BY: FAZAAD BACCHUS
Developed countries are faced with a significant problem. Their population is aging. In developing countries, the situation is quite the opposite where the younger population is growing faster than the older one. Canada is a developed country, facing such a problem. The ageing population is growing at a rapid rate where the younger generation and workforce will be too small to support it.
How did this happen? Well, let’s look back 120 years ago. Typically, Canada was in a still somewhat rural state, most of the babies were born in either a rural community or farm. Actually, the population was a mere 5 million at the turn of the 20th century. With no television to watch, parents were having anywhere from as little 8 to as much as 13 children. This was not only common for Canada but for the rest of the world as well. Life expectancy was much lower in those days and there were higher incidences of infant mortality. There were no antibiotics, no pasteurized milk and common illness like polio, diphtheria, and tuberculosis took life at a rapid pace.
Sixty years later, the development of medicine and vaccinations began. Life expectancy grew, infant mortality decreased and people started living longer in general. Fast forward another sixty years to present day and the picture of the world has changed significantly. Canada now has a population of over thirty-five million people, many of whom are baby boomers and heading into their ripe old age. The internet is here, and people are learning all about nutrition, health foods, exercise and relaxation techniques etc. Access to clean water and food has resulted in fewer diseases, and as always, prevention is better than cure.
One of the most significant advances is in the world of medicine; it has also developed where many can have had an extension on life. There are now cures for certain types of cancers, diabetes can be managed, and heart patients can monitor their blood pressure at home and so forth. Thirty years ago, if someone had prostate or breast cancer, it would most likely end in death, today the situation is quite different with full recovery in many cases.
So, you can see why the population is living longer. But what sort of problems can living too long bring about? First, there is the problem of running out of money. Many Canadians live paycheck to paycheck and have not saved enough for their retirement. Most people who have saved expect their money to finish somewhere around 85. So, what happens should you live past that age? And what if you are in a home where the medical bills are much more than you had anticipated? You could run out of money at a much earlier age. Can you depend on the social services like OAS to take care of you? In the next 20 years, there will not be enough working adults to facilitate the bill that is required by the seniors. OAS is expected to have a deficit of 30 billion dollars.
There are many issues that the ageing person will face including, financial, medical, care and estate planning. Over the next few weeks, we will address some of these and how to best prepare for them.