Seniors today have never been better off financially. And they are four times richer than their parents were at the same age in the mid-1980s, according to a new report from BMO Economics, released today.
The second part of a study, the report examines market and financial indicators affecting seniors (those 65 years and older) compared to the mid-1980s the first part released in May found that Millennials — those aged 25-34 years — are faring better in terms of jobs, wealth and income than their parents were at the same age, but are juggling increased debt and higher housing costs.
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 percent.
- Labor force participation has increased, resulting in seniors having a harder time finding jobs because of more competition.
- Unemployment among seniors has nearly doubled since the mid-1980s, although it is lower than for other age groups.
Incomes: more seniors are receiving a pay check
- Adjusted for inflation, the median income of people 65 and older rose 40 percent to $23,700 in 2011 from $16,900 in 1984.
- Seniors have increased their spending power faster than people aged 55-64 and 25-34 years.
Wealth: Older Canadians are wealthier, driven by rising stock, bond and housing markets
- Median net worth of households headed by someone aged 65 and older rose more than four-fold (312 percent) 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 percent for 2012 compared to 61.2 percent in 1984.
- This implies strong demand for renovations, with seniors spending more on maintenance than other age groups.
- Growing number of households headed by a senior have a mortgage (12.1 percent in 2012 vs. 8.3 percent in 1984).
Debt: More seniors have debt, but small amount compared to assets
- The share of seniors with a loan has increased from 42.5 percent in 2012 to 26.1 percent in 1984.
- 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.