Why “The Lucky Few”, Are the Richest Generation (and Why Nobody Else is Happy About It)
Think The Lucky Few are not the Richest Generation? Here are three reasons we disagree:
- The median net worth for Canadian seniors 65 and over is $460,700 ($182,500 for Canadians under 44 years old)
- The poverty rate for seniors is 6.7% (15.1% for children)
- 42% of Canadian millionaires are 65 or older.
How did this happen? In the 1970s nearly 40% of Canadian seniors were poor. They had long been considered society’s most at-risk citizens. Younger Canadians were called upon to respect these elders and reward them for their hard work and sacrifice during the depression and World War II.
During the 1950s, just as the Canadian economy was taking off, the lucky few were in their 20s. Financial discipline, public policy and good economic timing set the stage for their upward climb:
- Jobs were up for grabs with no effort
- Government grants were available for university
- The Lucky Few were brought up to abhor debt
- They valued saving money
- They valued home ownership
By the 1970’s, the Lucky Few were in their early 30’s. Brought up to be cautious and conservative, they stayed in their jobs, qualifying for generous corporate pension plans, which were now standard. They continued to save money, opting to buy spacious houses to accommodate their burgeoning families, and taking modest vacations with their children. Other factors continued to accumulate in their favour:
- From 1984 to 2012, the TSX Composite Index (where many of the Lucky Few had their money), rose 530%
- The value of their homes rose by 430%
- After they retired, their knowledge and expertise were still in demand in the work force—they double dipped and contracted out, driving up employment for their sector to
12.9% - Old Age Security was available to seniors earning $70,000 and was only clawed back entirely if their income is more than $115,000.
As they approached retirement age, seniors got a major boost from the introduction of public benefits like Canada Pension Plan, Old Age Security, income splitting, and taxpayer-funded health care, which has helped push their poverty rate to 5%, one of the lowest in the Western world.
In 1980 the typical senior was four times richer than the average 20-something. Today, seniors from ages 70 to 90, are now on average nine times richer than their grandchildren.
In Seniors and the Generation Spending Gap, author Tamsin suggests that many of the trends and policies have come at the expense of younger generations. That’s led some to warn of a coming generational war, she warns, if public focus and resources aren’t shifted away from seniors to younger workers who are struggling far more than their parents ever did.
Adamson, of Silvera for Seniors disputes this outlook. She argues,
“All seniors are not wealthy and we need to be careful assuming they are. More to the point, most seniors do not live the high life, and in any case, whether or not they have any assets is a lot of noise compared t the real issue, which is the availability of quality care, facilities and service.”
She believes that many lodges, homes and long-term facilities are in need of upgrading and need resources to keep the their elderly inhabitants mentally, physically and socially healthy.
While the wealthiest seniors often make their own arrangements to live in higher quality retirement home with added services, seniors who have lower incomes and assets cannot. She encourages us to be proactive in insuring that tomorrows seniors have a safe, dignified, healthy environment.