The Wealthy Senior

Courtesy of Sandra Boyd, Posted 22 Jul 2014

Recent reports have highlighted the monumental shift happening in Canadian demographics. By this point, everyone is aware of the surge in the number of seniors in Canada, however, less attention has been given to the level of wealth possessed by this growing cohort. This week’s article provides an interesting glimpse into the dynamics of Canadian seniors’ wealth and spending habits.

Key Takeaways:
A wealthy group
  • Canadians 65 and older have benefited from generous pension plans, a decades-long bull market in equities and a similar run in house prices. During that period, the TSX Composite rose 530% and home prices grew by 430%
  • “Today, the typical senior is nine times richer than the typical Millennial” says Sal Guateri, an economist with Bank of Montreal
  • A report issued earlier this month shows that the median net worth of families headed by a senior was up 312% (to $460,700) between 1984 and 2012, even after inflation was factored in
Expensive habits
  • Luxury vehicle sales now represent 10% of the auto sales market, a figure that has doubled over the last ten years, and seniors could account for as much as a third of that market
  • Seniors are also spending on lavish vacations: ‘We are talking vacations where you spend $50,000. You get young seniors doing that.” says Keith Silverberg, president of the Suntastic Travel agency
  • While seniors are spending more and more on exciting vacations, luxury vehicles and home improvements, Lise Andreana, a planner with Continuum II inc., says they continue to accumulate assets by working and investing
Can’t stop, won’t stop
  • Seniors in Canada have the lowest unemployment rate of any age group
  • Statistics from Bank of Montreal show active employment for individuals 65 and older had risen to 12.9% in May 2014, up from 6.7% in the mid eighties
  • “They seem to want to know they have money still rolling in. There’s this real fear that once they draw down on the pot they’ll run out…” Says Ms. Andreana