Get Started
Client Login


Tips for managing debt in retirement


Debt in retirement can have a huge drag on your ability to enjoy your retirement years, but can also work in your favor if managed properly. Here are some tips for managing debt in retirement:

Knowing what kind of Debt, it is:

The first step in managing Debt is to know what kind of debt you have on your personal balance sheet. For example, it could just be a mortgage at a 2.5% interest rate. That is a good debt to have. On the other end of the spectrum, it could be a significant amount of credit card debt. As you guessed, that’s not a good debt to have.

Create a budget:

The next step to managing debt in retirement is to have a clear picture of your financial situation. This means creating a budget that outlines where is your income in retirement coming from, and how much is it. Another major component is to know how much you are spending. By knowing exactly how much money you have coming in and going out, you can make a plan to prioritize your debts and start paying them one at a time.

Prioritize your debts:

As mentioned above, not all debts are created equal. Some, like credit card debt, can have high-interest rates that make them more expensive to pay off. It’s important to prioritize paying off these types of debts first. On the other hand, some debts, like a mortgage or student loans, may have lower interest rates and may be more manageable to pay off over time. With good debts, the math would tell you to only pay what is required, nothing more, nothing less.

Use your assets:

Once you have a list of all your debts and you have prioritized them, knock the bad debts out. You can use your investments to pay down any debt that would charge a higher interest rate than what your portfolio could generate.

Knowing all of the above, you still need to answer a question about what your comfort level is with debt. For example, I mentioned that a mortgage is a good debt. For some people, having a mortgage in retirement years be very uncomfortable. There is always a math answer and then a human answer, which differs for everyone. We can tell you what the math answer is, in the above example it would be not paying down the mortgage. But at the end of the day, we wouldn’t want you to be staying up at night, that’s no good either.

Having a plan around your finances could give you so much freedom in making an educated decision, and not only in terms of debts but also in terms of living the best version of yourself. Click here to schedule a free 30 minutes consultation.

 - Jai Gandhi, Licensed Assistant

Jai Gandhi is a Licensed Assistant at Endeavour Wealth Management with iA Private Wealth, an award-winning office as recognized by the Carson Group. Endeavour Wealth Management provides comprehensive wealth management planning for business owners, professionals and individual families.

This information has been prepared by Jai Gandhi who is a Licensed Assistant for iA Private Wealth and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this newsletter comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offeror solicitation to buy or sell any of the securities mentioned. The information contained here in may not apply to all types of investors. The Investment Advisor can open accounts only in the provinces in which they are registered.

iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.


Recent Blogs View All >

Why Isn’t Everyone As Successful As Warren Buffet

Warren Buffet is often considered as the best investor of all time. He has always been very open about the ideas and philosophy behind how he....

April 15, 2024

Retirement Ready: The Ultimate Checklist for Embracing Your Golden Years

As retirement approaches, it feels a bit like preparing for a long-anticipated journey to a destination you’ve always dreamed of exploring....

April 8, 2024

Prescribing Financial Health: Tips for Doctors Managing Student Loans

Canadian doctors often carry six-figure student loans, causing stress for many. When strategizing for how best to manage these debts, you may wish...

April 1, 2024

Free GuidesView All >

Living Financially Free

Download your free guide to financial freedom.

Is Your Retirement Protected?

Download our free guide to learn how best to protect yourself, your family, and your retirement.

The Power Of The Personal Pension Plan

Download your free guide to learn how you can protect your retirement savings with a Personal Pension Plan.

3 Methods To Not Run Out Of Money

Download your free guide to help ensure you don’t run out of money.

4 Mistakes People Make With Their First Million

Download your free guide to learn how to ensure your portfolio and plan stay on track.

want to achieve YOUR FINANCIAL goals?