Are bankrupt seniors harbingers of things to come?
Canadians over the age of 65 now have the highest insolvency and bankruptcy rates in the country, according to the latest family finances report by the Vanier Institute for the Family.
The population of those over the age of 65 has surged to nearly five million over the past five years, growing 14.1 per cent since the last official count, Statistics Canada says.
And the number of near-seniors — people aged 60 to 64 — grew faster than any other group, a pattern that will persist as boomers move up the age ladder.
None of this is a surprise to those who have kept an eye on projections over the years, but the reconfiguration of the Canadian population will require fundamental change in many different areas, from government services to health care.
The non-profit charity's 2011/2012 reportfound that seniors were 17 times more likely to become insolvent in 2010 than they were just 20 years before.
In that same period, the insolvency rate for people over 65 ballooned by 1,747 per cent.
“It’s an extreme, but we can see it as the tip of the iceberg,” said Nora Spinks, CEO of the Vanier Institute, who added that a larger contingent of older baby boomers might soon be in the same financial position.
As David Cork, the Director of ScotiaMcLeod, has pointed out, a very important group of seniors is now entering the 65 and over category.
“Among the many important events that will take place in 2012, there is one in particular that will recast the social and economic fabric of our country,” he wrote in the forward to the family finances report. “This year, the first of Canada’s Baby Boomers celebrate turning 65.”
Cork is referring to the more than 372,000 Canadian babies who were born in 1947. They are on the thin end of their generational wedge, outnumbered as they are by the roughly 479,000 Canadians born at the 1959 peak of the boom.
Although they are not the biggest cohort of boomers, Cork argues the 65 year olds “deserve our full attention as the harbingers of things to come.”
Statistics Canada's 2011 census data shows Canada now has a higher proportion of seniors than ever before, a demographic reality that will have far-reaching implications for health, finance, policy and everyday family relationships. Although many of the boomers and their parents are well-positioned financially, those who are struggling will soon run an unprecedented test on the system.
“If you think there’s pressure on things today, wait 12 years,” said Cork.
To read the full article: http://www.cbc.ca/news/canada/story/2012/06/22/f-bankrupt-seniors.html