​63-year-old wonders whether she can retire with $100,000 debt 

Vanessa may want to wait a couple of years and retire at 65 when she is debt-free, financial adviser suggestsPublished Feb 12, 2025  •  Last updated 33 minutes ago  •  5 minute read Join the conversation “The current worry about debt and retirement will be solved with comprehensive retirement income planning,” says Eliott Einarson. “A retirement plan will bring the clarity needed for her to retire with confidence.” Photo by IPGGutenbergUKLTD/Getty Images filesReviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page.Can I still retire with debt? This is not a question Vanessa, a lifelong saver, would have anticipated asking at age 63, but, a legal issue two years ago has left her with a $100,000 home equity loan and she’s worried.Article contentArticle contentUp until then, her plan was to retire this year. She owns a home in Ontario valued at $600,000, a personal registered retirement savings plan (RRSP) worth $404,000 invested in conservative mutual funds, and she’s been contributing to her employer’s defined contribution pension plan and group RRSP, which combined are currently valued at $604,000. “I’ve focused on maximizing my RRSPs each year. Once I start drawing that money down, I plan to prioritize my tax-free savings plan (TFSA), which currently has $63,800 in cash.”Advertisement 2Story continues belowThis advertisement has not loaded yet, but your article continues below.Sign In or Create an Accountor View more offersArticle contentVanessa is paying 5.29 per cent interest on the loan, which costs her $700 a month (her total monthly expenses are about $3,000). The loan matures in 2027. She plans to use her annual bonus ($10,000) to pay down the loan but wants to know if there is more she can be doing. Or whether she could carry this debt into retirement.Vanessa earns $122,000 a year before tax. Ideally, she would like to retire this year but she is thinking she’ll likely continue to age 65 because of the loan. Even when she does retire from her full-time job, she plans to continue working part-time, hopefully in a role that is more enjoyable, to cover monthly expenses and help her meet her retirement cash flow target of $70,000 a year before tax. Using a bank simulator, she expects her combined registered investments will provide $58,000 in annual income. “Does this target income seem reasonable?” she asked.Vanessa plans to stay in her current home for as long as possible and may take an annual trip, but otherwise anticipates her lifestyle costs will be similar to what they are today. She also wonders when she should apply for Canada Pension Plan (CPP) and Old Age Security (OAS) benefits.Top StoriesGet the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.We encountered an issue signing you up. Please try againArticle