Canada’s greying population gives rise to financial challenges

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financial challeges for the aging communityCanadians are living longer. This could have implications on how individuals manage their finances.

The 2016 census data from statistics Canada was released in May, 2017. For the first time in the survey’s history, seniors outnumber children.

Seniors, aged 65 and over, account for 16.9 per cent of Canada’s population, just slightly larger than the 16.6 per cent of children under 15. 

The census also reported one in eight seniors is aged 85 or older, and the proportion of Canadians over the age of 100 rose 40 per cent.

According to Statistics Canada, seniors could make up one quarter of the population by 2036.

Older people consume more medical services which means the current pressures on delivering healthcare will continue to rise. In the land of “free” healthcare, the obvious question is who will pay?

A large part of our taxes is used to pay for healthcare. That cost is going to rise significantly.

The census revealed the number of working-aged Canadians between age 15 and 64 years old is decreasing.

A shrinking workforce paying taxes to support the healthcare costs of a bulging senior population is a recipe for financial failure.

Individuals who are planning for retirement in today’s environment might assume medical costs will remain government sponsored.

People rarely consider paying for medical services when planning for their later years.

There will be great political pressure aimed at the aging baby boomers to pay for certain medical costs. Economically, younger generations will not have the numbers of actively working taxpayers to pay the bills.

That also raises the question real estate values. Will house prices rise or fall?

Older homeowners eventually sell. If there are not enough younger people in the population to buy their houses, will real estate prices decline? If seniors can’t sell their assets, how will that affect retirement plans?

One of the ways Canada grows its population is through immigration.

However, a fairly steady stream of new Canadians arriving every year since the 1980s has still seen an aging of the Canadian population.

The good news for the younger generation is caring for an aging population provides a lot of job opportunities in the healthcare and social assistance sectors.

Jobs that require significant education and training and jobs that require a caring and generous attitude.

What we know is that the proportion of older Canadians is increasing and the generation that will feed the tax base is declining.

This will have financial and political implications on how to pay for healthcare services, what type of jobs might be available, and how this will impact house prices.

It is impossible to predict the outcome.

However, it is logical to accept there could be structural changes, and that will impact how Canadians need to manage their finances.