The Cliché of the Financially Frail Senior Needs to be Retired

Aug 5, 2022

It’s something of an article of faith that seniors are, in general, a lot less savvy about money than they should be. Is this true?

Not necessarily, as it turns out.

In fact, despite rising inflation most seniors are staying afloat. According to the results of a recent Carrick on Money research survey – Rob Carrick is a well-known financial columnist with The Globe and Mail – some interesting insights were revealed when it comes to seniors and their financial situation.

Interpreting the results in his May 2022 commentary, Mr. Carrick concluded that the survey results suggested that many seniors, retired or otherwise, are doing a pretty good job of managing their finances and are not as worried about inflation as one might have expected.

  • Of the 1,748 people who responded, 15% said inflation isn’t an issue in their lives
  • 41% said they find inflation a modest annoyance
  • Only 2% said they cannot afford their lives and are accumulating debt, while the rest said they were cutting back on spending

Another question in the survey asked respondents how inflation impacted their retirement savings.

  • 43% said inflation had little or zero impact
  • 41.5% said they’ll get by with a diminishing margin of comfort
  • 12% said they are concerned about the possibility of running out of money
  • 3% said they believe they will run out of money

Mr. Carrick also made the following observation: “Asked how well their overall retirement income is keeping up with inflation, 41% said they were ahead of inflation or neutral and 49% said they were losing ground, but not dramatically. Just under 11% said their income is falling way behind. Some seniors are clearly besieged by inflation. But the survey results are a reminder that seniors as a group are more financially resilient than we sometimes imagine. The cliché of the financially frail senior needs to be retired.”

A couple of years ago, Statistics Canada published the 2020 Canadian Income Survey. The study concluded that just 3.1% of people aged 65 and older lived below the poverty line, compared to 7.8% of people aged 18 to 64 and 4.7% of children under 18 years of age.

That same survey also found that 87% of Canadian senior respondents reported that they own and live in a house, condo or townhome. The overall home ownership rate in Canada is a bit below 70%, which means that in terms of real estate ownership, seniors in Canada are in pretty good shape.

Reports Mr. Carrick: “Roughly two million Canadians receive the Guaranteed Income Supplement for low-income seniors, a reminder that retirees living in poverty is very much a problem. But the overall financial resilience of seniors is a sometimes-overlooked reality.”

What About Today?

Since Mr. Carrick’s survey was conducted in 2020 in anticipation of an inflationary financial marketplace, it will be interesting to see how rising inflation impacts not only seniors’ retirement funds and their lifestyle, but everyone else’s as well as we enter the third quarter of 2022. While there are still grounds for optimism, the positive results of Mr. Carrick’s survey may no longer be as widespread. This is something to keep an eye on – and we will!

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