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8 Reasons that Canadian Seniors are Experiencing Financial Problems

It is a growing concern across the country – more and more senior citizens in Canada are experiencing money problems. I recently met with a senior couple with debt on multiple credit cards plus a line of credit. As their debt increased and their retirement income remain fixed, they found themselves unable to make even their minimum monthly payments. Due to similar situations, we are seeing an increasing number of seniors filing personal bankruptcies and consumer proposals. A number of factors are contributing to this unfortunate situation.

Dependency of adult children.

Senior citizens are now assisting their children into their adulthood, which places significant financial pressure on them. Not only are adult children staying at home well into their 20’s and even 30’s, when they do leave home, they are relying on their senior parents to shore up their finances.  This often depletes resources that seniors need for a secure retirement.

The “sandwich generation” phenomenon.

Because people are living longer than ever, some seniors are also assisting their own parents, putting further strain on their resources. This phenomenon has been referred to as the “sandwich generation”.

Living on a fixed income.

Most senior citizens are on a fixed income, and because the cost of living is always increasing, it can be difficult for seniors to pay for their basic living expenses.  An emergency of some kind in their lives can be enough to cause a debt crisis, because they do not have any extra funds in their budget to deal with an emergency. 

Lack of savings.

Many senior citizens retire with little or no money in savings, often due to the fact that more people retiring today have not had the benefit of pension plans while they were working.  The result of this is senior citizens being forced to use credit to pay for expenses, because they have no “nest egg” to draw on. 

Financial scams.

Senior citizens are also a target for scams by financial advisors.  The result of this can be senior citizens losing their entire life savings. 

The complexity of today’s world.

The digital age and complexity of the financial world today further adds to the stress faced by seniors, even in doing their day to day banking. 

Reluctance to seek help.

Seniors are a segment of the population who are the most resistant to seek help from a debt professional if they are having financial problems. Often, they feel embarrassed.  In fact, some seniors will not consider accessing options to deal with their debts because they feel that if they do not pay their creditors back in full, that they have “stolen” money from their creditors.

Death of a spouse.

When a senior’s spouse passes away, funeral expenses (and sometimes medical costs not covered by provincial healthcare plans) can quickly lead to overwhelming debt. In addition, household income often drops dramatically leaving them with less resources to pay their debts. 

All of the above factors have contributed to a growing concern: seniors are having more problems dealing with their finances and debts than in the past. What is the best course of action for seniors experiencing financial problems? Explore all of your options for debt relief. Talk to your peers, research your options on trusted websites,  seek out advice at non-profit agencies, or speak to a debt professional. It is always best to get help early.

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