There have been numerous theories about how baby boomers affect the economy as they move through different life stages. As retirement looms for the boomers there’s more talk about how this demographic will impact the economy at large. It turns out that Canada has one of the least generous public pension plans of any developed nation. This is good for the long term ability of the government to afford the cost of pensions, but brings up another potential issue: many boomers will face a large decline in their spending power.
The proportion of seniors in Canada’s population will balloon to as much as a quarter of the population by 2030, from 14 per cent now. Middle-class Canadians without a workplace pension plan or personal savings to fall back on face a sharp and sudden decline in living standards when they leave the work force.
With millions more retirees living on subsistence-level public pensions, the economy will see a lot less of the discretionary income that has normally fuelled consumer spending.
Many people in Vancouver seem to view real estate as the all-in-one strategy for retirement saving, but that approach hasn’t worked out so well here in the past, or in other cities currently going through a multi-year real estate market decline. Are you concerned about being able to afford retirement and are you planning ahead, or are you counting on the Canadian Pension Plan to be enough?
