New Canada CPP a Joke

[Occasionally]

And many people collect for much longer than their due. Can you imagine how your outlook would change if you planned for being retired as long as you worked? Living to 100 is well withing the realm of possibilities.

I hope that you have sat down and gotten educated about your retirement planning. Far too many people are ignorant about how or what to think of. For example, many people forget to consider the increased medical costs as you age. Many people have health plans that cover some of the other services like pharmacists but forget that those plans go away when you are no longer employed (I'm sure you don't like the reduced co-pay on drugs for the elderly either - you should save for your own medication...). Add in the growing number of medical services which are no longer covered by OHIP and I can guarantee you that many people's retirement savings will be okay only until their health becomes a problem.

I consider myself fairly well set up but even then I wish I had started saving when I started working.

I started budgeting and forecasting my estimated asset worth since I got my first real job in my mid-20s. First few years after university were crappy hourly jobs.

The first few years of a real office job didn't pay great, so my monthly balance was flat. Every dime I made went out for car, home, food, utilities etc.... I was breaking even for probably 3 years.

Then came promotions and better jobs paying much more. Selling properties and banking cash as my new home would be similar price than the original prices of the old home. So' I'd bank the difference in a cheque from my lawyer. Income goes up and to bank money, all I did was ensure my spending didn't go up as much as my income boost.

It's now gotten to a point, I have a spread sheet that has all my cash, investments, RRSP, home equity etc.... all planned out. Unless something lousy happens like I get fired, can never get a job again and my home burns down, I should be able to retire when I'm 60 with total asset value of $2 - 2.5 million. My home will be part of that, so my non-home assets will be the rest. Then I'll get whatever my pension pay out is as additional income years later. If I need to I'll move to a small low priced property outside the GTA. Quiet, inexpensive and it frees up money. At that age, I don't need to have my worth tied up in a high priced home.

Best thing for people to do is budget your $$$. Unless it's an emergency, never go into credit card debt. At worst, do a line of credit debt whose interest rate is a fraction of a CC. But I don't think people know about them. They'd rather go into 19% CC dent than a LoC at 5%. WTF? Everyone's home bank will give you a LoC.

 

[fuji]

I started budgeting and forecasting my estimated asset worth since I got my first real job in my mid-20s. First few years after university were crappy hourly jobs.

So what? So did I. I also qualify for retirement pensions from multiple countries. I have my own savings too.

None of which has any bearing on the debate.

Unless something lousy happens like I get fired, can never get a job again and my home burns down, I should be able to retire

Lots of things can happen. You might have a sick child and spend every cent you have trying experimental drugs to save her. You might try running your own business and fail.

Alternately not everybody plans appropriately, and this is the big point for which you clearly have no answer: some people don't have the discipline to save, they will blow the extra money on a big screen TV.

Judge them all you like, but the fact is that in Canada we will never just let them starve. We will spend tax dollars feeding and housing them.

Better for those of us who are paying taxes if those non savers be forced to contribute to CPP.

For responsibly savers, CPP just means we end up having invested in a conservative annuity that might be lower risk and lower return than we might have chosen, but as far as annuities go it's actually a pretty good one.

 

[Occasionally]

Again, what are you proposing for those who choose a new entertainment system over retirement savings?

Let them starve?

How about be responsible with your money and don't buy the entertainment system if you can't afford it?

 

[fuji]

How about be responsible with your money and don't buy the entertainment system if you can't afford it?

That sounds nice. What if they aren't?

Are we really going to let them starve to death?

 

[benstt]

I got it. He wants his tax dollars to only support him. It's the same as complaining that my tax dollars pay for my medical care PLUS that of poor people or complaining that the government is paying for roads I'm never going to use.

Nope, not at all. I was discussing the difference between being self-employed and employed, and that the money to contribute for both an individual's own retirement savings or pension and contribute their share to public pensions comes out of the total comp in both cases, but in different forms. This was not a complaint. I hope that clears up the confusion.

 

[Occasionally]

Lots of things can happen. You might have a sick child and spend every cent you have trying experimental drugs to save her. You might try running your own business and fail.

I don't have kids and I don't run a business. So my planning is easy.

Alternately not everybody plans appropriately, and this is the big point for which you clearly have no answer: some people don't have the discipline to save, they will blow the extra money on a big screen TV.

Judge them all you like, but the fact is that in Canada we will never just let them starve. We will spend tax dollars feeding and housing them.

Better for those of us who are paying taxes if those non savers be forced to contribute to CPP.

For responsibly savers, CPP just means we end up having invested in a conservative annuity that might be lower risk and lower return than we might have chosen, but as far as annuities go it's actually a pretty good one.

You're right, lots of people can't plan appropriately. So the best answer is to bail them out? How about make them have some accountability in life. If I can budget, why can't other people? I started budgeting when I started out and never went into CC debt. The only times I paid interest were the few times I forgot to pay at the end of the month. I paid the next day, so I paid maybe $5 in interest in my life. That's because I didn't go overboard like an idiot maxing out credit cards buying stupid shit with never ending CC bills.

As for pension pay outs, it'll be a bonus for me and not a life and death monthly cheque. I'm glad I'll get it despite not really needing it years from now. But hey, I paid into it, so its fair I get some of it back.

 

[fuji]

You're right, lots of people can't plan appropriately. So the best answer is to bail them out? How about make them have some accountability in life.

I'm not hearing the answer. How are you actually going to make them have some accountability?

I don't want to have to bail them out either which is why I like that at least a large fraction of their retirement will be paid for with their own money via CPP.

Without that, seriously, what is your proposal? You either bail them out, or let them starve. I'm trying to imagine a Canadian government deciding to ignore a bunch of senior citizens who failed to save, who are on their second month without food, looking like concentration camp survivors, about to die.

I don't see it happening. They'll get fed. And housed. By the taxpayer.

 

[benstt]

Ihen I'll get whatever my pension pay out is as additional income years later. If I need to I'll move to a small low priced property outside the GTA. Quiet, inexpensive and it frees up money. At that age, I don't need to have my worth tied up in a high priced home

People plan for inexpensive retirement, where they really should be wondering how much a good retirement home will cost them down the road.

 

[Occasionally]

I'm not hearing the answer. How are you actually going to make them have some accountability?

I don't want to have to bail them out either which is why I like that at least a large fraction of their retirement will be paid for with their own money via CPP.

Without that, seriously, what is your proposal? You either bail them out, or let them starve. I'm trying to imagine a Canadian government deciding to ignore a bunch of senior citizens who failed to save, who are on their second month without food, looking like concentration camp survivors, about to die.

I don't see it happening. They'll get fed. And housed. By the taxpayer.

Who knows what the answer is.

As for accountability in how to conduct ones self and not blow their money in a wasteful way, I don't know how to get people to smarten up.

As I said, I plan of retiring with a few million bucks, so any pension payout is bonus. What I could do if I want to is purposely spend a bit more knowing that the pension payout can top me up. But I don't want to do that.

That;'s because in life, I believe in doing the best you can, earning a good living and not relying on the government to handhold you like a baby. When I got laid off decade ago, I could have sat around collecting a $400/wk UI cheque and chill. Forget it. I got my ass back to work in less than a month. I didn't get to collect one UI payout even though money off my paycheque goes to the UI fund.

Never been a fan of being a leech. Earn your way through life.

Same goes for paying people back (if I'm short on cash that day), paying for sports pools and anything like that. I'll pay back the person right away. Some people on the other hand will not pay, pay 6 months later, or hope the guy forgets.

 

[fuji]

Who knows what the answer is.

As for accountability in how to conduct ones self and not blow their money in a wasteful way, I don't know how to get people to smarten up.

As I said, I plan of retiring with a few million bucks, so any pension payout is bonus.

Well, I'm the same as you. I own multiple properties, and I have enough saved in various RRSP 's, IRA 's, 401k's, as well as additional savings in taxable brokerage accounts to fund myself in retirement. I'm debt free, I even bought my car with cash.

But I'm asking about others and we all know not everybody saves. Some people are up to their ears in debt. Some people are well intentioned until they lose their job and they lose everything.

But I thought of a way we can make all these people accountable! We can force them to put some money away every month into a fund that will pay for at least a subsistence retirement. No luxuries, but just enough so that they won't starve.

We can call it the Canada Pension Plan...

 

[basketcase]

...
None of which has any bearing on the debate.
...

Actually it does. It means he's not just talking out of his ass.

(then again this is the internet).


Other things I would like to see is governmental crackdowns on payday loan companies and regulations forcing CC companies to work with people to reduce/consolidate their debts before giving more credit but without massive government oversight there will be a large number of people who can or will not be able to save for a stable retirement. For example someone working minimum wage jobs will never be able to save enough for retirement. Same goes for people unable to work because of injuries etc.

So the question is what do we do with the people unable (and sadly those unwilling) to save for retirement? Do we just put them out on the street? Melt them down into soylent green? Send them to labour camps?

But yes, I am happy to work where I do to the point where I have had talks about buying out the owner. Haven't decided if I want to move forward with it (and he hasn't decided if he wants to sell).

 

[basketcase]

People plan for inexpensive retirement, where they really should be wondering how much a good retirement home will cost them down the road.

As I said, the concept of end of life care and necessary health care are topics many people want to avoid thinking about. Easier to just hope the kids put you somewhere not too bad.


Either that or a nice remote cabin in the woods where some hiker can find your decomposed body decades down the road. If you do this, have the courtesy to die in a rocking chair with an odd hat and a pipe in your mouth. Much more picturesque than a heap of bones on the floor.:drum: