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Seniors In Canada Face Financial Bad Luck

October 6, 2012 by CreditCardsCo™

It used to be that seniors looked forward to retirement. The golden years were the best years of a person's life. This is not always the case anymore. In fact, the golden years are less comfortable and more stressful than they have ever been. A recent report by the Vanier Institute showed that many Canadians who are older than the age of 65 are facing the highest bankruptcy and insolvency rates in the nation.

As the director of the Vanier Institute says, the good news is that people are living longer than ever before. However, few people are financially prepared for these extra years. Those who don't plan for these extra years are often faced with a variety of financial problems at one point or another during their golden years.

Statistics in Canada

Statistics Canada has shown that the senior population throughout Canada is increasing at a rate of 14.1% since the last poll. Those over 65 are now at almost 5 million. This is a lot more seniors than there were in previous years. Further, a senior is 17 times more likely to be insolvent now than they were in 1990. This is all according to the Vanier Institute report.

All of these statistics are alarming. Seniors need to be aware of these statistics to learn from them and ensure they don't become one of the statistics. It's never too late to do something about it.

Several decades ago, retiring at 65 meant having money to live on for another 4 or 5 years – and potentially 7 years for women. Things have changed dramatically in the past few years. People are living longer. Now, when someone decides to retire at 65, they need to plan on living for another 20 or 30 years. The problem is that few companies offer such a pension with a defined benefit that can be relied on with a fixed income for that long of a time.

Many people have planned for 10 years of retirement when realistically they need enough for 30 years. In addition to longer life spans, there is the financial instability aspect. Housing has gone up considerably while the values are down considerably.

There are other issues as well. Many nest eggs have taken a hit because of the market. There is also the possibility of supporting older parents as well as college-age children who are finding themselves unemployed and needing to move back in with parents.

The current seniors began planning for retirement when things were very different. Many held the same job or was employed by the same company for a considerably amount of time – or potentially their entire life. Job security of that level is no longer around.

Advice To Seniors

The advice that is given is that people should use every support possible while they are still young – including health improvements. Chronic health conditions can take a toll on a fixed income retirement, which is why it's better to gain control over diabetes, heart disease and various other conditions early on.

Many Canadians in their 30s and 40s are experiencing diabetes and arthritis. These costs can damper savings accounts and make it hard to earn as much as necessary. Being diagnosed with diabetes comes at no cost but the insulin is far from free. Ongoing care and pharmaceutical costs can rise quickly, especially seeing as how the different provinces all reimburse at different rates.

None of this information is meant to be depressing to Canadians. There is still time to make changes to get one's self back on track.

The best news available is that many people have older people in their lives today. This allows many younger generations to see the problems first-hand and learn from others' mistakes. It can be an eye opening experience to see some of the financial struggles up close and personal. Saving more is a very apparent thing when others see those that are older them struggle with money. More conversations are being held about the importance of saving, not just investing money.

The financial bad luck that seniors face today is partly due to lack of knowledge. No one could have foreseen living longer, dealing with market crashes and housing problems. However, now that these problems have surfaced, seniors must deal with them appropriately. It has also demonstrated to younger generations what must be done so that they don't end up with the same problems as those that are going through it now.

Final Word

Everyone can overcome their bad luck with a little more knowledge. Saving, focusing on health and much more can go a long way. Seniors need to acknowledge when they need some assistance. Their bad luck can be reversed.

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