Seniors today have never been better off financially and are four times richer than their parents were at the same age in the mid-1980s, according to a report from BMO Economics.
“Many Canadians 65 years and older have benefited from strong equity, bond and real estate markets, rising participation in the workforce and higher pension benefits,” says Sal Guatieri, senior economist with BMO Capital Markets.
The report analyzed a number of labour market and financial indicators affecting those 65 years and older, compared to the mid-1980s.
Jobs: Workforce participation has increased compared with three decades ago
- About twice as many seniors work today than three decades ago.
- The employment rate for people 65 and over has doubled to 13%.
- Meanwhile, overall labour force participation has increased, resulting in seniors having a somewhat harder time finding jobs because of more competition.
- Unemployment among seniors has nearly doubled since the mid-1980s, although its much lower than for other age groups.
Incomes: More seniors are receiving a paycheque
- Adjusted for inflation, the median income of people 65 and older rose 40% to $23,700 in 2011 from $16,900 in 1984.
- Seniors have increased their spending power faster than people ages 55 to 64 and 25 to 34.
Wealth: Older Canadians are wealthier, driven by rising stock, bond and housing markets
- Median net worth of households headed by someone age 65 and older rose more than four-fold (312%) to $460,700 in 2012 from $111,693 in 1984 (in constant 2012 dollars).
- Canadian equity returns, including dividends and after inflation, rose more than twice as fast in the past three decades than in the similar period before the mid-1980s.
- Today, the typical senior is nearly nine times richer than the typical millennial, a wealth gap between similar age groups that has more than doubled since 1984.
Housing: More seniors own a house
- The home ownership rate for seniors is at 70.8% for 2012 compared with 61.2% in 1984.
- This implies strong demand for renovations, with seniors spending more on maintenance than other age groups.
- A growing number of households headed by a senior have a mortgage (12.1% in 2012 versus 8.3% in 1984).
Debt: More seniors have debt but small amount compared to assets
- The share of seniors with some type of loan has increased from 42.5% in 2012 to 26.1% in 1984.
- The amount of debt held by a senior is small at $18,000 in 2012, a fraction of total assets ($479,000) and less than annual income.
The report is the second part of a study; the first part found that millennials are on a somewhat firmer footing in terms of jobs, wealth and income than their parents were at the same age.
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