Canadians Expect To Be Debt-Free By Age 56, CIBC Poll Shows

However, more than half of Canadians 65+ are still carrying some form of debt

Toronto, ON (July 30, 2015) – A recent poll by CIBC finds that on average, Canadians expect to be debt-free by the time they are 56 years old, although some Canadians see themselves carrying debt well into their sixties. In addition, nearly a third (29 per cent) say they have no debt while 13 per cent say they will never be debt-free.

Highlights of the poll results include:

  • 56 is the average age Canadians expect to be debt-free
  • 21 per cent say they will be stuck with debt until they are over 65 years old
  • 29 per cent say they are completely free of debt today
  • 13 per cent say they will never be debt-free

“While Canadians expect to be debt-free by age 56 on average, not everyone will hit that goal, which means a significant number of Canadians will still be carrying debt during retirement,” says Christina Kramer, Executive Vice President, Retail and Business Banking, CIBC. “As debt repayment goals push closer to retirement age, it puts an added strain on your ability to save for retirement and manage your cash flow after you retire.”

More than half of Canadians 65 and over still owe money

The poll found that over half of Canadians aged 65-plus say they still carry some form of debt today, with credit card debt and lines of credit as the most common types. This group also said they didn’t expect to have their debts paid off until they are 70 years old on average.

“Cash flow becomes a top priority in retirement, and having to make debt repayments out of your income will create a drag on your finances and your ability to have the retirement you want,” adds Ms. Kramer.

Younger Canadians optimistic about debt repayment

Canadians 25-34 years of age have ambitious plans for debt repayment. This age group on average expects to be debt-free by age 47. However, a closer look at those currently carrying debt suggests this may be an optimistic goal, as more than 68 per cent of Canadians 45 and over still carry debt, including 31 per cent who still carry a mortgage.

“What people need to remember when attempting to shorten the road to debt freedom, is that paying down debt is just one part of a broader financial plan that needs to include saving for retirement, managing day-to-day expenses and maintaining an emergency fund,” Ms. Kramer says.

Balancing debt repayment and savings goals

Of all Canadians with debt, 32 per cent say they have made sacrifices or cut spending to better manage their debt this year and 25 per cent say they have made at least one lump sum payment towards their debt on top of regular payments. This aligns with a CIBC poll conducted last December which found that paying down debt was the top priority for 2015.

“As our poll findings show debt repayment remains a top priority for Canadians, it’s encouraging to see that many Canadians with debt are setting goals and taking action to pay it off,” Ms. Kramer says.

Three steps to create a debt freedom plan

Becoming debt-free takes time and dedication. It’s best to have a clear plan that outlines the steps you should take each month to get closer to your goals over time. Here are a few tips for putting your plan on paper:

Step 1: Assess your debt. Make a list of everything you owe, who you owe and when the payment is due. Be sure to note the interest rate and monthly payment amount, separating out how much goes towards interest as opposed to principal.

Next, add up the individual debts to find your total outstanding balance, and how much you are paying each month in interest to service those debts. Talk to a financial advisor about possible ways to structure your debt and potentially lower your interest costs.

Step 2: Set priorities. It’s essential to make at least the minimum payment due on each debt to avoid penalties and to keep your credit rating intact. Beyond the minimum, focus your attention first on the debts that are costing you the most — those with the highest interest rate.

Step 3: Establish a timeline. Like any goal, it’s helpful to have a deadline; it gives you a “finish line” to work towards. Keep it realistic and achievable. This is where it can really help to talk to a financial advisor.

Key Poll Findings

Average age Canadians expect to be debt-free:

Current age range Average age they
expect to be debt-free
All 56 years
18-24 39 years
25-34 47 years
35-44 52 years
45-54 58 years
55-64 64 years
65+ 70 years

Average age Canadians expect to be debt-free, by region:

Region Average age expect
to be debt-free
All 56 years
British Columbia 56 years
Alberta 54 years
Manitoba/Saskatchewan 61 years
Ontario 55 years
Quebec 57 years
Atlantic Canada 58 years

When Canadians expect to be debt-free, by age range:
(* indicates sample size too low to report individually)

When Canadians
expect to be debt-free
Percentage of Canadians
18-24 years *
25-34 years 5%
35-44 years 7%
45-54 years 13%
55-64 years 31%
65+ years 21%
I will never be debt-free 13%
I don’t know 8%

Percentage of Canadians who currently have the following types of personal debt:

Types of personal
Canadians who have
this type of debt
Credit card debt 39%
Mortgage 33%
Line of credit 30%
Car loan 22%
Student loan 10%
Personal loan 8%
Other types of debt (e.g., retail credit cards, retail financing plans) 6%
I do not have any personal debt 29%

Percentage of Canadians who say they do not have any personal debt, by age range:

Current age range Canadians with no
All Canadians 29%
18-24 years 50%
25-34 years 17%
35-44 years 18%
45-54 years 24%
55-64 years 31%
65+ years 44%

What Canadians have done so far this year, if anything, to tackle their debt:

Made sacrifices/cut spending in order better manage your debt 32%
Set up/made regular payments on my debt 32%
Made at least one lump sum payment towards your debt on top of regular
Increased my debt repayment amount 19%
Implemented a household budget 19%
Worked more hours/got a second job 13%
Accelerated my debt repayment schedule 12%
Talked to a financial advisor about better managing your debt 8%
Consolidated my debt 7%
Refinanced my mortgage 5%
None of these 25%

Survey Methodology

On June 3 and June 5 2015, an online survey was conducted among 3,013 randomly selected Canadian adults who are Angus Reid Forum panelists. The margin of error – which measures sampling variability – is +/- 1.80 per cent, 19 times out of 20. The results have been statistically weighted according to education, age, gender and region (and in Quebec language) Census data to ensure a sample representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.

About CIBC

CIBC (TSX:CM)(NYSE:CM) is a leading Canadian-based global financial institution with 11 million personal banking and business clients. Through our three major business units – Retail and Business Banking, Wealth Management and Wholesale Banking – CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada with offices in the United States and around the world. You can find other news releases and information about CIBC on our corporate website at

SOURCE: Canadian Imperial Bank of Commerce