Homeowners with pensions faring better than others: Stats Canada survey

New research from Statistics Canada finds that “Canadians… 55 to 64 who have both a principal residence and an employer-sponsored pension plan” have, on average, a net worth that is “$1.4 million more than those who have neither.”

The Statistics Canada Survey of Financial Security, based on 2023 data, was covered in an article by Money Canada’s Nicholas Sokic.

The article notes that “those near retirement age who rented and did not have an employer-sponsored pension plan had a median net worth of $11,900.”

“The longstanding expectation is that families build up their assets and reduce their debts over their working years and spend down their assets during their retirement years,” Money Canada notes, quoting from the report. “Canadian families with low net worth will be more likely to need to work longer, may need more government support and may be at greater risk of poverty.”

What about those in the middle of those two examples? Let’s read on.

“Families with only one of these two assets formed another, separate group,” the article explains.

“Families who owned their principal residence but who did not have an employer-sponsored pension plan had a median net worth of $914,000 in 2023. At the same time, those who had an employer pension plan, but who did not own their principal residence, had a median net worth of $359,000,” reports Money Canada.

The article notes that younger people without houses or pension plans are building net worth “in other ways.”

“Many young families are trying to build their wealth in other ways, given the economic challenges of that generation. Among young families who rented their principal residence and who had no employer pension plan, 15 per cent had a net worth greater than $150,000 in 2023, compared to five per cent in 2019,” the article explains.

“Members of this group commonly held assets in real estate that was not their principal residence with a median of $350,000. The median in their RRSPs was $35,000, and the median in their TFSAs was $20,000,” the article continues.

“The median net worth of Canadian families in 2023 was $519,700,” the article concludes.

If there’s a message here, it’s that if you can’t get into the housing market – and it is increasingly difficult for younger people to do that – you need to set aside some long-term savings in other ways, such as through a workplace pension plan or personal retirement savings.

If you have such an arrangement at work, be sure to sign up and contribute to the max. Often, there is an employer contribution match that speeds up the building of your nest egg.

Don’t have a workplace pension plan to join? Don’t worry. An answer for you may be the Saskatchewan Pension Plan. Any Canadian with unused registered retirement plan room can join. Once you’ve joined as an individual member, you decide how much to contribute, and SPP does the heavy lifting of investing and growing your savings. When it’s time to retire, you can choose from such options as a lifetime monthly annuity payment, or the more flexible Variable Benefit.

Check out SPP today!

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