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Preparing for a Pension Riot?
Connie Woodcock of the Toronto Sun reports, Preparing for a pension riot:
My
family knows me too well. They knew I wasn’t going to react well to my
birthday this year — I’d been worrying about it for months.
So
last weekend, they threw me a big, fat, happy-last-day-of-being-59
party with lots of food and wine and presents and jokes and even a
speech.And really, it helped — a little.
But
turning 60 is a traumatic event in your life any way you slice it.
And, no, 60 is not the new 40. No matter how much you keep up with pop
culture, no matter how many times a week you go to the gym, you’re not a
kid any more. You may even have to abandon the term “middle-aged”
soon.
In my 40s, it never occurred to me 60 would be such a
boulder in my path. Sixty-five, I thought, would be terrible — the day
society officially kicks you to the curb. But then my best friend hit
the big birthday and it turns out 65 isn’t that bad. They start sending
you cheques every month, they pay for your drugs and you get the
seniors’ discount.
What’s not to like?
Sixty, on the other hand, is the day it occurs to you that you’re old enough to be someone’s grandmother.
Mostly, it makes you stop and assess your life and where you’re headed.
So imagine my dismay when I discovered that by the time I get to age 65 there may not be a monthly cheque waiting for me.
I may have to wait until age 67 — or even 70.
The
federal government is being asked to consider raising the retirement
age two years to relieve pressure on the Canada Pension Plan.
A
report called “Is 70 the New 65?” released last week from the Mowat
Centre, a University of Toronto think tank, suggests raising the
official retirement age by two years would more equitably distribute
pension costs among younger and older Canadians.
It
shouldn’t come as any surprise to baby boomers. If you’ve been paying
attention, you’ll have noticed that many Western countries — the U.S.,
the U.K., Germany and Australia — have already hiked the pension age.
In France, they’ve had riots over it in the streets this fall.
But
I wonder what this will do to people at the low end of the wage scale
who have clung to their jobs for years with their retirement plans
geared to age 65.You’ll still be able to take your Canada
pension at 62, but it would be much reduced, beyond what it already is
if you take it early. And also last week, new stats show more Canadian
seniors living in poverty.
Remember “Freedom 55”? In Canada,
that’s only true for politicians and civil servants. There are lots of
perfectly employable people in their 50s who haven’t held a full-time
job since their 40s thanks to recessionary cutbacks. They can’t even
get job interviews.
Some of them have resigned themselves to
the situation and are now driving school buses or bartending or
clerking at Tim Hortons. They’re not going to react well to continuing
even longer.
In fact, Canadians have heard for years the CPP
won’t be there for them by the time they get to age 65. That, too,
turns out to be a myth since the CPP’s chief actuary has said it’s
sustainable at current contribution levels.
Critics have been
quick to point out because Canada raised contributions years ago, we
aren’t in the same situation as other countries. But we’re living
longer and the baby boomer bulge will start hitting 65 next year.
The
idea isn’t really on the government’s radar yet and no government
would want to be the one to actually do it. But I’m certain there’s
about to be a national debate.
Selfishly, I just hope it drags on so long that I’ll sneak under the wire.
I already discussed whether 70 is the new 65.
As governments clamor to reign in entitlement spending, they're cutting
everywhere and increasing the retirement age. Does Canada really need
to raise the retirement age? According to Bernard Dussault, former Chief
Actuary of Canada, there is no imminent need to do so:
Current CPP contributors pay too much (9.9% rather than 5.5%) to the CPP because their predecessors:
- did not pay enough into it (3.6% for 20 year, increased to 6% by 1996, etc.) and
- got full accrual of benefit rights after 10 rather than 47 years.
Why would/should we consider penalizing further the current contributors by increasing the pensionable age? The 9.9% remains somewhat sufficient to afford the payment of pensions commencing at age 65.
In
the end, I think there will be pressure to raise the retirement age. Is
this fair? Not if you're sixty and working on the assembly line or at
some job paying you low wages and wearing you down every day as you try
to get by.
There are no easy solutions to the pension conundrum.
Many Canadians over sixty and others around the world are just
beginning to come to grips with the grim reality that awaits them. Their
retirement dreams are slipping further away and along with them, their
standard of living. That's why along with jobs, pensions will remain the
hot political issue of the next decade.
»
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In the Fourth Turning or Kondratieff Winter (take your pick) the Elderly are abandoned. First, out of necessity and secondly out of revenge for causing the hardships. But, don't expect the 'Gray Panthers' to go quietly.
The overarching problem is that there is not enough productive work to do in this world at which one can make a decent living, to put away a portion into a Social Security scheme.
That problem, not enough work, is going to cause more than a few pension problems.
A whole new paradigm is required going forward, one in which work as we have come to know it, is shitcanned. Another method of getting to the people that which they need to survive is going to be a real challenge.
Suggest y'all read up on your Vonnegut.
Even 20-somethings and people in their young 30s have barely been able to enter the Canadian job market. Hiring really dried up for young people outside the public sector after the tech bubble.
So basically, its going to be warfare, the 20-something and young 30s, against the 50-70-year olds that want to re-enter the workforce, when/if the economy ever gets going again in Canada.
i agree its going to public VS. private workers and THEN 20-30 VS. 50-70 ....i am self employed in my 40s so i have NO IDEA where i fit in, other than just preparing for whole damn system to collapse so we can RESET and start over (and i am hoping it happens ASAP but thinking its going to hold on until as long as possible, thus causing the most pain)
Jesus will save me!
Palin/Quayle 2012!
I'm sure Botox will save me. Nancy/Billary 2012.
So let me get this straight, we make money and get taxed, then put money away to be taxed then when the people taxing us screw up, they tax us more and when other people who tax us (banks) screw up they tax us more so then in the end we can pay more tax to maybe see our money when we retire and when we take it out we get taxed up until we buy something, then we get taxed. Looking forward to my $750 pension for sure
Simple Math
Financial Crimes plus Bonuses =
Austerity for the middle class.
Public pensions paid for by the private sector middle class is a crime.
I don't get a pension. So I could give a damn about some old fart crying because he won't get one. Boo hoo. Tough for you. Now go take that job as a Walmart greeter and learn to smile.
Started collecting this year, $18,000 so far put into gold and silver and food. Hope it lasts.
Unless raising the pensionable age is coupled with a disincentive to lay off disproportionate numbers of employees age 50+ in order to save on health care costs (and probably out of general meanness, I suspect), this will be an unmitigated disaster. We are creating a kind of [un]employment purgatory in the years leading up to "retirement".
Retirement "benefits" were never meant to be paid out. They were meant to be stolen.
How come they are paying them out then, to the point of exhaustion.
It's a rhetorical question.
At least the guy will get a check .... If he lives long enough
Riots? Yes, please.
Bail out banks then discover "austerity" for people who have put into the system for 40-50 years?
Riots and hangings are in order.
Maybe you have similar stats for Canada's politicans that compare to the graph from Jesse's American Cafe, Leo?
20 November 2010Congress' Median Household Net Worth: One Picture Is Worth 1000 Words
Congressional Members' Personal Wealth Expands While National Economy Sours
The situation is similar in America. The absolute morons in government who design, sustain and then tweak these systems are focused on spreadsheets, not real life. My retirement age is raised to over 67. Who is going to let me work that long? My friends who get laid off in their 50's and 60's are lucky to get employed at half their old wages if at all.
United States Social Security is a typical blooming idiot ponzi scheme that assumed ever larger and more prosperous generations contributing to a retired class that did not live longer and demand more. It can never work in the real world. That's why the tax rate in the U.S. went up from 1.5% in the beginning to 15.2% now...and it's still projected broke. Bernie Madoff is in prison for the same scheme.
Assuming we should even have a government national retirement scheme, it should have been a contributory plan like a 401k. It could never ever go broke, become insolvent or create a national disaster. People would invest in wide ranges of things and the government could not forcefully borrow it to disquise their true balance sheets except through individuals investing in government bonds. Done through private companies the deal could not be changed either as it would have the force of contract...something government programs are not subject to.
Having said that, it seems to me that in Canada and the U.S. a much better and simpler solution is to stop indexing payments to inflation. Simply keep the payout charts flat until the sytem balances. Given that there is inflation over time this becomes a de facto discount payout similar to taking benefits at 62. Thereby a person can still get payouts at 65 which is what everyone for 70 years has planned but because of inflation it will not be worth as much. This would be easier to deal with and would actually have it's own anti-inflationary effect on the economy. Most people have paid for assets that are not subject to inflation. Even if they have a house note, as most here in the U.S. do, it is at a fixed interest rate not subject to inflation.
However, this idea makes sense, so you can rest assured it will not be done. Even so, I am sending it to my representatives where it will be dutifully ignored.
Broken down pension systems due to people living longer ??
This is what gubermints deserve for discouraging smoking, heavy drinking and all forms of miscellaneous gluttony. And don't even mention the stupid seat belt crazyness and all those .gov-approved pharmaceuticals and robotics that keep humans breathing too long even when terminally bedridden.
Pensions systems were designed for the pre-Mommy State era. Now it no longer works due to the wonders of engineering, social and medical.
Pension? Social Security? Only a total fool would expect to see any of it no matter what country you reside within.
That's a pretty broad statement there, Sparky. I just got my first check this month. So, I guess your assessment is off the mark. No guarantees for next month, however!
Unless that check is denominated in Sing dollars, his assessment is pretty much dead nuts on.
I guess it's going to take the rest of your generation $8/gal gas and milk, $5/lb bread and dozen eggs before you wake the F up...
Hey. He said nobody would see any of it... period. I was just refuting the statement.
If you want to go off on a tangent about inflation and other currencies, go ahead, but it's not relevant to the discussion at hand.
I'm awake.
Any more brilliant statements?
http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html "refudiate"
Keep following that carrot, it's right in front of you, oh so close. Follow it and only look straight ahead. Don't make us use the stick little donkey.
Sorry jumpng the queue.
Ty have you seen this yet!?
Millions cashless in bank glitch
ONE of Australia's biggest banks is scrambling to process payments to millions of customers, who potentially face days of uncertainty about when they will be able to access their money.
http://www.smh.com.au/business/millions-cashless-in-bank-glitch-20101126-18akf.html
"not only had his pay not gone in, but a whole month's worth of transactions appeared to have been wiped from his online account."
I'd rather face Freddy Krueger. I knew this online banking business would turn into the end of civilization.
Check w/ Doug Kass.
ROTFLMAO!! So true. Sad, but true.