Do you expect to be debt free by the time you retire?

I am 7 years from my target retirment date. Although I have lived debt free most of my working life, I have just acquired another property and carrying a mortgage of $650,000. I will likely carry this into retirement. I have 2 other properties that are fully paid for, and my mortgage payments are about 5% of my net income. Furthermore, my investments have higher returns that what I pay out in interest on my mortgage, so it doesn't make sense to sell my investments and pay off my mortgage, not to mention the capital gains. Of course, I evaluate my financial situation regularly as conditions change. Do I worry about my financial situation upon retirement? No. I know there is a lot of bleak news about the economy, but I will not worry about something I cannot control. For all I know, the planes I fly in weekly could crash, or I could get cancer and die before reaching retirement.

I shouldn't be in any more debt than I was before but can't say the same for many of my friends. All about priorities.

Do I worry about being debt free in retirement? Yes and no. I would like to pull it off in another eight years, but will have to wait and see if it is possible. When there are gaurentees on how long I will live, how long I will be retired and how well my investment assets will perform, I won't have any worries. Until that happens, I will work toward paying down the mortgage as fast as I can, while at the same time saving as much as possible in my RRSP. I just went through an entire years worth of expenses to discover I live quite well on $40,000 per year. So, I don't think I would need much more than $800,000 in investments inorder to generate a comfortable living. LOL!! I already own the recreational property I want to build on. So, if housing prices on southern Vancouver Island continue to rise and the countries economy continues to expand, I just might be albe to sell my house, build another and bank some or sell house, pay off remainder of mortgage, build new house and bank less. If I live long enough!!

I just turned 41, I will be debt free in two years. I guess the problem these days is not so much that wages don't keep up, its more so that many want to live the good life and not within their means. I started saving a little when I was 18. Every year I would put a little away, not live extravagantly, but still have fun from time to time. Over the years it all added up and now I can retire in two yrs and do what I wish. I have seen so many people over the years who absolutely have to have a new car every couple of years, new house, trips every year. If they would put half of what they spend on this away instead, they could all retire at age 50.
I have no sympathy for those who are in over their head

re Al- great for you...but us joes only have so much money at the end of the month. Iam a religous saver and thank god. Husband repeated job losses cost us $$$
now I am going to be on my own- staring again new at 50 and yes now I will have a house car debt ect

I live frugally and within my means -But I will not be able to retire at 65

After a life time of trying to stay out of debt, and failing miserably, the only way for me to retire is to take what I have at 65, live well and buy a bullet and use it when the money runs out. 3 years, I'm guessing. That's after CRA take their cut. Good news is I'll avoid being a vegetable in some government old folks warehouse.

The sad tale is that we keep working longer, harder and saving more, living less while the top coats sit and splurge doing nothing. Publicly traded company CEOs make more in a day than the country's median income. Stop the gravy train. We have become a slave nation similar to the Byzantine empire. Wearing LV on debt isnt going to make me otherwise.

We should go back to the barter system. Produce/Work and thats your real currency. Not leeching off the poor on minimum wage or licking interest based loans.

I live a good life but we have allways been big savers. like Al said I have seen so many people get in and over their head for no reason other than keeping up with the jone's family via vanity.

I think i am the same age as Al (39) I thought be totally out of debt with 2-3years as well and be able to function/live pretty much off of rental income from a couple places we have. I could pay the debt off now with a term deposit I have but I don't really want to sink my own money into this when my interest rate is 2.75% on my mortgage on the rental.

Also like al said, i have little sympathy for people who are in over their head. My wife and i didn't get wealthy from spending money, that is the opposite of wealth. We are wealthy because we saved our money and underconsumed, That's it, no great stock picks, no roulette wheel, no inheritence, no free rides. Just saving, paying off debts early and underconsumption.

Reality Check: Both my husband and I were single parents without spousal support. When we met there was near nothing. Ten years later and 1 year nearing his retirement we have very little. We live on a shoe-string budget. Two mortgages, a small car loan and very little equity. I have professional designation and I've been looking for work for 2 years now. I am CANADIAN!

I have worked for the government for the last 30 years. I am fortunate to be in a Government Pension, and CPP. There were days that I wanted to quit and have my own business. I have seen so many friends regret that decision. My wife and I will be ok and can do that around age 60. That's just around the corner. However, we won't be staying in our expensive home. Probably we will sell and pay off debts and rent a nice appartment, and travel. Life is short.

Reality check london, you are in that situation because you allowed it to happen. I'm a little tired of woe is me of this day and age. People, perfectly capable people complaining and whinning like little girls that the world has been unkind. My wife and i came from nothing, less than nothing. I had around 50k in debts when i left school and worked my lower half off for the first 5years of our married to do so. We didn't even have a wedding ceremony or a honeymoon.

My wife went without as did i for the first 5-7years of our marriage while our friends all took lavish vacations and bought expensive cars. Now though all of their home equity has vancished and all they have left is the debt of that and 7year old BMWs that need new everything. We own our house outright, we own other things as well and have one little mortgage left on one property that's it. it's taken 15years to climb out of the hole but when this is all said and done we are sitting pretty (2014 latest). I will continue to work because I like my job and i work 2.5days a week anyway. My wife will be done with her business and will be living off of our rental incomes.

The average person has 30 good working years to save money and figure things out, i don't have any sympathy for people who don't underconsume and save a nest egg. You are a burden on everyone else and what kind of precident does this send to people; it's ok to be a failure? the gov't will help you. gov't? that means the tax payers, working people that did the right thing.

You should certainly be debt free before you retire. What it really means is that many people will have to sell their homes at the same time in the very near future. That will translate into a glut of homes with a For Sale sign that will force prices down. These same people where planning in this money to pay off debt and down size to a smaller home or renting. The expensive homes will go down in price but the lower cost homes and rent will be in short supply that will be much more expensive. Supply in demand!

It is very important to note that the type of job you have or the type of work you do is very important when considering how fast you can pay off debt and how much you can save. Sometimes you cannot pay off debt simply because you don't earn enough...and it's not because you live extravagantly...it's because many things in life are expensive.

In regards to Al - you speak of all the people you know that went on lavish vacations and buy BMW's which has lead them into debt. Well, there are many people who don't do any of those things are still in debt. I will use my own mother as an example. My parents were divorced when my mom decided to go back to school. When she was two years into her degree my father died. This left her with a choice to either waste the money she had spent on an education and continue to work at the bank earning $12/hour raising three kids - or to finish her degree and struggle. Rack up debt that she wasn't actually sure she could pay for. When she graduated wtih her four year degree she didn't get a job right away. She applied for anything and everything that would utilize her degree but a BA wasn't good enough. She had a choice, go back to her $12/hour job and raise 3 kids with $40,000+ debt, or get her masters degree and hope to get a better job. She went with the latter and obtained her master's degree. When she graduated wtih her master's she obtained a job that had a comfortable income.

My mom might not retire debt free. And it is NOT because she didn't know how to live modestly. My mom never left the country until she was 48, could count the number of flights she's taken on one hand, and has never owned a brand new vehicle. She's nevery bought clothing or accessories that were brand name for herself, or for us kids.

Anyways, my point is that those who seem to think that the poor are weak, uneducated, and lazy REALLY need to open their eyes. Sometimes BAD things happen to people. A job loss, a death in the family, a child born with medical conditions...numerous things.

We all live in this world together and must be a COMMUNITY. We are all responsible for the well-being of others.

I am working my butt off right now so I can live a secure life. I will not for one second believe that I am entitled to everything that I have because of my work ethic. Something could happen in my life that could change it on a dime. And I pray that I am surrounded by people that are not so individualistic in thought that they would watch me suffer. People need to start working together and caring about eachother.

Dana it's not that people don't care about each other. However, it's noone's responsibility to look after you or your mother.
Your mother may have done the right thing by obtaining her BA. I don't know. However, you have to think long and hard BEFORE getting a unversity education. I have one. For myself and many of my friends that I met in University, it was a bad choice. I accept my bad choice and it's up to ME to get on with things and right MY bad choices.
When I read your story about your mother, the first thought that came to mind was, she shouldn't have gone for her master's. Each degree that you obtain in university is VERY expensive. You must research and think it through thoroughly. Anyway, after obtaining her BA, she should h ave gone into the workforce, at a low-paying job while still searching for something better. Would it have been difficult? Yes. That is the way our system works though.
Anyway, will I be debt free when I retire? Yes.

At 49.5 I will retire ( enjoy life, my way ) in less than 10 years debt free. We are very fortunate. D.I.N.K. $100k gross per year. My wife has a defined contribution plan. With a little education we have had well paid non government jobs for 20+ years. We pay all bills, extra on mortgage and save $15,000 RRSP a year. Never been out of Canada. Two vehicles over 12 years old. Golf, fish spring/summer/fall. Bought a condo, sold it 12 years later for almost double. Bought a rural property for next to nothing and put 1/3 down on a house. Rent out basement. Sell house, build new one, kick back on deck. If I can't pull it off after all that, it is because the world ended!! It sounded like a good plan 15 years ago and it is working well for me. Good luck to all of you.

Due to health issues, 7 years ago, I felt forced into retiring at 56 . Luckily, I had no debt at the time but the company non-indexed pension is just barely enough to cover normal expenses, forget the nice vacations. Thank god the CPP came into the mix when I turned 60 which really only recovered the buying power I had when I retired. But, hey, I am not really complaining, I am enjoying the leisure time and my time is limited anyway so I m not going to sweat the inflation factor.

In my opinion, some debts are good, some are bad. Good ones (e.g., up to a max of 25% loan capital investment) are those that pay steady (based on historical data) but increasing dividends, whose carrying charges being tax deductible, with a potential of increasing capital gains. Bad debts are those whose carrying charges are not tax deductible but are cumulatively added to the original amount of loan, if the balance owing is not settled within a fixed period. These are convenient vehicles for short term loans, however, but the originally loan capital must be addressed within a fixed time line. Would be ideal if one could retire to such a situation.

Trixie - After my mother recieved her BA she did stay in the workforce for 2 years trying to find a job which utilized her degree. It was then that she went back for her Master's.

Also, you say " it's not that people don't care about each other. However, it's noone's responsibility to look after you or your mother." That is completely contradictory. You are saying that we as people have no responsibility to take care of eachother...but we do "care" about eachother.

Also, I like how you make it sound as though my mother going for her Master's was taking the "easy" route.

I am glad that you will retire debt-free.

I appreciate that you have taken the time to debate on this topic; however you have ignored the basis of my argument, or perhaps I haven't made it clear enough. There are life situations that happen to people which prevent their "plan" from working out. My whole point is that when my mom started university she thought there was another person helping to raise her kids. She never would have expected my dad to die so young. Once that event happened, she made decisions that made sense for her at the time. I am not trying to debate whether my mom made the right decisions or not. I am simply using her story as an example of how what may seem like a financially stable decision at the time, may turn out not to be because of extenuating circumstances. That it can happen to anybody, and that no one should be able to pat themselves on the back for to long because it could happen to you to.