Exploring the wealth of Canada’s seniors

Larry and Nadia Hately both retired more than ten years ago, but they’ve maintained a comfortable lifestyle.

The Hatelys are homeowners in Old Ottawa South. Both work part time – Larry as an architecture professor at Carleton University, and Nadia as a travel agent.

After just a few months of full retirement, Nadia says she was itching to do something else.

“Neither of us are real homebodies,” she says. “Although I like gardening and I like reading – that certainly wouldn’t fill my day.”

Nadia and Larry go on one or two “big trips” a year to Europe or South America, and they split the rest of the year between their cottage and their family home.

“For me, I work part time mostly because I like it, but also I like the money it gives me for travelling,” Nadia says. “I don’t think we’d be able to travel if we just lived on our pension.”

The Hatelys were able to pay off the mortgage on their home after retirement, and say they now have very few expenses besides their two cars.

“We find that we are living as well as or maybe even better than when we were both working full time, because a lot of expenses drop away. We seem to be doing even better than when we were working full time,” Larry says.

“We seem to be doing even better than when we were working full time.”

Nadia says both her and her husband had stable careers, and she adds that they have been steadily employed for most of their lives.

Sal Guatieri, senior economist at the Bank of Montreal, says many seniors today are better off than the generations before them, and may be better off than generations to follow. People are living longer, staying healthier longer, and working longer than ever before.

“In terms of job opportunities and wealth accumulation, the past three decades were a golden age for many people,” says Guatieri.

” The past three decades were a golden age for many people.”

Seniors have also seen a 40 per cent increase in disposable income since the 1980s, Guatieri says.

“Most of the improvement in spending power was driven by their increased participation in the labour force, and rising wages. Improved pension benefits in the last three decades have contributed to the spending power among seniors today,” Guatieri says.

He adds there are also more seniors working past the age of 65, due to the changing employment environment, which makes it much easier for people to work from home.

However, this isn’t true for all seniors.

Hugh Armstrong, a retired Carleton University professor, says that although some seniors like himself have had secure jobs and pensions, this is far from the reality for everybody.

“I think seniors are doing better than they used to,” Armstrong says. “But there are a lot of seniors who are at or below the unofficial poverty line.”

Older women in particular tend to be more at risk of living in poverty than men, says Armstrong. There are fewer senior women living in poverty now than there were in decades past, but poverty still affects women the most.

According to Statistics Canada, senior women’s poverty decreased from 11 per cent in 1998 to 7.6 per cent in 2008. However, the share of senior men in poverty is only 3.6 per cent, less than half of the number of women.

“[It is] women who are disproportionately disadvantaged across the board,” says Armstrong. In the past, women were less likely to have stable full time work, and they were also more likely to take employment breaks to raise children. Even today women still make only an average of 71 cents for every dollar made by men.

Susan Braedley, a social work professor at Carleton University, says that with part-time or informal jobs, many of these now senior women do not have pensions. If they do, their earnings are small – so they rely on government-funded programs. Women also tend to marry men who are older than them, and often outlive their husbands.

“When your spouse dies you may or may not have access to their pension income, so there’s many older women that are poor,” Braedley says.

Armstrong says some of these seniors are emotionally attached to their homes, and so they hold onto them for as long as possible. But if they are not physically capable of maintaining them, or the mortgage payments are beyond their financial abilities, these homes can become a burden.

For Larry and Nadia, their house is an asset. With Old Ottawa South’s high property values, the couple plans eventually to sell their home to pay for life in an assisted living facility or a retirement home.

Guatieri says housing markets are still relatively strong in major Canadian cities, where prices are still on the rise. Although this could be troublesome for younger couples wanting to invest in the market, some seniors who purchased years ago have seen their home value double or triple.

But the next generation of seniors will not be seeing the same increases in house or stock markets that their parents have witnessed, Guatieri adds.

“I do worry about the younger generations that will be becoming seniors over the next decade or so… I don’t think they’ll have it nearly as well off as the current generation.” Guatieri says.

“[It’s] highly doubtful we will see a repeat of that golden age for the next three decades.”