This means adults currently in their 40s and 50s will have no money left for their own retirement, Spinks told The Catholic Register.
“For the first time, we’re seeing more retirees with significant debt and a portion of the population over 65 that has more than $100,000 in debt.”
The report also found that family income is not increasing on par with expenses.
“And because their income and expenses are so tight, it’s really difficult for them to save or pay off their debts,” she said. “Most of their debts are related to things like their own education expenses.”
The average debt load per household now stands at $103,000 while annual savings have decreased by two-thirds, according to the report’s findings.
To deal with this economic reality, families are having to find multiple sources of income.
“We’re seeing more families are supplementing their primary income with other kinds of work. So they have one job during the day, but they have a secondary job evenings and weekends.”
Longer lifespans have also had a big impact on pensions. Whereas planning for retirement used to mean preparing for a couple years, retirement now lasts about 25 years, said Spinks.
“The amount of time we’re spending generating income proportionate to our lifespan is only about a third. Whereas in the past, it was almost 75 per cent of our lifespan.”
But with longer lifespans come an array of social benefits, such as kids being able to get to know their grandparents and great-grandparents, she said.
“Families have adapted to that. Our social economic infrastructure, our employment structure and our labour market haven’t adjusted as quickly.”
The report also found that the income increases for the richest now surpass the total annual incomes of the poorest.
“If you make a couple hundred thousand dollars per year, your increase was equivalent to those that are at the bottom end in total,” said Spinks. “The disparities between the upper 20 per cent and the lower 20 per cent is significant and the gap is increasing.”
Looking forward, financial literacy and education about money management is an absolute necessity starting at an early age, she said.
“We need to help kids understand savings, expenses and costs right through to people planning and preparing for retirement.”
More youth, young adults facing long-term debt crisis
By Vanessa Santilli-Raimondo, The Catholic RegisterCanadians need to pay attention to increasingly high levels of youth and senior debt, said Nora Spinks, CEO of the Vanier Institute of the Family.
The Institute highlighted a looming crisis in its recently published report “The Current State of Canadian Family Finances.” The study looks at family incomes and expenses, family savings and debt and family wealth and net worth.
“We’ve got the young adults and young families with high levels of debt trying to make ends meet and then we have seniors who are declaring bankruptcy and that leaves those in the middle supporting their young adult children and their parents.”
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