Toronto seniors now have higher average incomes than young adults

By: Lisa Coxon on May 8, 2019

Seniors in Toronto are now earning more on average than young adults, according to a study released Monday by the United Way of Greater Toronto.

The study, titled “Rebalancing the Opportunity Equation,” found that over the past few decades — specifically between the years of 1980 and 2015 — Toronto seniors (those ages 65+) experienced a 54% increase in their average annual income, which shot up by over $17,000 — to $49,400 from $32,200.

During that same time period, people between the ages of 25 and 34 in Toronto experienced a $500 dip in their average annual income, decreasing from $42,300 to $41,800.

Those aged 35 to 64 in Toronto boasted the highest average income of all age groups in 2015, at $67,600. (All incomes are in 2015 dollars.)

The study also revealed that racialized groups in the GTA have gotten poorer over time, while non-racialized residents have gotten wealthier.

“Incomes for racialized groups have not increased in 35 years and the income-gap between racialized and white groups has increased,” the report states.

Some examples cited in the report:

  • For every dollar earned by a white person in Peel Region, a racialized person in the region earns 69.2 cents.
  • For every dollar earned by a white person in Toronto, a racialized person in the city earns 52.1 cents.
  • For every dollar earned by a white person in York Region a racialized person in the region earns 66 cents.

In 1980, Toronto seniors were at the bottom of the income ladder. But in 2005, that began to change.

“For seniors, there has been a clear and significant shift away from the bottom quintile… this analysis shows that young adults have become relatively poorer over time, while the economic prospects for seniors have improved,” the report states.

Seniors have inched closer to the top of the income ladder and now surpassed young adults thanks to a growing number of them taking advantage of government benefits, like the Canada Pension Plan (CPP), Old Age Security (OAS), and the Guaranteed Income Supplement, which is paid to low-income seniors.

Those benefits haven’t changed much, but as Malcolm Hamilton, a pension industry consultant, told the Toronto Star, a much higher number of seniors are collecting them.

“This has been changing for a long time,” he said. “And there is never just one explanation for something like this.”

Now that baby boomers are retired, more women are collecting CPP than the generation prior.

“Because there were more women working,” Hamilton explained. “It’s not so much that the program has gotten more generous as it is that more people are using it,” said Hamilton. “In the 1970s, a retiring woman would have little work history.”

In fact, Hamilton said that seniors don’t need as much income in retirement as the banks tell us they do, since seniors usually have paid-off mortgages, empty nests, and no requirement to actively save for retirement.

“The idea that you need to be getting 70 per cent of your pre-retirement income is fiction,” he said.

“We have exaggerated the amount of money seniors need to live comfortably. Financial institutions) have an obviously vested interest in getting people to save more, even when they don’t need to.”