Aging Population, Canada Vs US

I was looking around on this census data site. Canada and the US are fairly similar right?

Well, what I found kind of shocked me. I started by looking at the US data and I found that the ratio of working age (20-64) to retirement age (65+) people was increasing slightly in the US from around 1995 and that in 2007 the percent was essentially the same.

The graph below actually has the US data offset by one year because I don't know how fix that in excel. A one year offset doesn't change the picture that much. With all we constantly hear about an aging population I expected that ratio to be continuously declining in both the US and Canada. It looks very bad for the US that their finances have so grossly declined and they haven't even begun to be hit by an increasing percent of their population in retirement age.


Click on graph for bigger image.

That left me extremely curious about what Canada's projections look like. At first I just looked from 1996 to 2006 and I found that the percent 65+ had increased from 12.47% to 14.6% of the population, a 17% increase. To Canada's credit, not only was this enormous increase to social programs absorbed, but $100 billion of federal debt was repaid.

But, then later I went back to look at the longer term projections. That was cause to feel ill. Canada's declining birth rate is going to be a killer in terms of supporting our aging population. If you look ahead to 2026 or 2025 in the US that ratio of about 2.4 for Canada versus 3.1 for the US means the burden per working age person is about 1/3rd more in Canada than the US.

Disaster is an understatement. Fantasy would be a good expression for people's expectation of collecting any thing near what they think they are getting in their pension.