Indigenous and racialized seniors have much lower retirement incomes and higher poverty rates than their white counterparts, which a new study says reflects how economic marginalization and inequity follows people into their old age.
Overall, white Canadian seniors enjoy the most retirement security with an average yearly income at $42,800, way above the $32,200 for their peers in the Indigenous communities and $29,200 for visible minorities over the age of 65.
Based on 2016 census data, the report by the Canadian Centre for Policy Alternatives found 13.7 per cent of white seniors lived in poverty compared to 21.5 per cent among Indigenous seniors and 19.8 per cent among racialized seniors, according to the Low Income Measure After Tax or LIM-AT.
Hence, it’s not surprising that seniors from marginalized groups have to count on public pensions and benefits to make up for lagging retirement incomes, says the study, titled “Colour-coded Retirement,” released Wednesday.
“The data reveal that there are real consequences of economic marginalization and systemic racism. Elders and seniors are financially insecure in retirement, if they can retire at all, because the opportunities for saving are so limited,” says Hayden King, a report co-author and executive editor of the Yellowhead Institute, a First Nation-led research centre.
Senior white Canadians, who made up 85 per cent of the senior population in the country, have the most diverse sources of income of all groups.
About a third of their income comes from public pension sources such as the Canada and Quebec Pension Plans, Old Age Security (OAS), and the Guaranteed Income Supplement (GIS); a third from retirement contributions to work and individual pension plans; and the rest from investment and employment earnings as well as other sources.
In comparison, public pension accounts for 47 per cent of Indigenous seniors’ and 40 per cent of racialized seniors’ retirement income, respectively.
These two groups — accounting for 14.8 per cent of the population over age 65 in Canada — had less money to draw from their employers’ pension plan and own retirement savings, or investment income. They were more likely to rely on employment income.
RPPs and RRSPs account for a third of white seniors’ retirement income, versus 25 per cent for Indigenous seniors and 21 per cent for racialized seniors.
On the whole, racialized Canadian households have less spare money to contribute to those plans than white Canadian households. And when they do, their contributions are lower.
Chinese households were an exception with an average contribution of $10,000 in 2015, which was higher than the $7,600 contribution made by white households. In comparison, Black families only made a $4,600 average contribution.
“The overall low share of the racialized and Indigenous population that contribute to RPPs points to reduced retirement security for the next generation of workers,” the report warned.
Among racial minority groups, retirement incomes also vary among those who were born in Canada versus those who are immigrants.
While only 3 per cent of Chinese seniors and 1 per cent of South Asian seniors are Canadian-born, their average retirement income is higher than their immigrant peers.
In the case of Black Canadians, however, being Canadian-born offers no income advantage.
“Canadian-born Black seniors’ income is virtually identical to that of Black immigrants, with the result that Canadian-born Black seniors’ average income continues to be 25 per cent lower than Canadian-born white seniors’ income,” said the report.
“This provides us with insight into the continuing impact of anti-Black racism on seniors’ income.”
The study also shows the differences between First Nations, Métis and Inuit seniors’ income, as well as their respective contributions to RPPs and RRSPs.
First Nations seniors have the lowest average income of any Indigenous group, at $33,500 for men and $26,300 for women, followed by their Inuit ($39,900 and $32,150) and Métis ($41,765 and $28,285) counterparts. Métis seniors were most likely to contribute to private pension and retirement savings plans, while their First Nations peers had the lowest participation rate.
Researchers said there is also a consistent gender gap with senior women of all demographic backgrounds having lower retirement incomes and higher poverty rates than senior men.
The study found the overall racialized senior population’s total income averaged $33,900 for men and $25,000 for women. While visible minority male seniors’ average income is 36 per cent lower than their white male counterparts, senior racialized women’s average income is 26 per cent below their white female peers.
“It is only when the economic impacts of underlying racism and sexism are addressed that we will achieve equal access to a secure retirement for all,” said the 49-page report, funded by the Canadian Race Relations Foundation
It said the data shows that GIS and OAS pension — both adopted as anti-poverty measures — are crucial sources of income for senior women who are First Nations or racialized immigrants.
The increase in OAS by the federal Liberal government for those 75 and older in the 2021 federal budget is a step in the right direction to narrow retirement income disparities, said the study.
It recommends measures to eliminate barriers to equitable employment opportunities and increased access to workplace-based pension plans and retirement savings