote:
“Demographic, economic and even behavioral trends suggest that the current landscape for Canadians as they head into their retirement years is challenging.”
Pensioners are finding it difficult to stay on top of their financial affairs as they get older; their ‘financial literacy’ becomes a major difficulty.
There is no quick fix solution to seniors’ financial literacy. Changing behavior will take a long time – years, if not decades.
According to the authors, as seniors advance in age they become more vulnerable to scams.
The report recommends that strategies to improve financial literacy need to take into account elder abuse, health status, ageism and the stigmatization of elderly individuals.
In the modern age of the Internet, many seniors struggle to cope, the authors found.
They wrote:
“The issue of digital literacy was raised a number of times by several experts as being the single largest obstacle or barrier for many seniors in terms of improving their financial literacy and their financial management skills.”
Since 2007, there are now nearly 600,000 Canadians over sixty-five years of age who are still working, which is twice the number in 2007.
Canadians today are living longer. The average Canadian citizen who had reached 65 years of age in 2013 can expect to live until he or she is 86, which is approximately five years longer than those reaching 65 in 1970.
A growing number of people are living well into their 90s or even longer. For many Canadians, life as a senior may be nearly as long as his or her years spent in the workforce. Their priorities, lifestyles and financial needs will probably evolve as they age.
As people approach their senior years they typically face unique financial challenges. Whether they are still in employment, are partially or fully retired, they face important decisions regarding money.
To help its citizens through this phase in their lives, the Financial Consumer Agency of Canada published “Strengthening Seniors’ Financial Literacy.”