Most say they would "work longer to live better", but some are taking a risk by carrying debt into retirement

TORONTO, Sept. 21, 2012 /CNW/ - A new CIBC (CM.TO) (CM) poll conducted by Leger Marketing reveals that most of Canada's 50-59 year olds don't intend to give up their current lifestyle as they enter retirement, despite falling short of their retirement savings goals. The poll also reveals that some Canadians in their 50s are planning to carry debt into retirement with no immediate plans to pay it off, an approach that could reduce their retirement cash flow and jeopardize their plans to live the good life.

Key poll findings include:

"One of the keys to planning for retirement is having a clear view of how much monthly income you can generate once you leave work, and whether that income will support your expenses," said Christina Kramer, Executive Vice-President, Retail Distribution and Channel Strategy, CIBC. "These poll findings would suggest that some Canadians approaching retirement would benefit from a conversation with an advisor about whether their retirement income and monthly cash flow will live up to their plans."

Carrying Debt for Life?

Poll results also show that some of Canada's boomers are already forecasting that they will carry debt into retirement, and have no plans to pay it off anytime soon.

According to Ms. Kramer, this may also suggest some Canadians approaching retirement are too comfortable with today's low interest rates on their debt, and may not have evaluated the negative impact that ongoing debt payments can have on their cash flow.

"Retiring with debt creates a drag on your retirement income, as monthly repayments will reduce cash flow and can actually limit your financial flexibility once you retire," said Ms. Kramer. "While some Canadians may feel they can incorporate monthly debt payments into their retirement, the reality is that repaying debt before retirement remains an integral component of maximizing cash flow."

Ms. Kramer added that for the vast majority of Canadians, a debt-free start to retirement is the right strategy. "Entering retirement with minimal or no debt maximizes your cash flow, and gives you a clear sense of the level of expenses that will be manageable within your retirement plan."

Retirement Planning Advice

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CIBC Poll: Canada's Baby Boomers not interested in a modest retirement