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Seniors’ Financial Literacy and the ‘Sandwich Generation’ Fallout

November can be a month of stark realities for many Canadians with Remembrance Day reminding us of past and present conflicts, a long winter on the horizon and shorter, darker days. It is, in some way, fitting that November is also designated Financial Literacy Month in Canada, as the increasing debt loads of many Canadian households make this an equally stark reality that needs to be confronted. This is especially true for the ‘sandwich generation’ who are struggling with their debt and finances while caring for their senior parents, an age demographic of particular interest to the new National Strategy for Financial Literacy.   

The steady rise in Canadians’ household debt has been cause for considerable concern for the Canadian government, with debt levels (as a percentage of income) having doubled since 1980. To confront this problem and to help Canadians become more skilled at managing their finances, the federal government has drafted a National Strategy for Financial Literacy, with the first of three phases launched in October, 2014. This phase, to the shock of many, focused on strengthening the financial literacy amongst Canada’s seniors, as reports had shown that seniors had the lowest financial literacy amongst all age groups. In fact, a report by the Vanier Institute indicated that Canadian seniors are 17 times more likely to become insolvent in 2010 than they were in 1990, the highest rate of any age group. With fixed incomes, rising costs and people living longer, many Canadian seniors are struggling financially. The notion of a relaxed retirement as snow birds has become a fading dream in the face of rising personal debt loads.

With a national strategy to tackle the problems of seniors struggling with debt, there is hope that some of the core issues can be addressed in the medium to long term. A national strategy to improve financial literacy, of course, takes time to implement and for the skills taught to positively affect peoples’ lives. In the interim, there are broader implications to the financial struggles our seniors are facing. These implications often start with the families of those seniors struggling financially.

A recent poll by the Bank of Montreal indicated that half of Canadians aged 45 to 64 are facing financial problems while trying to care for their children and their parents, a situation leading to the term the ‘sandwich generation’. The financial problems facing Canadian seniors, warranting a national strategy, are having a particular impact on this ‘sandwich generation’. One third of the poll’s respondents indicated that they were caring for a senior, with 39 per cent indicating this would hinder their own long term financial stability and retirement savings. Indeed, the poll showed that the sandwich generation respondents had, on average, only saved 32 per cent of their stated retirement goal.

The trickle-down effect of seniors’ financial problems onto their children’s own retirement plans identifies the need for a broader national strategy on financial literacy. As the ‘sandwich generation’ confront their household debt burdens, while also trying to care for senior parents that have financial problems of their own and are living longer, the question arises as to whether or not the ‘Millennial generation’ will receive an inheritance comparable to generations before them. Phase 3 of the National Strategy for Financial Literacy seeks to work with this younger generation, to make sure they have the skills to meet the financial challenges of the new economy, complete with substantive student loans, house prices that may be unattainable and a changing labour market. This national strategy needs to be successful to stem the ‘trickle-down’ effect of the current debt and financial crisis seen amongst our seniors to multiple generations.



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