As if to reinforce the image of a “golden generation” of prosperous retirees, a new survey by BMO Economics, part of Bank of Montreal, shows that seniors are four times better off than their parents were at the same age in the mid-1980s.

As if to reinforce the image of a “golden generation” of prosperous retirees, a new survey by BMO Economics, part of Bank of Montreal, shows that seniors are four times better off than their parents were at the same age in the mid-1980s.

The report from the firm, which is the second part of a study - the first part was released in May – also found that those aged 25-34 years, are on a somewhat firmer footing in terms of jobs, wealth and income than their parents were at the same age, but are juggling increased debt and higher housing costs.

The report adds fuel to debate on whether today’s generations have an easier or hard set of challenges than their equivalent age cohorts a few generations ago. In some countries, it is claimed that the younger generation suffer from reduced job security and must contend with rising house prices and student debt. On the other side of the coin, they typically don’t have to serve in the military and have access to services like cheap air travel and the wonders of the Internet.

The report analyzed a number of labor market and financial indicators affecting seniors - those 65 years and older, compared to the mid-1980s.

"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," said Sal Guatieri, senior economist, BMO Capital Markets. "The financial position of young families has improved since the 1980s, but has greatly lagged seniors. Barring a high-paying job, most young people will be pressed to replicate the financial success of their grandparents and parents,” Guatieri said.

In terms of jobs, workforce participation has increased compared with three decades ago; about twice as many seniors work today than three decades ago and the employment rate for people 65 and over has doubled to 13 per cent. Meanwhile, overall labor force participation has increased, resulting in seniors having a somewhat harder time finding jobs because of more competition, the report said.

Among other details, the report said that when adjusted for inflation, the median income of people 65 and older rose 40 per cent to $23,700 in 2011 from $16,900 in 1984. Seniors have also increased their spending power faster than people aged 55-64 and 25-34 years, it said.

Wealth
Older Canadians are wealthier, driven by rising stock, bond and housing markets, the report said. Median net worth of households headed by someone aged 65 and older rose more than four-fold (312 per cent) to $460,700 in 2012 from $111,693 in 1984 (in constant 2012 dollars), the report said.

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, it said.

In terms of housing, the report said the home ownership rate for seniors is at 70.8 per cent for 2012 compared to 61.2 per cent in 1984. A growing number of households headed by a senior have a mortgage - 12.1 per cent in 2012 compared with 8.3 per cent in 1984, the report added.