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Freedom Never: Some Canadians seem destined for the grave still buried in debt

Briefing highlights

  • Many seniors still carrying debts
  • Global markets struggle after Fed
  • New York futures up
  • CIBC boosts dividend as profit slips
  • Magna raises dividend amid record results
  • Loblaw quarterly profit falls
  • Concessions help boost Cineplex profit

Freedom whenever

Call it Freedom Never: Many Canadian seniors can't shake their debts, raising the question of whether a "worry-free retirement may be a thing of the past," as Sun Life Financial puts it.

The insurance giant found in a Canada-wide survey that one-quarter of retirees are still juggling debts, which is in line with what other evidence has demonstrated.

"From living with a mortgage to unpaid credit cards, retirees can find themselves facing financial challenges in their golden years," Sun Life said in releasing details of the mid-October Ipsos survey of 2,900 people.

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"Baby boomers are no stranger to today's increased financial demand; in fact, one in five (20 per cent) retirees are still making mortgage payments," Sun life said.

"The financial strain doesn't stop there," it added, noting its study showed "retirees still use credit some of the same ways they did before retirement."

Setting mortgages aside, the survey indicated 66 per cent have upaid credit cards, 26 per cent are still paying for their cars, 7 per cent for health expenses, 7 per cent for holidays or vacation properties, and 6 per cent for home renos.

Sun Life's findings follow a Statistics Canada report that showed 58 per cent of families led by seniors could claim they had no debts in 2016, compared to 72.6 per cent in 1999, though a better showing than in 2012 when it was 57.5 per cent.

That same report showed that among senior-led families, almost 14 per cent still had a mortgage, up from 7.7 per cent in 1999.

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Stocks, loonie hit

Global markets are struggling again after Wednesday's late plunge, and the Canadian dollar is well below 79 US cents.

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Tokyo's Nikkei lost 1.1 per cent, and Hong Kong's Hang Seng 1.5 per cent, though the Shanghai composite rose 2.2 per cent.

In Europe, London's FTSE 100, Germany's DAX and the Paris CAC 40 were down by between 0.2 and 0.9 per cent by about 7:50 a.m. ET.

New York futures were up.

The setback Wednesday came after the Federal Reserve released the minutes of its last meeting, indicating the economy is perking up, and consumer prices with it.

"The U.S. central bank believes it will reach its inflation target of 2 per cent, but they are not afraid of the cost of living becoming too high," said CMC Markets analyst David Madden.

"Traders are fearful the U.S. central bank might quicken their pace of interest rate hikes," he added.

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"The reaction by traders sent the yield on the U.S. 10-year government bond to 2.95 per cent - its highest in four years."

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CIBC raises dividend, posts dip in profit

Canadian Imperial Bank of Commerce raised its dividend and sailed past analysts' expectations despite a dip in profit to lead off earnings season for Canada's big banks, The Globe and Mail's James Bradshaw reports.

The bank's earnings were bolstered by its efforts to expand its U.S. footprint amid a strong economic climate with rising interest rates.

CIBC earned $1.33-billion, or $2.95 per share, for the quarter that ended Jan. 31, down 5.6 per cent from $1.41-billion, or $3.50 a share, a year earlier.

But when adjusted to exclude certain items – including a $299-million gain on the sale of real estate a year ago, and an $88-million writedown due to U.S. tax changes this year – CIBC said it earned $1.43-billion, or $3.18 a share.

The bank boosted its quarterly dividend to $1.33 from $1.30.

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Magna boosts dividend

Magna International Inc. boosted its quarterly dividend by 20 per cent as it posted record fourth-quarter results.

Sales climbed to a record US$10.4-billion from US$9.3-billion a year earlier, while profit attributable to Magna rose to US$556-million from US$478-million.

Diluted earnings per share hit a record US$1.53 from US$1.24, the Canadian auto parts giant said as it increased its dividend to 33 US cents.

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