- Ontarians more stressed than other regions about the thought of retiring with debt
- Nearly six in ten Ontario homeowners indicate they would continue to work if they reached their planned retirement age and still had debt
- Manulife Bank surveyed 2,003 Canadians
- Audio clip and infographic attached
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WATERLOO, ON, May 14, 2012 /CNW/ - Ninety per cent of Ontario homeowners indicate that "being debt-free" is very important to their definition of a successful retirement, according to a recent debt and retirement survey conducted by Manulife Bank of Canada. This is second only to "good health" (95%), and slightly higher than "sufficient retirement income to maintain my current lifestyle" (84%).
Ontarians are also more concerned about the thought of reaching their planned retirement age with debt still outstanding than are other Canadians. Fifty-seven per cent of Ontarians indicated that they would find this scenario extremely stressful, compared to 46 per cent of homeowners from the rest of Canada.
Forty-three per cent of Ontario homeowners who are neither debt free nor retired indicate that they will place a greater emphasis on debt repayment over retirement savings over the next 12 months. Only eight per cent stated the reverse, further reinforcing the high priority Ontario homeowners place on debt-freedom for their retirement.
This is the first time that Manulife Bank focused on surveying Canadians about debt in the context of retirement planning. Manulife Bank has increased the sample size to allow for regional-specific data demonstrating similarities and differences in how Canadians view debt across the country.
"Most people think about savings as the key financial consideration for retirement," stated Mike Gentile, a Chartered Financial Consultant & President of Personalized Investment Planning Inc. in Kitchener, Ontario. "But debt-freedom is a critical consideration for Ontarians, and they find the idea of retiring with debt extremely stressful. An experienced Financial Advisor employs tools such as Cash Flow Analysis and Financial Planning Concepts to assist clients in reducing their debts while giving them an opportunity to increase their tax advantaged savings."
Across Canada, debt-freedom expectations change as people get older
Manulife Bank's debt and retirement survey found that three in four Canadian homeowners consider debt-freedom to be among their top financial goals - a finding that is relatively consistent with Manulife Bank's past consumer debt studies. However, their expectation about when they will actually achieve debt-freedom appears to be largely dependent upon their age, a finding that is consistent across the country.
Most Canadian homeowners in their 30s (73%) who reported having debt expect to be debt-free before they turn 60. That number decreases to two-thirds for homeowners in their 40s. Just one third of homeowners in their 50s expect to be debt-free before they turn 60, with one in five indicating they either don't know when they'll be debt-free (14%) or don't expect to ever be debt-free (7%).
Overall, just over half of the survey respondents are confident they will be free from debt when they reach their planned retirement age. This relative lack of confidence appears to be well-founded, as only half of Canadian homeowners report having less debt than they did 12 months ago.
"It's encouraging to see younger homeowners express optimism about becoming debt-free" added Doug Conick, President and CEO of Manulife Bank of Canada. "However, the experience of more seasoned homeowners, revealed by the survey, underscores the importance of developing a concrete debt-reduction plan and sticking to it. Most will find becoming debt-free much easier if they have a concrete plan for how to get there."
Ontario homeowners are planning for debt repayment
In Ontario, homeowners are concerned about the challenges they face regarding household debt. Within two-adult households, two in three couples review debt with one another at least every two months, which indicates a concerted effort to understand and manage debt. These results parallel those reported in the rest of the country.
Yet, despite Ontarians' clear commitment to planning for debt-freedom, only about a third seek professional advice to manage their debt and day-to-day cash flow. What's encouraging is that more than three quarters (76%) of Ontarians who do work with a financial advisor have a concrete plan for becoming debt-free.
Debt-freedom (or a lack thereof) is a barrier to retirement
For Ontario homeowners, debt-freedom is critical to a stress-free and successful retirement. Nearly six in ten Ontarians indicate that if they reached their planned retirement age and still had debt, they would continue to work, either part time (20%) or full time (39%) until their debt was gone. In contrast, only 35% would retire as planned if they still had debt outstanding.
About the Manulife Bank of Canada Debt and Retirement Survey
The Manulife Bank of Canada poll surveyed 2,003 Canadian homeowners between ages 30 to 59 with household income of more than $50,000. It was conducted online by Research House between March 5 and March 16, 2012. Full survey results are available at manulifebank.ca/debtresearch.
Audio clips and infographics attached. More audio clips and infographics can be found at repsourcepublic.manulife.com
About Manulife Bank
Established in 1993, Manulife Bank was the first federally regulated bank opened by an insurance company in Canada. It is a Schedule l federally chartered bank and a wholly-owned subsidiary of Manulife Financial. As Canada's first advisor-based bank, it has successfully grown to more than $20 billion in assets and serves clients across Canada. Manulife Bank believes that effective debt management is a key contributor to financial health and that, by working with a Financial Advisor to create a customized financial plan that incorporates debt and cash flow management, many people could save money, become debt-free sooner and achieve more of their financial goals. It's for this reason that Manulife Bank offers its innovative deposit and loan products through independent financial advisors to help individuals make the most of their financial plan. Manulife Bank employs a team of specialists across the country that work with homeowners and financial advisors to design cash flow programs that are more effective, efficient and flexible. For more information about Manulife Bank products, speak to your financial advisor or visit manulifebank.ca. To learn more about Manulife One or Manulife Bank Select, or to find your local Manulife Bank specialist, ask your advisor for a referral or visit manulifeone.ca or manulifebankselect.ca.
About Manulife Financial
Manulife Financial is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. In 2012, we celebrate 125 years of providing clients strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife Financial and its subsidiaries were C$512 billion (US$512 billion) as at March 31, 2012. The Company operates as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States.
Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife Financial can be found on the Internet at manulife.com.
Image with caption: "Retiring from Debt in Ontario (CNW Group/Manulife Financial Corporation)". Image available at: http://photos.newswire.ca/images/download/20120514_C7075_PHOTO_EN_13619.jpg
Audio with caption: "Doug Conick, President and CEO of Manulife Bank of Canada - Retiring from Debt in Ontario". Audio available at: http://stream1.newswire.ca/media/2012/05/14/20120514_C7075_AUDIO_EN_13625.mp3
For further information:
Tracy Van Kalsbeek
Public Relations Consultant
Manulife Financial Canadian Division