Aging Canadians most financially vulnerable just prior to age 65

The National Institute on Ageing (NIA) has published its 2024 Ageing in Canada Survey of Canadians over age 50 to gauge the evolving realities of ageing in Canada.

In the financial security section of the report (NIA also looks at social well-being and health and independence measures) they find that only one in three Canadians over 50 say they will be able to retire when they want to. One in four Canadians over age 50 have saved less than $5,000 for retirement.

Poverty-level standard of living 

The study also looks at a relatively new indicator in Canada, the Material Deprivation Index (MDI), developed by researchers at Food Banks Canada (the measure has been used in Europe for decades), which reveals that 22 per cent of those over 50 experience a poverty-level standard of living. For those over age 65 that number sits at 14 per cent.

The proportion of those who say their income is good enough to allow them to save, meanwhile, has increased from 33 per cent in 2023 to 39 per cent in 2024. The number of those who say their income is just enough to avoid major problems sits at 36 per cent in 2024. At the other end of the spectrum, the number of those who report having a hard time financially, has remained unchanged at seven per cent since 2022.

“Most Canadians aged 50 and older report stable or improving financial well-being with more able to save in 2024 than in 2023,” they write.

That said, they add that 23 per cent said their income is insufficient for their current or long-term needs. Financial challenges were most likely to be reported by respondents in the 50 to 64 age category. Those without workplace pensions and those reporting poor or fair health were also likely to report having financial challenges. “Women, single-person households, renters and those with lower education levels are also at greater risk of poverty,” they add. Among those who rent their homes, for example, they say the deprivation rate is 38 per cent, compared to just 12 per cent among those who own their home. 

The report looks at the different income sources available to those over 65, explaining how each work, saying these collectively replace about 40 per cent of average pre-retirement income. “Those without any workplace pension were much more likely to be living in poverty (35 per cent) than those with a workplace pension plan (12 per cent) or other employer-sponsored retirement plan (11 per cent),” they write. 

Rising cost of living 

It also looks at affordability in retirement. Among those surveyed, 20 per cent said they could not afford an unexpected expense of $500, 16 per cent cannot afford regular dental care and 16 per cent said they cannot spend a small amount of money on themselves each week. “Rising cost of living (70 per cent) and fear of running out of money (48 per cent) are the top financial concerns among Canadians 50+,” they write. This is followed by 41 per cent who say they fear a reduction in government benefits.

Canadians over 80, meanwhile, were the most likely to report that their income is good enough to allow for savings; Canadians between 50 and 64 are considerably more likely to be financially stretched or struggling, in large part because many are retired for various reasons (health, spousal support and other circumstances beyond their control among them) but are not yet receiving the income supports available to the older cohort.

Regional differences 

The findings also reveal notable differences in financial well-being, both regionally and based on community size. Those living in rural regions were also less likely to report that their income was good enough to save or avoid trouble, just 32 per cent of rural Canadians over 50 said this, compared to 41 per cent of those living in cities and suburbs and 42 per cent living in towns or villages who said the same.

Quebec, meanwhile, had the highest number of respondents, 46 per cent, who said they have enough income to save. In all other provinces, this ranges from 31 to 39 per cent. (The report looks in some detail at the policy differences in place in that province.) “Policymakers across Canada would benefit from examining the factors driving regional differences,” they write.