Debt drags down retirement savings: Poll

More than half (53%) of debt-ridden Canadians are saving for retirement, but the more debt they carry the less they’re able to save, according to a CIBC poll.

Those carrying one debt product contribute $500 per month towards their retirement savings; two debt products contribute $240 per month; and three or four debt products save $200 per month, finds the poll.

“Planning for a successful retirement requires a strategy to pay down debt, reduce interest costs, and redirect those funds towards long term savings,” says Christina Kramer, executive vice president, retail distribution and channel strategy, CIBC.

Read: Canadians in denial on lasting debt

Canadians focused on paying down debt should:

• Make lump sum payments to higher interest debt to reduce interest costs;
• Take advantage of the low-interest-rate environment and make higher payments;
• Use debt products that offer a lower interest rate and have a strategy to pay balances down in a specific time frame.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.