Denial

DENIAL modified

This week the feds tried to solve the biggest problem we have. No, ain’t gasbag houses, HAM, breeding hipsters or $1.50 gas. It’s the fact most people save nothing and are headed for a future with too much kibble in it. Ottawa just unveiled something it calls the ‘target benefit plan’, because it’s too broke to save the CPP.

Whether you believe it or not, we have a mother of a retirement crisis on the way. The amount of liquid assets people have is on the decline, along with the savings rate. Eighty per cent of TFSAs are in cash, and 94% of the money we could put into RRSPs goes into Bosch, Meile, Wolf & Thermador. (No, that’s not a new mutual fund company.) Seven in ten people have no corporate pension, and a growing number who do have plans, have the kind with no guarantees.

In fact, most people are stunningly ignorant about their own futures.

Eight weeks ago a major survey found most wrinklies aged 55 to 64 think they’ll be cool in retirement, but have no idea what their income will be. Huh? And dig this: 70% of people about to retire have are clueless as to what the public pension plan pays – but 80% say they’ll need the money to live on and a third say it’ll be all they have.

For the record, the average CPP monthly payment is $633.46. The maximum amount (relatively few receive it) is $1,038.33. You can collect at age 60 (and should, even though the benefit is reduced), while OAS is available at age 65 (but is clawed back starting when your income hits $71,500). OAS pays a max of $551 a month.

So the average person can count on $7,596 a year from the feds, which rises to $14,208 at age 65. By the way, this is $10,000 below the poverty line in most of Canada.

Now, here’s where the retirement crisis comes in: 89% of Canadians recently said (a BeeMo survey) they will need to rely on the CPP to make ends meet. A third of them said this reliance will be ‘heavy.’ Even so, almost 60% figure they’ll have to find work to support themselves after they stop working (…er…) and 49% realize they’ll have to cash out of real estate. Another 34% are planning on winning a lottery and 28% delusionally believe their kids will support them.

Well, certain things should be clear to you. For starters, there are nine million Baby Boomers who are massively house-rich and financial-asset-poor. More people will retire in the next ten years than ever retired before in such a short period of time.

Second, the feds have already started paring back retirement benefits (the OAS age is moving to 67) so younger people are going to get screwed with even fewer benefits. Third, blindly dumping all your net worth in a house and hoping that will save you is a real bad idea, given the great Boomer real estate dump that lies ahead. Fourth, there’s no alternative to higher taxes in the decades ahead to keep the retirement and health care systems afloat, which means RRSPs are also dubious. After all, why make your retirement savings taxable, if taxes are to swell?

Finally, understand that governments are simply going to fail at any of this pension-reform stuff. The CPP will never pay out enough to support you, because no politician will have the courage to make premiums double or triple for employees and their employers. The latest attempt to reforming the system – unveiled in a speech on Thursday – is more pathetic than this blog. The ‘target benefit plan’ would try to bridge the gap between the rich guaranteed pensions public sector workers get and the non-guaranteed defined contribution plans most corporate plans offer (usually shared RRSPs).

But it’s also voluntary, flawed and may only be open to workers in federally-regulated industries (like the banks and railroads). Meanwhile a number of provinces have been lobbying Ottawa for a better CPP (higher premiums now, higher benefits later) or toying with setting up plans of their own (as in Ontario). Of course any new pension scheme will also mean higher taxes, since governments already are out of money.

Nobody wants to hear this, but we are a decade or less from a formidable mess that could alter the face of our society. Lots more old people. Many more poor ones. Housing decline. Higher taxes.

To ignore this, borrowing and spending on real estate when it’s at its zenith, is nuts. And yet most do exactly so. This is why a retirement crisis is guaranteed.

So, it’s up to you if you will be part of it, or join the elite who will escape. If the latter, be here tomorrow.

244 comments ↓

#1 Joe on 04.24.14 at 6:24 pm

Buy a second house and double the profit………..:)

#2 Millenial on 04.24.14 at 6:27 pm

furst!

#3 sciencemonkey on 04.24.14 at 6:37 pm

What’s stopping the profligate boomers from never retiring? I don’t know what’s worse for the millenials, no jobs, or getting a job and funding the boomers’ retirement.

#4 Tripp on 04.24.14 at 6:38 pm

Other are worried too:

http://www.thestar.com/business/2014/04/24/ottawa_unveils_proposal_for_new_pension_plans.html

No matter what the government will provide in the future, I doubt these pension plans will ever cover for a decent retirement.

#5 backstep on 04.24.14 at 6:39 pm

Poloz says risks of housing bubble subsiding and low interest rates 4ever.

http://business.financialpost.com/2014/04/24/bank-of-canadas-stephen-poloz-says-interest-rates-to-remain-low-for-years-to-come/

#6 espressobob on 04.24.14 at 6:41 pm

It;s hard to believe so many folk out their actually think that CPP & OAS will support them down the road?

Sounds like those of us who max our TFSA’s and take advantage of tax friendly dividends & capital gains in a non-registered account should stay ahead of the curve.

Here’s hoping.

#7 Ralph Cramdown on 04.24.14 at 6:41 pm

With global warming, there won’t be any icebergs to encourage the oldsters to hop onto right when we’ll have most need. Ironic, no?

#8 Bill Gable on 04.24.14 at 6:41 pm

The numbers quoted in this post made my blood run cold.

Honestly: 34% of punters think they will win the Lottery, to pay for the Depends?

The Government makes it just about secret, about the OAS and that you have to APPLY for it….whereas the CPP kicks in – at 65 – unless you cleverly get in at 60.

One caveat.

I think feelings about debt might be generational.

I still remember my Grandparents talking about the Thirties, here in Vancouver – and my GrandDad had a job, and the Family barely survived. They never carried debt. They bought their wee bungalow in West Point Grey….and had it until 1978.
That wee bungalow was blown down, three months ago, for a house better suited for one of those new sucker sub divisions, than a thirty foot lot. You can’t help but shake your head.

$1.345 million and you can just about read the newspaper next door.

There are some big storm clouds ahead, and I am not even gonna talk about what Putin “The Conquerer” could try and pull.

Head’s up – or get trampled.

Let’s see what our genial host (*hope you are feeling a lot better and pain is mitigated, Garth) has for us on the ‘morrow.

I know which tribe I am in.

#9 Greg on 04.24.14 at 6:41 pm

The Fraser Institute disagrees with you Garth. http://www.fraserinstitute.org/research-news/display.aspx?id=21108

#10 Son of Ponzi on 04.24.14 at 6:44 pm

SM

Ying Yang

I walk the down to that little house…

100 cars, line up to get in.. Virgins, old bastards, and Asians, lots of Asians…

If fact didn’t see one Asian on the long branch line last year, now plenty..

That can only mean on thing for owners in Long Branch….

$$$$$$

You think people in Hong Kong follow the great Smoking Man?
——————-
SM
if you listen closely, they speak Mandarin not Cantonese.

#11 BullishBCbear on 04.24.14 at 6:44 pm

Great topic! It will be interesting to see how the healthcare system changes, I’m guessing its gona get really bad , in BC our “free” healthcare costs each person I think 70 dollars a month now in MSP premiums and prescription meds ? Ur on your own. How is it in the other provinces?

#12 Lastline on 04.24.14 at 6:47 pm

There’s an easy solution and it’s called… SOYLENT GREEN!

#13 joblo on 04.24.14 at 6:48 pm

Escape it is:
Panama, Belize, Mexico, Spain, France, Costa Rica & on & on & on…Leave Kanada to the 2 Steves.

#14 Happy Renting on 04.24.14 at 6:49 pm

I predict even more Dollarama locations in the decade ahead.

#15 Old Man on 04.24.14 at 6:52 pm

Here is my interpretation of the depressing caption photo. Things did not go well with his lady in marriage and hooped all the assets if any, and his divorce settlement amounted to a leased car going into arrears. He was thrown under the bus for being a greater fool, and is splitting for Mexico to romance an Amazona gal into marriage; they have big money as he needs a new pension for life.

#16 LH on 04.24.14 at 6:55 pm

BEST PENSION
Paid off brick houses in M5T, M5S or M5R
There will always be students to pay rents which grow with CPI.

One student = OAS
Two students = maxed out CPP
Ten students = comfortable retirement

#17 Smoking Man on 04.24.14 at 6:55 pm

Right on the money tonight Gartho……

Fellow smoking men, time to hide your loot, get it away from bleeding hearts….

I don’t know how they plan on getting it, I just know they want it. UCC sends me messages they sit around dreaming of ways to get it.

Rather than cut corporate taxes to nothing, make power reasonably priced to attract investments, and jobs to shrink the Labour pool and up wages a bit…

Nope, that requires thinking… Far easier to make a law to confiscate..

I know this sounds absurbed now, but ask yourself how many of my calls been in that category only to pop out of the ocean, unexpectedly, giant teeth, and
swallowed my critics in one bite…

Be afraid…..

#18 Babblemaster on 04.24.14 at 6:56 pm

Nobody will starve in this country.

#19 CJ on 04.24.14 at 6:59 pm

I save a lot. (north of 30% of my take home)
I’m with the feds. (accruing a DB pension)
I rent. (housing accounts for less than 30% of my take home)

My biggest fear is that, in spite of the above, the system will be so broken by the time I retire in 20+ years that what I’m doing won’t be enough.

I shudder to think how those around me will do, as they AREN’T being as cautious about saving.
Only time will tell…

#20 New_Grad on 04.24.14 at 7:00 pm

Hi Garth,

What if one plan to re-finance their home and purchase multiple investment properties, rent it out to cover the mortgages and maintance, and have positive cashflow after the mortage is paid up. Isnt that a better retirement plan?

#21 LH on 04.24.14 at 7:01 pm

I think it is no coincidence that in Continental Europe and Japan, ‘pension’ also refers to a small boarding or lodging house.

#22 saskatoon on 04.24.14 at 7:02 pm

whether you appreciate immigrants or not…certainly, it can be agreed upon that future (possibly massive) increases in taxation rates will discourage potential newcomers.

this means (in addition to all the retiring “dependent” boomers)…there will be a much smaller overall tax base.

this will effectively compound the problem…”forcing” governments to raise taxes even more…which will discourage even more people from moving to canada.

future increases in net emigration levels as well?

a vicious cycle–similar to the one soon to be created by the deflating housing gasbag.

#23 Victoria Real Estate Update on 04.24.14 at 7:04 pm

The story this year in Victoria has been the continuation of weak single family home sales.

There is no better indicator of an unhealthy real estate market than slow, sluggish sales.

Overall, it’s a buyer’s market in Victoria and has been for some time. There is more than enough inventory and too few buyers. Buyers have an advantage over sellers in price negotiations.

So far this year, SFH sales are well below Greater Victoria‘s 5 year average.

Total (yearly) SFH sales in 2010, 2011, 2012 and 2013 were approximately 30% below Greater Victoria’s 30 year average (population adjusted). This weakness has continued into 2014.

So far this year, SFH sales in the expensive group of areas (Oak Bay, Saanich East and North Saanich) are dismal. The SFH sales total (January through March) is only 210. Let’s compare this number to other years:

2014: (210)

2006: (254)
2007: (280)
2008: (266)
2009: (222)
2010: (259)
2011: (234)
2012: (228)
2013: (188)

Why are SFH sales across Greater Victoria so low? There are a number of reasons:

1. House prices across Greater Victoria have fallen 10-15% from the peak (2010). As a result, there are many (underwater) mortgage holders who have, effectively, been eliminated as potential move-up buyers. They simply cannot sell their properties without either declaring bankruptcy or writing a massive cheque to the bank.

2. More potential buyers are content to sit it out on the sidelines, rent and wait for lower prices. As prices peaked in 2010, many of these potential buyers were told that it was a good time to buy and that prices could only go higher. However, prices have fallen 10-15% since 2010 and many of these potential buyers have learned that it isn’t always a good idea to follow the (buying) advice of those who prefer high house prices.

3. House prices across Greater Victoria are simply too high and there are not enough (qualified) potential first-time buyers (even with historically low 5-year mortgage rates). The pool of potential first-time buyers has dried up.

House prices in the US peaked in 2006 as the pool of potential first-time buyers dried up. The result was a major price correction (bank failures happened after house prices began to fall in the US).

4. There is a standoff between sellers and buyers. Many sellers are unwilling to sell at (falling) market prices and many buyers are simply not interested in bailing out greedy sellers.

Seller/buyer standoffs were common in many US cities as prices peaked (in 2006) and began to fall. Eventually, buyers won as sellers were forced to give in to the demands of buyers. The result was lower prices. The same will happen in Victoria and across Canada.

Speaking of the US, let’s take a look at house prices in Dallas, Texas.

House criteria:
* min. 3 bed, 2 bath
* min. 1800 sq. ft. of above ground primary (main) living space
* 2004 or newer
* attached double garage

In Victoria, a house like this would probably cost $700 K or more.

In Dallas, the combined value of these 6 houses (that fit the above criteria) is about $679 K.

$98 K (3 beds, 2.5 baths, 1,997 sq. ft.)
$100 K (4 beds, 2 baths, 1,816 sq. ft.)
$111 K (3 beds, 2.5 baths, 2,180 sq. ft.)
$115 K (4 beds, 3 baths, 2,069 sq. ft.)
$123 K (4 beds, 2.5 baths, 1,925 sq. ft.)
$132 K (4 beds, 2 baths, 1,944 sq. ft.)

Household incomes in Canada and the US are similar, therefore, house prices should be approximately the same as well. Clearly house prices in Victoria are extremely overvalued and ripe for a major correction (prices always revert to the mean).

Girls and guys, hold off on your buying plans until house prices in Victoria fall a lot more. House prices in Victoria have already fallen 10-15% from peak, which is quite amazing, considering that 5-year mortgage rates have been historically low for some time and that house prices across the rest of Canada are still rising.

Renting for now is a no-brainer. Do not buy a house right now, that’s an order. LOL

Until next time – Cheers!

#24 Maxamillion on 04.24.14 at 7:06 pm

The good times are OVER.

#25 4 AM Sunrise on 04.24.14 at 7:07 pm

“…and 28% delusionally believe their kids will support them”

Not so delusional in Asian cultures. Based on the anonymous horror stories I’ve read on the Internet (and they can’t ALL be fictional!), it’s the source of pain, guilt, dysfunction, emotional abuse…you name it. Some of them feel entitled to recoup the “investment” they made raising their children.

#26 Smartalox on 04.24.14 at 7:08 pm

I recently had to fill out tax returns for 2010 through 2013 for my pre-boomer parents, aged 82 and 76.

Their incomes are limited to CPP, OAS, and a tiny work pension. Net incomes?
Mum = $13,049
Dad = $ 14,314

Total = $27,363. That’s it, that’s all they get, per year. Their rent is $22,000 per year, leaving about $300 per month for food. And these are people who worked in Canada, paid into the public pension system for their entire careers.

At one point they had a house worth $780k, but after almost losing it to foreclosure (they borrowed a bundle to fix it up for sale, then couldn’t keep up with the mortgage payments once they stopped working) they sold it, their only asset, and netted less than $80,000 from the sale.

That was 4 years ago, and all that money is gone, now. They never had any savings, just the house, bought when RE was cheap, mostly with money from an inheritance. Our family projected an upper middle class lifestyle, but we were never rich. We were rarely solvent.

Now my folks call me and my siblings, complaining about how broke they are. Occasionally, they call in a panic, begging for a thousand dollars here or there to avert some crisis or another. Since they sold their house in 2010, They’ve accumulated debt in the mid 5 figures (mostly retail credit) and waste their income from CPP and OAS keeping up with the minimum payments. Their children (each with families of our own) pay their rent, to help prevent them from getting evicted. Again.

Thank heaven that they’re still healthy, and able to live on their own. They talk about getting jobs, but dropping off resumes at the mall isn’t working out. We have no idea what we’re going to do to support them when they actually DO need nursing home care.

Take heed, this could be your future.

#27 chopper on 04.24.14 at 7:09 pm

You are so right Garth on how screwed up most people are about their financial health, but will people listen?

I doubt it the mass of humanity will continue to live in the moment and not planning for when they get old and can’t work like they used to.

You have been warning us for many years now to be wise about our finances and some think you are the prophet of doom but time will tell. Just be patient and you will say, “I told you so”.

I have been heading your advice and living frugally and investing wisely, the future is looking bright with no car payments, no CC payments, no debt but a small mortgage and peaceful rest at nights.

How many can say that, all they want is granite, stainless steel appliances and stamped concrete.

#28 HogtownIndebted on 04.24.14 at 7:12 pm

“Another 34% are planning on winning a lottery….”

That line grabbed me, but sadly I have met people like that.

A bit of a sidebar, but perhaps interesting:

Last year I mentioned here my friend who does consulting work with those charity lotteries across the country. These are interesting, because he tells me they have tested the demographics of the ticket purchasers a lot, and typically these are the same people who are recently highly leveraged into real estate.

Anyway, this year things are looking much worse, and he thinks it’s at a tipping point now, and he even plans to branch out quickly to find other work as a backup.

He told me that in Ontario and the Maritimes, these hospital and other draws are being cancelled at a rate of at least one a month (in Ontario, Ottawa/CHEO, Red Cross, Guelph Rotary and several smaller long-running Rotary/Kinsmen lottos have already cancelled their usual spring/summer draws.) The current Canadian Cancer Society draw in Ontario was at only 50% sales with two weeks left and made it barely to 70% apparently, which he thinks is below their break-even. The biggest, Princess Margaret lotto will sell out, but it may be alone and has cut the value of its main prizes considerably. (And Toronto condo developers are giving the organizers the sweetest deals ever to include their air-cubicles in draws this year) Heart and Stroke Ontario is very concerned over weak sales for its last three offerings (barely 80% or lower) after years of sellouts. In Alberta, hospital fundraisers are detecting a topping out of sales with more tickets now left until the last minute, and BC is going clearly downhill with several hospital and other charity draws sweating bullets right now about low sales.

These ticket purchases are all funded on disposable credit (not really income) he tells me, and even if Poloz keeps rates low for years, it’s hard not to think that people’s financial constraints are getting a lot tighter just making monthly payments on everything they have, and frivolous extras like these tickets are dropping out of the basket.

Canary in the coalmine? Maybe. It sure fits with an indebted, house-horny population that is putting less and less into RSPs, and barely anything into TFSAs, expecting CPP to somehow save them. Makes me wonder how the big government lotteries, usually a trap for the poor, are doing by comparison…..

#29 Pounding sand in Peachland on 04.24.14 at 7:12 pm

I retired at 58, didn’t collect CPP until 65, glad I waited. If u can afford to wait, wait

Bad idea. — Garth

#30 Gigi on 04.24.14 at 7:13 pm

#1 Joe you are kidding right?
Ou então e um tonto mesmo! Lol

#31 mishuko on 04.24.14 at 7:18 pm

I was thinking the same as #3, what if the boomers retire and then realize they are broke and need more income only to re-enter the job market?

I think the effects of this will be harsh on the youth and keep the job prospects for everyone more limited than my pathetic vocabulary.

#32 Scalgary on 04.24.14 at 7:23 pm

Garth,

May I request to write a blog about how to choose preferred shares? Lot of varieties out there and TD Waterhouse don’t want say anything until I have 300K in my account!

Thanks in advance!

#33 Mark on 04.24.14 at 7:23 pm

Now that GTA RE prices are in fairly undeniable decline (only covered up by changes to the sales mix!), its no surprise that these issues are cropping up. As only a small portion of the population, relatively speaking, will have ensconced themselves with sufficient, and relatively inexpensive liquid assets such as stocks.

Canadian RE has a calculated P/E ratio of well into the 30s. Its trivial to buy the Canadian stock market at a P/E of less than 15 and better longer-term growth. Not too hard to predict who will be the big winners over the next decade!

#34 Mark on 04.24.14 at 7:25 pm

“What’s stopping the profligate boomers from never retiring? I don’t know what’s worse for the millenials, no jobs, or getting a job and funding the boomers’ retirement.”

The bond and housing market will utterly crash if the boomers don’t get the younger crowd into the market. So its in their interests.

#35 Vangrrl on 04.24.14 at 7:26 pm

I’m so glad I have the option to work in other countries relatively easily (British passport so access to EU and a flexible lifestyle). I am strongly against higher CPP premiums. I invest for my future and do not need a forced savings plan or government to hold my hand. No way in hell am I spending the next 20 some odd years working in Canada and paying higher premiums because
Canadians are pathetic savers. Time for people in this country to get their s*** together!

#36 Mark on 04.24.14 at 7:26 pm

“Total = $27,363. That’s it, that’s all they get, per year. “

Pretty generous, IMHO, considering students and new high school grads “get” literally noting. $27k isn’t an illustrious living, but there are significant numbers of Canadians who live on that without all the subsidies old people get from government, senior discounts, etc.

#37 Nemesis on 04.24.14 at 7:28 pm

#AGuideForTheMarriedMan #TheBreakUp #”AsYourFriendAndYourRealtor™”

http://youtu.be/yiZpb7GPLYs

#38 Drake on 04.24.14 at 7:28 pm

Garth love your pathetic blog. You changed my financial life. I will be here tomorrow and I will enjoy being with the elites in 15 years. Florida trailer and liquid millions in the bank here I come!

#39 Suede on 04.24.14 at 7:28 pm

#226 General Observery (from yesterday)

“Their salaries are in USD”

And what currency are the revenues collected in canadian markets? Thai Baht?

lol

#40 Anonymous from Sask on 04.24.14 at 7:30 pm

Well, I never heard anyone from this province talks about retirement or other means of investing for their retirement. All the talk is about house, house, house, and endless talk about housing and renovation. Most of my peers are extremely cocky about the future of investing into a house.

They make it sounds that buying a house at the peak with an all time low interest will provide them the salvation for the coming retirement crisis.

With the talks about the feds extending the low interest rate environment well into 2016 has pushed some people’s belief that it was great to borrowed money and buy houses, buy houses, and buy houses.

I was tired of talking to people who have no other ideas in life but to buy house. We need to produce something in our manufacturing sector. The energy sector is not enough to provide the economic leverage to support the incoming needs of this aging economy. I worked in Health care and making good incomes in health care, but I don’t believe with the way we spend money here in Canada is sustainable. It is not only retirement crisis that’s is coming, we have a major health care crisis coming in the horizon.

#41 Drake on 04.24.14 at 7:31 pm

Edit: I meant liquid diversified well balanced dividend paying millions saved up. Not just in the orange guys shorts.

#42 Suede on 04.24.14 at 7:34 pm

Retirement Crisis?

My folks want to work until they die. Ugh, hard-working immigrants.

Me: “Sell the house and downsize – spend the money on crazy trips”

Them: “But what back yard will the grandchildren play in?”

Me: “The park down the street”

Them: Confused on why kids would play in a park and not in their back yard

#43 pitfield on 04.24.14 at 7:35 pm

Look you winey people it’s been the same throughout millenniums the young get old. The same old problems. The only way to save your @ss is to get rich. It’s not easy (I’ve trying for a long time) and as everyone knows only 1% do get rich the rest make do with what we have. If we can’t make it well!! Like French Royalty said let “them eat cake”!!!

#44 OffShoreObserver on 04.24.14 at 7:39 pm

The banks are screwing everyone. To wit:

I have a corporate investment account of 7 figures with one of the ones with a discount brokerage function.

I had to jump through some hoops to get a TFSA, personally.

I sold my business in 2010 and in anticipation of the windfall cash–my retirement fund [I have no RRSP for the reasons that Garth puts forth].

I am a so-called “high net worth client” so the over-ripe dollied up cougar met me at my new branch, where I opened a personal account and a corporate one.

The dolly comes in and lectures me about all the bank’s brains in Toronto–I live in Vancouver, and now SouthEast Asia.

How much are you going to charge on my portfolio?

“1.25%,” she replied.

“What about ETFs?” I asked. [I have an MBA in Finance and can count.]

She shut up and left and I never heard from her again.

Now, my Mother’s experience with another Canadian, Big Bank:

They have peeled my parent’s–my Dad is long gone–portfolio at that same gross annual fee of 1.25%, which I, roughly, calculate to be over $100,000 in fees.

This has been for ZERO service or advise/counselling/guidance.

They never advise or counsel her but they kept stealing the 1.25% during 2007/08.

Last year, they asked her to leave: take her account elsewhere.

They also do not recognize my Power of Attorney because, they say, I am travelling in Southeast Asia.

Worse, they withdrew more money from my Mom’s RRIF than planned. The result of this was she had to pay an extra almost $30,000 in personal income tax.

Also, because of that, the withholdings in 2014 were bumped up.

So what kind of so-called “financial planners” are they?

– No instruction to establish a TFSA for her;

– If she needed more cash, why not give her a line of credit for the bulge instead of exposing her to a highest marginal tax rate.

– Even though, I was travelling, why not email me about the situation.

– They never tell her anything. For instance: what the investment plan or strategy is.

So, some C.A., a “team” of RIAs–whatever that means.

And they have failed completely over the years and now they tell her to move her account!

I am marshalling my resources and honing a strategy to attack.

If you have a mother or granny who is 90ish, stay tuned.

#45 crowdedelevatorfartz on 04.24.14 at 7:46 pm

@#12 Lastline

Soylent Green are PEOPLE !

#46 Nemesis on 04.24.14 at 7:47 pm

@HogTownIndebted/#28

“Makes me wonder how the big government lotteries, usually a trap for the poor, are doing by comparison…”

http://www.vancouversun.com/touch/story.html?id=9700265

#47 Detalumis on 04.24.14 at 7:48 pm

#12 Smartalox the scary thing ain’t that your parents have 27K in income after a lifetime of working it’s the fact that if they hadn’t worked a day in their life they would receive almost the exact same amount from OAS & GIS. They also would be in subsidized seniors housing by now paying a fraction of the rent.

Probably half of the working population ends up this way with a retirement income that’s equal to what you would receive if you were on social assistance your entire life.

#48 TorontoTransplant on 04.24.14 at 7:52 pm

Watching Hot Properties, can’t believe how delusional these Realtors are.
I am already worried about my retirement future. I am renting, have $100K in RRSP and if I stay with my employer have a Defined Benefit Pension Plan ( these are almost extinct these days). I am 48, most of my peers have zero in Retirement savings and poor if any pension plans. Scary future for us Gen X people.

#49 sheane wallace on 04.24.14 at 7:52 pm

#17 Smoking Man
………………………………..
It most likely would be through inflation and lies.
If registered funds are touched there would be revolution and ‘they’ can’t risk it.

#50 mitzerboy on 04.24.14 at 7:54 pm

I am with the latter group I hope to be escaping

#51 jess on 04.24.14 at 7:55 pm

wage fixing
By Mark Ames
On March 22, 2014

http://pando.com/2014/03/22/revealed-apple-and-googles-wage-fixing-cartel-involved-dozens-more-companies-over-one-million-employees/

http://www.nytimes.com/2014/04/25/technology/settlement-silicon-valley-antitrust-case.html?rref=business&module=Ribbon&version=context&region=Header&action=click&contentCollection=Business%20Day&pgtype=Blogs&_r=0

#52 Nsqt on 04.24.14 at 7:57 pm

Garth could you please show us your calculations for taking cpp at 60. I am assuming it includes taking the cpp pension and investing it in a well balance tfsa.

#53 Viv on 04.24.14 at 7:58 pm

Fairly new to the blog. Great reading. Question: why take CPP at age 60?

Because it’s a trick. Why would you give up 60 monthly payments you can invest for tax-free returns? — Garth

#54 Vancity on 04.24.14 at 8:03 pm

Are fixed interest rates going up or something? How come all the rates posted by banks are above 3%? I thought people can secure 5 year fixed for ~2.8%?

#55 sheane wallace on 04.24.14 at 8:03 pm

To the old farts who think that they will keep living in million dollar homes while somebody else (supposedly living in basement) would be highly taxed to pay for their retirement benefits and health care and would be washing their behinds:
IT AIN’T GONNA HAPPEN!

#56 Debt Collector on 04.24.14 at 8:08 pm

At the payday loan place I work at part-time there are a huge number of elderly folks with minimum wage jobs (which they needed to get to supplement their OAS/CPP cheques) who cannot save anything. A tiny blip like a new pair of glasses mean they have to borrow from us. Pretty sad after a lifetime of earning.

#57 sheane wallace on 04.24.14 at 8:15 pm

#35 Vangrrl
………………….
You of course are aware that 10 years work in UK guarantee minimum 400 pounds monthly pension.

You are 4 hours by train from Paris and 3 hours by car from Amsterdam (through the tunnel) where you can go for weekend coffee.

What are you doing in Vancouver?
Just asking.

#58 Poor Old Man on 04.24.14 at 8:16 pm

No mention of GIS (Guaranteed Income Supplement) In the post today Garth. Why?

My wife and I receive over $1400 per month tax free.

I don’t think there is a retirement crisis

GIS is for low-income people. Who aspires to that? — Garth

#59 Nemesis on 04.24.14 at 8:18 pm

#ComicRelief #CautionaryTales

http://youtu.be/DqZvHBRDM0g

#60 Musty Basement Dweller on 04.24.14 at 8:19 pm

Well put Garth! Thanks for your ongoing perspectives and also new information. Couldn’t agree more!

#61 OffShoreObserver on 04.24.14 at 8:19 pm

#40 – OffShoreObserver ADDENDUM:

Further to my TFSA account:

I transferred about $16,000 there from other accounts, but the Bank automatically puts into a “Hight Interest Savings Account”.

When I try to buy stocks, including ETFs, through the TFSA they say I have no money.

When I go to my corporate accounts, I cannot transfer to my personal ones.

Yesterday I executed some paper “Indemnity,” which I could not do from Offshore–either attach a scan to email nor fax.

We’ll let you know if that liberates me.

Also, Monday, the same Bank, to which I am transferring Mom’s RIF and non-registered investment accounts, which is my new bank, will give me the documents to sign recognizing my Power of Attorney, which should give me the authority to unilaterally force Mom’s incumbent bank to transfer the RIF accounts.

The incumbent bank kicks out my mother and doesn’t allow me access to her accounts, but I use Skype and a conference call with myself in Southeast Asia, Mom in Vancouver and the “hotline” somewhere in Easter Canada and get access.

Now I see everything, including the months charges–and a curious one for $134, “transfer fee”.

Well, these people are going to pay, and I think my Mom’s case will qualify as a Class Action!

#62 Whinepegger on 04.24.14 at 8:27 pm

Given that most people have done all the wrong things in the past to prepare for the future, I see no reason why that kind of mentality won’t continue. I, therefore, see many boomers looking at the RE market and decide to stay in their homes and go for the reverse mortgage. We all know its not too bright and for that very reason you can expect it to be the route most taken.
And guess what that will do to RE prices. Lower supply of housing for sale and artificially keep prices higher than they should be. If the boomers aren’t screwed, their kids sure will be.

#63 Just Say-In on 04.24.14 at 8:33 pm

Aggregator

If you haven’t seen this yet, you should enjoy it.

FOUR HORSEMEN is free from mainstream media propaganda — the film doesn’t bash bankers, criticise politicians or get involved in conspiracy theories. It ignites the debate about how to usher a new economic paradigm into the world which would dramatically improve the quality of life for billions

http://www.youtube.com/watch?v=5fbvquHSPJU#t=18

#64 Italians love real estate on 04.24.14 at 8:38 pm

Joe at # 1.

Parla Italiano ?

#65 David Lee on 04.24.14 at 8:42 pm

Here’s a theory I’d like to test here:

– In general, I think boomers will do whatever it takes to stay in their homes, even if they have to live in squalor, eat bugs and cat food and die cold and alone,

– There are people willing to lend these boomers money if they own their home (turn the TV on before you go to work and you’ll see an advert asking “do you need $30,000?, $60,000?, $600,000?”)

– Once a boomer household (say couple averages 65 years old) gets $300,000 (for example), they can give some to their hipster kids to become debt slaves via real estate, keep the rest and use it to live out their retirement,

– When they are gone (say on average 75 years of age), the company that gave them the $300,000 gets first dibs on the house; the company sells the $1.5M dollar boomer home for $850,000 10 years later and makes $550,000.

– Quick math tells me that the above scenario is about 11% annual return (not accounting for inflation) for the company.

So the rich get richer (BTW, if this is a way to short the boomers, I’ll invest), boomers get what they want and debt slavery continues.

Plausible?

#66 Darryl on 04.24.14 at 8:43 pm

#36 Mark on 04.24.14 at 7:26 pm
“Total = $27,363. That’s it, that’s all they get, per year. “

Mark

You think that a student should get equal or more money than the retired ? The money they receive is proportional to what they contributed through life . What did the student contribute so far? They paid for their own benefits and for the students benefits along the way. In case you can’t comprehend , that’s 13.5 k each . Not 27k each .

It doesn’t work that way. First you get educated and then you make money. That’s how people learn how important money is . Handouts equal entitled people. Not productive people.

Did your parents help you out with your education?
Did they feed you? Cloth you? Pay for your X box?
Then why should they forfeit the money they contributed so that students can live larger than they do.
IMHO

#67 TurnerNation on 04.24.14 at 8:46 pm

I remember the time not so long ago when 1-1.4m would buy a nice “junior” Forest Hill mansion.
In the real Forest Hill: E of Bathurst, S of Eglinton, N of St. Clair.

#68 FormerSaskie on 04.24.14 at 8:52 pm

Will be here tomorrow hope it’s an early post time!

#69 HogtownIndebted on 04.24.14 at 8:52 pm

#46 Nemesis

Very interesting to see lotto corps. laying off – certainly could suggest a few things about levels of disposable income and the health of the economy.

We may have ourselves some kind of economic indicator in all this, a new sort of Franken-number.

I bet (pun intended) we’ll see more of this on the downside, including casinos.

(Of course, at least casinos can recover some slot-machine losses by raising ticket prices on their Michael Bolton mini-concerts)

#70 Italians live real estate on 04.24.14 at 8:55 pm

LH at # 16

LH what part of Italy are you from ? Calabria ? Sicily?

#71 Detlef on 04.24.14 at 8:57 pm

quote: “Escape it is:
Panama, Belize, Mexico, Spain, France, Costa Rica & on & on & on…Leave Kanada to the 2 Steves.”

that is no idea.
north americans are welcome down here in the latin world – as long, as they pay in an accepted currency.

but i really don’t see any lasting worth for the two $$s.

when your economies get the coup de gráce by bubbles, pensions and healthcare, all those northamericans, who now live abroad, will try to return.

#72 general observer on 04.24.14 at 8:58 pm

#37 Nemesis on 04.24.14 at 7:28 pm
#AGuideForTheMarriedMan #TheBreakUp #”AsYourFriendAndYourRealtor™”

http://youtu.be/yiZpb7GPLYs

Me – I can’t believe how stupid you are !

#73 Herm on 04.24.14 at 8:58 pm

Ottawa isn’t too broke to save the CPP: it’s the twisted ideology of the Reformers/Conservatives that keeps it from happening. The Canadian pension plan is run by professionals that have the expertise and the financial sophistication that most individual investors lack.

I would agree that we’re headed toward a retirement crisis, but I would also suggest that a strengthened CPP would be the best way to alleviate it.

Too late. — Garth

#74 Italians love real estate on 04.24.14 at 9:00 pm

So long as construction and development of RE continues to be dominated primarily by those of Italian decent, so too will houses and land continue to be coveted without end.

#75 Italians love real estate on 04.24.14 at 9:01 pm

And I meant the above comment for the GTA strictly

#76 Ralph Cramdown on 04.24.14 at 9:03 pm

GIS is for low-income people. Who aspires to that? — Garth

Rich cheapskates who can structure their assets to produce no current income? Say you’ve got it all in Berkshire Hathaway and other growers that pay no dividend. No current income, so you get GIS. Peel off and sell a few shares if it isn’t enough, and only pay capital gains tax on the shares you sell. Sure, the estate will get hit by the taxman, but it does rather gall me that this stuff is income tested rather than means tested. I’d means test it and throw in the value of the primary residence, which is why I won’t be getting elected anytime soon.

#77 Notta Sheeple on 04.24.14 at 9:04 pm

“…..So, it’s up to you if you will be part of it, or join the elite who will escape…..”
=========================

Noble intentions, but it’s kind of tough for a young person to even think about escaping when you have a government that continually encourages offshoring Canadian jobs to cheap foreign labour (Free Trade Agreements), fast-tracking cheap foreign labour into Canada (Temporary Foreign Workers at 15% less than market wages), and continues to prop up a Canadian housing bubble that costs on average 66% more for a Canadian young worker than it does for a U.S. worker.

#78 Freedom First on 04.24.14 at 9:11 pm

Grim future ahead for a huge number of people. Escape is good. I always place Freedom First. Look forward to your post tomorrow Garth. I always enjoy coming here to hear the truth, as it helps keep me centered and deadens the volume of the financially insane majority. Thanks Garth.

#79 Nemesis on 04.24.14 at 9:11 pm

@HogTownIndebted/#69

Michael Bolton!?? TeeHee!

http://youtu.be/ADgS_vMGgzY

#80 Blase on 04.24.14 at 9:16 pm

Winnipegger, how much do you think insurance companies will pay for a depreciating asset? The boomers may want to do a reverse mortgage but they aren’t holding any cards.

#81 economictsunami on 04.24.14 at 9:18 pm

Busy day today.

Illiquid, under invested Baby Boomers.

Is middle class in trouble or not?

Does the TFWP really cause joblessness?

C.D. Howe report says temporary foreign workers program has boosted joblessness:

https://ca.finance.yahoo.com/news/c-d-howe-report-says-temporary-foreign-workers-162143425.html

Can Keystone be approved?

US Refiners prefer our oil but have produced a glut of light oil from Bakken and Eagle Ford.

If producers get their way to export their light crude, it could help us out immensely.

Rising stocks reflect overpriced U.S. crude:

“Beneath the relentless rise in U.S. oil stocks is a disconnect between the type of oil that the United States is producing and the type that U.S. refineries want to process.

U.S. crude, especially the light crude being produced from shales such as Eagle Ford in Texas and Bakken in North Dakota, typically costs more than the heavier crudes still being imported from Canada, Mexico and Saudi Arabia, and produces a less valuable mix of products.”

We can’t even agree on what problems we are currently experiencing; let alone apply solutions…

#82 BullishBCbear on 04.24.14 at 9:26 pm

# 66 Darryl.

Whoa Darryl before you go off on a boomer rage tangent … he’s not saying students should get an allowance from the government, he is trying to say they’re are people in the country living on very little. Don’t worry Noone is saying the boomers didn’t contribute and leave the world better than they found it, I hope you can sense my sarcasm

#83 Ret on 04.24.14 at 9:26 pm

Yeah, the plight of pensioners in the years to come will be a sad story but we had a great party!

We threw thrift, self reliance, and save for a rainy day under the bus. Now we have unlimited credit, out of control government programs, and handouts in one form or another for all.

A hard day’s work has become just another day of hardly working for most people.

Voters have put their own self interests above the needs of the country and politicians have caved in to every special interest group both in and out of the country.

We are no longer the strong, hard working resourceful people that we once were. Just when did we stop being Canadian?

#84 Notta Sheeple on 04.24.14 at 9:33 pm

#9 Greg on 04.24.14 at 6:41 pm
The Fraser Institute disagrees with you Garth.
====================

I’m assuming you said that with subtle sarcasm.

“….The Fraser Institute provides a useful public service. We report objective information about the economic and social effects of current public policies…..” – The Fraser Institute website.

Objective? What a laughable statement. I would trust Garth, hands down, over any ideologically warped ‘press release’ from the Fraser Institute. Period.

In fact, biologically speaking, the Fraser Institute shares a place slightly above E Coli on the food chain, which of course, is slightly above Realtus Deceptus Maximus, commonly known as a REALTURD®.

#85 4 AM Sunrise on 04.24.14 at 9:34 pm

#69 HogtownIndebted on 04.24.14 at 8:52 pm

Lotto Max and 6/49 are working on ways to get Millennials to buy lottery tickets. No money for the lottery after making payments on the rabbit warren in the sky, y’know. They’re even doing surveys to see if there should be 2 Lotto Max draws per week:

http://www.theglobeandmail.com/news/national/provinces-lottery-agencies-team-up-to-get-more-millennials-buying-tickets/article17628550/

#86 gladiator on 04.24.14 at 9:35 pm

This “give us your money now and we’ll pay you a pension later, trust us” sounds a lot like myRA in the US. I don’t want to suspect anything conspiracy-like here, because a big problem is indeed brewing out there, but I would not trust any money to the feds in excess of the amounts I am currently paying in taxes and CPP. Good thing this is voluntary.

#87 Smoking Man on 04.24.14 at 9:35 pm

Been reading some scathing reviews of True Detective by femanazis…. Main complaint, treated woman in a negative light.

So I watch it for the 7 time…

That’s not it at all, the actress that played Martys wife, was a strong female character, a great role model for woman.

This is what’s pissing them off….

Marty and Rust, are real men, flaws, huge but instinctively, and spirt, man.

The Feminazis would love every man in the world to be like those geeks on the big bang theory.

They fear all the work they’ve done getting men to wear pink socks,burning the man purse.

And actually a man losing his programmed guilt for being a man.

I’m a man.. I’m Smoking Man

I figur

#88 Mark on 04.24.14 at 9:38 pm

“You think that a student should get equal or more money than the retired ? “

From the government, sure. The senior had all their life to save up and get themselves into a situation where they didn’t need the money. Their cohort had a good 50 years or more of voting. The young, students, etc., had none of this.

I’m not in favour of welfare, but for seniors to cry that they’re “only” getting $27k for a couple is pretty rich, don’t ya think?

And the argument of “oh but they paid in” doesn’t fly with me, there’s a huge amount of government debt so obviously they didn’t pay in enough.

#89 4 AM Sunrise on 04.24.14 at 9:40 pm

#76 Ralph Cramdown on 04.24.14 at 9:03 pm

I know of one of those rich cheapskates. Well, not really a cheapskate…it so happens that this granny’s daughter married into a local retail dynasty. She’s given away most of her (somewhat modest) assets to her heirs already. I guess the accountants figured everything out for her. Essentially she’s poor-on-paper so she gets the GIS.

#90 Smoking Man on 04.24.14 at 9:41 pm

Shit, that didn’t make sense, I will try again tomorrow, my typing keys are a bit off tonight…

Wasn’t drinking honest… Burp…

#91 Ben on 04.24.14 at 9:42 pm

Every day I come here and search for:

* Montreal
* Quebec

If you do too then sorry that this isn’t a post actually about them :-)

Québécois retire too, non? — Garth

#92 Obvious Truth on 04.24.14 at 9:43 pm

So down on canada today.

It’s the greatest country in the world.

Nobody forces you to take advice from a banker and Garth tells it to you like it is for free. Or a small fee.

Load up the tfsa. No tax. Easy. Who cares what others do.

#93 Kilby on 04.24.14 at 9:43 pm

I would agree that we’re headed toward a retirement crisis, but I would also suggest that a strengthened CPP would be the best way to alleviate it.

Too late. — Garth

Too bad.- Kilby

#94 Whinepegger on 04.24.14 at 9:45 pm

@ #80 Blase

Do you not watch TV? http://mortgagesforseniors.ca/ Get up to 50% of the appraised value of your home. Even a 25% correction would still make a $1 million dollar house worth 750,00 and eligible for $375,00 in reverse mortgage. Who wouldn’t fall for that advertising if they had no pension, no savings and all their equity was sunk into a house they really don’t want to leave, or consider alternative housing too expensive?

I hear a good number of my boomer friends indicating its something they’ll consider when they need retirement cash.

Get smarter friends. — Garth

#95 Moosey on 04.24.14 at 9:46 pm

#18 Babblemaster on 04.24.14 at 6:56 pm
Nobody will starve in this country.

Take a walk to your local Foodbank and ask the seniors and families in line if they have enough to eat. You would be shocked by the number of people who are starving in this country.

#96 Longterm on 04.24.14 at 9:47 pm

#57 sheane wallace on 04.24.14 at 8:15 pm

Not so sure about that. I put in my 11 years in the UK [returned to Canada April 2013] and as far as I can tell, ten years gives you minimal access to the UK govt pension scheme but you need 30 qualifying years to get the maximum, which is about 400 quid a month.

The UK pension system is also currently funded direct out of NI – there is no CPP equivalent fund – and the pension age has been kick further into the future. Not to mention that Dave and the government’s big QE debt coupled with their own boomer retirement problem is probably going to mean that the pension system there will be worse than here in the future. So I wouldn’t [and I don’t] count on getting any future UK pension or Canadian one for that matter.

All your other points are pretty valid though. Italy, don’t forget lovely Italy.

If the EU holds together for another 10-15 years and they still honour my UK passport across southern Europe, then I’ll think about a cheapish Med retirement rather than an expensive Canadian or British one.

#97 BCD on 04.24.14 at 9:49 pm

#19 CJ on 04.24.14 at 6:59 pm

My biggest fear is that, in spite of the above, the system will be so broken by the time I retire in 20+ years that what I’m doing won’t be enough.

I shudder to think how those around me will do, as they AREN’T being as cautious about saving.
Only time will tell…
____________________________________________

I find this kind of “doomer” thinking amusing. Here is another particularly well written doomsday morsel from yesterday:

“There is nothing the Government can do to avoid a crash. It will all come down and there will be no sound, not even a whimper. The crater will be so deep that the sound of wailing will not be able to reach the surface. The shame suffered by bidding war buyers will outlast their mortgages.”
____________________________________________

LMFAO! If things get this bad you will need more then your liquid portfolios, or cash, or silver and gold for that matter. . .you will need a bunch of guns, ammo and number #10 cans of beans (all of which I have stored myself btw).

Really people. . .get a grip. . .stop hoping for human misery and be glad for other peoples fortunes. Hating on the spenders is boring and makes you look like a fool. Get out there and spend beyond your means and get your “mortage on”. . . Cheap credit, bread and circuses for the masses will keep them happy. . .cheap credit can be had anywhere, bread is still inexpensive enough and as for the circuses. . .well. . .there is this blog. lol

#98 chris on 04.24.14 at 10:00 pm

$14,000 a year is not too bad. Pretty easy to live on that.

#99 TheCatFoodLady on 04.24.14 at 10:01 pm

Demographics – we boomers are getting older & as much as, as a cohort we bragged about the societal changes we imposed, we can’t turn back the clock. Many of us don’t have the money to pay for the health care & help at home we’ll need if we want to stay independent. If we can scrounge up the money – it’s not the world’s most popular job. The pay sucks & your clients die eventually. If we have kids, they may be mired in their own debt or live a long ways away.

Expecting to maintain anything close to current lifestyles for many is… idiotic. I’m sure everyone here has run their own numbers – even if those numbers don’t make you feel warm & fuzzy – we know our own realities. Too many people don’t have a clue as Garth pointed out.

The Main Squeeze & I will be two of the people living on peanuts – OAS, GIS & a tiny amount of CPP. It will work out to roughly what we live on now. We’re prepared. We finally found the right location in terms of rental & area. Our needs are easily met & we can handle unexpected expenses without going anywhere near cheque cashing stores. We have a bit left over for wants & trust me, we’ve pared down wants & needs to the bone.

We are perfectly content with our lives – we’ve found peace which is worth more than you can imagine to us. I feel for those who will have this lifestyle forced upon them though. In spite of poverty, we still have choices. Many will not – they may be stuck in a house they can’t unload but can’t afford or maintain.

“Why, we’ll just spruce up the basement & rent it out if money gets tight. A bit of paint, spruce it up – easy peasy!” Right.

Some of the younger ones I know who own a condo figure when they’re ready to ‘move up’, they’ll keep the shoebox & rent it to seniors. Really? Try getting around space that tight with a walker or wheelchair. And where will they put treasured possessions? I don’t see that as a viable plan in many markets, for many reasons.

Rough times now – rougher to come. A few problems & issues just as large looming.

A perfect economic storm coming & not nearly enough lifeboats.

#100 Vangrrl on 04.24.14 at 10:02 pm

#57 Sheane Wallace:
Paris for the weekend…. Sweet.
I’ve been here 13 years and it’s been great. But I can always come back and visit (Apr-Oct!). The only thing keeping me here now is my four-legged sidekick who will be 16 in August.
Oh, and my mum has property in the Mediterranean that sits empty 10 months of the year…! No Van real estate debt slavery for me, thanks.

#101 4 AM Sunrise on 04.24.14 at 10:03 pm

#65 David Lee on 04.24.14 at 8:42 pm

That outfit that’s always asking me if I need $30,000 always came across as somewhat shady to me:

http://www.pissedconsumer.com/company/capital-direct-lending-corp.html

#102 Smartalox on 04.24.14 at 10:07 pm

@ Detalumis:

They’re on the waiting list for subsidized senior’s housing it’s 5 years long. In Toronto. The waiting lists in the York and Peel regions are longer, because there are fewer spaces.

When it comes to retirement, my parents’ generation is the very thin edge of the wedge. The boomers started to arrive 10 to 15 years later. If social services are already too busy to help them, how long do you think the waiting lists will be when the boomers are desperate? Not to mention that my parents, given the longevity of their parents will likely be around for at least another 10 to 15 years.

As for those who say that they would have gotten about the same deal if they’d been on welfare, instead of working, you just don’t get it.

If you’re earning and not saving, you effectively ARE on welfare.

One more thing, my mum played the lotto every week for 40 years, hoping for a big payoff. The most she ever won was $5000. It was gone in less than a month.

#103 BCD on 04.24.14 at 10:07 pm

#38 Drake on 04.24.14 at 7:28 pm
Garth love your pathetic blog. You changed my financial life. I will be here tomorrow and I will enjoy being with the elites in 15 years. Florida trailer and liquid millions in the bank here I come!
________________________________________

Lol. . .attracting quite the crowd Garth! Florida trailer maybe. . .liquid millions. . .in monopoly money. . .lol

#104 renters savings "owners on 04.24.14 at 10:08 pm

Realtor buddy tells me it is common for broke owners in financial trouble turn to renting out their unit while trying to sell it. It is funny that these over leveraged sub prime borrowers need to turn to renters before they lose it all. Something to look out for to exploit.

#105 Linda Mulligan on 04.24.14 at 10:10 pm

#8 – You also have to apply for your CPP. If you think it begins to arrive the month after you turn 65 without applying for it, think again. Ditto for taking it at age 60 – gotta put in the paperwork to get that benefit & BTW – if you snooze & apply ‘late’ – say at age 62 if you intended it to start at age 60 or 67 if you thought you’d get it at 65 – the government will not pay you for all the ‘missed time’. You snooze, you lose.

#13 – Canada has reciprocal tax agreements in place with pretty much every country – if you think you won’t be taxed, think again. Check the details via your Government of Canada website.

#26 – good cautionary tale & we all of us may end up in the same boat the way things are going…..

#31 – If Boomers are in debt to the eyeballs & can’t sell the house, how can they afford to retire?

#36 – could you & your significant other live on less than $28,000 a year? No? Then how do you expect others to do so? Also note the income reported is subject to income tax – the elderly do not get a ‘free ride’. Plus, a lot of those elderly discounts are being cut back or disappearing altogether as the retiree pool grows….

#66 – Right on, Darryl – I agree that those who paid in all their lives should receive what they paid for – which includes the infrastructure & services that the young in question have been given the benefit of.

#73 – Garth is correct. To have effectively mitigate the coming crisis, CPP reform should have occurred (at a minimum) 25 or more years ago. The youngest Canadian baby ‘boomers’ will turn 65 by 2031, a mere 17 years from now. Still, better late than never & IF CPP reform was initiated immediately the post baby boom generations would hopefully reap the benefits.

#106 KommyKim on 04.24.14 at 10:17 pm

RE: #29 Pounding sand in Peachland on 04.24.14 at 7:12 pm
I retired at 58, didn’t collect CPP until 65, glad I waited. If u can afford to wait, wait
Bad idea. — Garth

I agree with Garth. Take your pension as soon as you can. Read about the “break even point” for CPP here:
http://retirehappy.ca/four-reasons-why-you-should-still-take-cpp-early-post-2011-rules/

#107 Piccaso on 04.24.14 at 10:17 pm

Well I better hook up with some wrinkly so I have 28K coming in a year instead of 14K

Probably get a discount buying 2 boxes of depends at a time as well.

#108 BCD on 04.24.14 at 10:19 pm

DELETED

#109 Doug in London on 04.24.14 at 10:20 pm

Some years ago I read a book and followed a blog by Harry S Dent. It turned out a lot of his predictions were wrong, and to make matters worse he kept coming up with excuses to justify his wrong predictions. I stopped following his ideas and predictions, but to give credit where it’s due he did get at least 2 things right. The first was he predicted the death of pensions, as some pension plans are struggling to stay afloat and continue to pay out entitlements so that one is quite right. The second is he predicted a coming crisis as Garth predicted here, which will be made even worse by a drop in Boomer spending. Interesting times ahead indeed.

My question is, didn’t anyone in government see this coming? Why wasn’t more money put into the Canada Pension Plan 30 years ago? We can’t blame government for everything however, much as that seems to be a favourite Canadian pastime. Boomers should have spent the last 20 to 30 years paying down debt and building up more savings.

#110 blase on 04.24.14 at 10:21 pm

Whinepegger,

Couple things about your thesis. First, Ask your boomer friends how they would feel about getting 50% less than the market price of their home. Then ask them if they would sell for even 20% less. Then ask them if they even have 20 equity in “their” homes. I’d wager a Sam Adams that most boomers without pensions are also up to their eyeballs in HELOCs, credit card debt, and car loans on expensive rides. They enjoyed the 00s, and now it’s time to pay the piper. An old, out-of-style house that’s 50% overpriced will not be their salvation.

#111 Spectacle on 04.24.14 at 10:34 pm

Thanks much Garth.

Re: #18 Babblemaster on 04.24.14 at 6:56 pm
Nobody will starve in this country.

WHAT?

With the dollar-store diets our struggling Canadian poor are now eating! Walmart fat/starch ( soilent green, so to speak) . So many people, both Children & our Senior members of society go hungry ( malnourished, same thing…) each day in our country.

Guess how related the “Temporary Foreign worker” issue is in Canada? Both our youngest first job workers and the retired part time workers, won’t be able to get jobs at Mcdonalds, Tim Horkons, Home Dumpster….nope. Big thanks to The UN Agenda-21 ” New Rules” .

It is sooooo over.

Thanks Garth, very much look forward to Friday post.

#112 Retired WI Curmudgeon on 04.24.14 at 10:37 pm

Garth-
Didn’t we play this song a while back? Seems like a re-run.

Retirement is where you go if you didn’t die early enough

Sure, you get the promised government benefits (maybe?)

A small; % have a defined benefit plan

A larger % have the option of a defined contribution plan

EVERYONE has the RRSP & TFSA schemes available to use

The trouble with defined contribution plans, RRSP, and TFSA ideas are, you HAVE to put into them or they won’t work!

Choices here: Be prudent, or Be stupid Either you are going to take some responsibility for your own future, our you will learn to live on the government dole.

The US & Canada are very similar in their operations, and generally their outcomes. The Good News you won’t life forever

#113 dienekes on 04.24.14 at 10:43 pm

I think the boomers are playing the same game as the banks. We are to big to fail. “What? The government will let us rot in the streets? No, they will have to kick in the cash.”

#114 Mr Happy on 04.24.14 at 10:43 pm

“…There are some big storm clouds ahead, and I am not even gonna talk about what Putin “The Conquerer” could try and pull….”

Well for years, christians have said that Russia will invade (and be destroyed while trying) Israel. Doesn’t sound so far fetched these days. Time to start getting concerned?

#115 Millennial-falcon on 04.24.14 at 10:46 pm

#85- I think millennials are just smart enough to know blowing 20bux a week on a fools tax is stupid, not that they don’t have the cash, now go buy a pack of smokes and play some keno with all your extra boomer cash you have a retirement to fund!

#105- I find the pride you take in all the “infastructure” you paid for pretty ironic considering your “generation” is crying about hospital wait times and low cpp benefits good thing you have a fresh new crop of young go getters replacing you in your well paying middle class job that you got straight out of highchool with no education. Oh wait you refuse to retire cause your broke!

#116 Old Man on 04.24.14 at 10:53 pm

#114 Mr Happy – there is nothing to worry about as Caesar is a Bolshevik now.

#117 Smoking Man on 04.24.14 at 10:59 pm

DELETED

#118 Human Capital on 04.24.14 at 11:09 pm

The greasy, neck-bearded renters who comment forth from within their respective sticky-walled depressions in the earth are confused about the true meaning of Garth’s prophecies.

There is not going to be a terrible reckoning wherein you are revealed to have been right all along. You will not get to stand over the fallen, proclaiming: “You Should Have Prepared”. Your reward will be merely to maintain your dignity and independence while the indebted struggle privately without it. You will not see their fear and frustration because they will not share it with you.

This left behind fetishism is unbecoming. Your so carefully preserved freedom and independence would be well deployed in the pursuit of poetry and philosophy, and yet you spend it here: getting off on financial snuff like a malevolent, slavering fiend.

You are suffocating under your liquidity, diversity, and balance just as surely as they under their debt because you lack the imagination to make of those resources a meaningful life.

#119 Gainsaywhodare on 04.24.14 at 11:18 pm

“28% delusionally believe their kids will support them”

It is delusional to think that the already over-extended kids will have the means to support them.

Imma be here tomorrow.

#120 tkid on 04.24.14 at 11:24 pm

#52 – there is a post from Garth re: taking cpp early on this site.

#65 – I have no doubt many boomers will take out reverse mortgages, spend that money quickly, try to sell the house, find that the reverse mortgage’s unpaid interest has ate away the remaining equity in the house, and will start bleating about mortgage companies scamming seniors.

I am against enhanced cpp, the Ontario pension boondoggle scheme, and all the other you-fund-my-retirement plans. I only have so much extra money each month that I can save for my retirement. Most retirement plans will be bankrupt by the time I retire, so I need to be able to put that money aside for myself if I am to not be on the cat food diet.

And I have no doubt the Ontario government will try to raid my savings. This is why I intend to get my savings out of the province if not the country. I do not want to evade paying taxes, but I do want to preserve the principle.

#121 Chris on 04.24.14 at 11:31 pm

If your parents only get $27000 a year. The big question is why they are spending $22000 on rent? They should at least reduce that by 40%.

The real question is that why public sector employers which are funded by the tax payers paying more for employee pensions than private employers do. The power companies OPG and Hydro One, etc, are matching employee contributions 5:1. Why are they acting like if the tax payers are not broke enough, we have to pay lofty sum in higher electricity rates and taxes to fund their loft pensions.

#122 Millennial Falcon on 04.24.14 at 11:31 pm

#105 Linda mulligan

Haha I find the pride you take in the “infrastructure and benefits” you think your generation paid for pretty ironic considering it hasn’t been paid for at all. In fact it’s in serious danger and underfunded. Boomers are delusional no generation will ever have it as good as they did yet they love to hate on “young entitlement ” WAKE UP and look in the mirror

#123 AisA on 04.24.14 at 11:31 pm

@97

Won’t need a thing to keep on keeping on. Everything will be fine and continue as normal, except for the those drowning in house poverty, they will just play at being fine. Their shame will keep them quiet and in their place of debt servitude, probably for what is the remainder of their productive lives.

I do not hope for human misery, I couldn’t care less if a 150k crap box goes for 900k in the GTA or for 75k, it’s still a crap box by any other price. Does a spoiled steak become a deal if I lower the price enough?

#124 NoOneOfConsequence on 04.24.14 at 11:46 pm

Interesting blog tonight. Today – here in Vancouver there was quite a radio pump on how all these “concerns” you have are all “over-blown”.

You voice is up against some heavy-weights here Garth….

Fraser Institute
http://www.fraserinstitute.org/research-news/news/display.aspx?id=21109
—–

Of course that is picked up by the ‘news’ radio who played a segment on this every 20 minutes all day long….

News 1130
http://www.news1130.com/2014/04/24/warnings-about-a-looming-pension-crisis-are-overblown-report-claims/

#125 John in Mtl on 04.24.14 at 11:53 pm

@ #88 Mark on 04.24.14 at 9:38 pm
” And the argument of “oh but they paid in” doesn’t fly with me, there’s a huge amount of government debt so obviously they didn’t pay in enough.”

Not necessarily so: Governments WASTE so much of the public’s money, you have no idea! I do.

#126 NS in Calgary on 04.24.14 at 11:56 pm

#25 4 AM Sunrise on 04.24.14 at 7:07 pm

I would happily look after my parents. That is what I saw as normal growing up in the 70’s in Calgary.

#127 Cory on 04.25.14 at 12:03 am

Likely another recesssion coming. All prices getting too high.

Food
Utilities/energy
Gasoline
Taxes

Who says there is no inflation!! Add in ridiculous housing costs and no wage growth none of it makes any sense. We have zero debt, make much more money than the flashy wannbe wealthy easy money seeking illiterates who sell houses and we have alot of savings, already made 18% on our portfolio this years, yet these increasing costs affect our pocket book.

Weird world.
Hard to figure out.

#128 Steve on 04.25.14 at 12:25 am

#63

Yes the Four Horsemen are totally impartial. Clippity Clop….

#129 Potemkin on 04.25.14 at 12:27 am

Retirement is a recent invention destined to die, pardon the pun. Retirement is actually damaging your Self. There is no Retirement in nature. The artificial construct the modern society is is less than a hundred years old. That’s three generations. That was all. In the jungle masked by the artificiality there is no such thing as retirement. You die standing. Think klingon. Honor is a lost term. It will come back as a tsunami, with the real society, not the make believe we are in.

#130 Son of Ponzi on 04.25.14 at 12:48 am

#7
With global warming, there won’t be any icebergs to encourage the oldsters to hop onto right when we’ll have most need. Ironic, no?
—————-
Maybe they could take a cue from Chief Dan George in Little Big Man and pick a Good Day to Die.

#131 Andrew Woburn on 04.25.14 at 12:55 am

#99 TheCatFoodLady on 04.24.14 at 10:01 pm

Some of the younger ones I know who own a condo figure when they’re ready to ‘move up’, they’ll keep the shoebox & rent it to seniors. Really? Try getting around space that tight with a walker or wheelchair. And where will they put treasured possessions? I don’t see that as a viable plan in many markets, for many reasons.
===================================

I agree that there probably won’t be that many retirees wanting to rent condo’s in the city. They won’t be particularly cheap since they will likely continue to be in demand from the next generation of kids. Trying to mix retirees and 20-something party animals in the same building is a recipe for war.

Also while cities look exciting and full of promise to young people, they can seem distressing, noisy and threatening to the vulnerable elderly. If you have moved from your own home in a quiet neighbourhood, you will not be thrilled to find panhandlers outside your door. Good public transit is not much of an advantage if you are afraid to take it after dark. Some boomers with upper middle-class tastes and budgets will relish easy access to cultural venues but for most the city offers only inconveniences, restrictions and higher living costs.

#132 Myer Lanski on 04.25.14 at 1:00 am

#74 Italians love real estate on 04.24.14 at 9:00 pm

Hey Amico,
do you think you can refrain from putting all of the
cugini’s in the same cucina.

There’s much more to life than marble floors, floor to ceiling ceramic bathrooms (with a bedit) and a picture of the pope in the hallway.

What about these wise guys in Wooda-bridge. Eh!
Cattivi ragazzi.

http://news.nationalpost.com/2014/04/24/daylight-shooting-in-parking-lot-of-woodbridge-cafe-leaves-one-dead/

Im wondering, does your mamma still have plastic on her sofa and cook in the basement kitchen rather than the one upstairs?

Serioulsy dude, settle down. Its not kosher.

#133 Son of Ponzi on 04.25.14 at 1:15 am

If the parent and grand parent reunification immigration program would be cancelled.
Would this be helpful?

#134 Spectacle ( as in The Society of the Spectacle, by Dubord) on 04.25.14 at 1:51 am

Thanks for the Blog Garth, & opportunity to join in the discussions. My comment here is from last night, but important.

Can someone explain why exploring the clarity that UN Agenda-21 on this blog isn’t of paramount importance to include? This is so very relevant to tax strategy, land prices & Risk management of assets. Basically any Canadians future well being & that of our country. It’s not boundless paranoia, by any means. Did I miss something?

Thanks to, aggregator and #194 Free Beer Tomorrow on 04.24.14 at 2:38 pm
Everything is controlled. And I mean everything. A Threat To Canadian Sovereignty “It’s all the same [global] plan”

You are certainly controlled – by your boundless paranoia. — Garth

**************************

How is the gentleman paranoid when Agenda 21 is right on the UN’s own website?

http://www.un.org/esa/dsd/dsd_sd21st/21_pdf/SD21_Study1_Agenda21.pdf

This multi-nation effort is about sustainable development and the preservation of the planet. I’m in. — Garth

#135 juno on 04.25.14 at 1:52 am

#26 Smartalox on 04.24.14 at 7:08 pm

=========================
Back in the late 90’s I was in a series meeting with a bunch of Banksters.

What were they talking about? Well it was how to focus on the baby boomers and get their money. The boomers were the largest demographics with cash in their savings at that time.

Shortly later they introduced reverse mortgages, where the banks will allow you to get money from your house in return for debt, leaving the debt to the kids which will eventually inherit the house.

Then now they have low interest and CMHC, or Fanny and Freddie in the usa. Although the USA crapped out and had the biggest transfer of wealth in their history. Why is the Banks repeating this scenerio in Greece, Canada and now Britain. Its simple they want it all and they are going to get it because they are the makers of the rules.

They say why pay your landlord when you can own and pay the mortgage payments to the Banks.

Ask yourself this. Do you really own with zero % down and 100% mortgage. Are the banks no different than your landlords

#136 juno on 04.25.14 at 2:17 am

#113 dienekes on 04.24.14 at 10:43 pm

I think the boomers are playing the same game as the banks. We are to big to fail. “What? The government will let us rot in the streets? No, they will have to kick in the cash.”
=================
You got to be kidding?

Yeah I’m sure the banksters will kick in the cash. Boomers has the votes now. But in 10 years most will be dead. They will become the minority with alot of the younger generation pissed off at them and blaming them for the suffering they caused the younger generation/s

#137 April in Paris (Ontario) on 04.25.14 at 2:34 am

Garth said: The amount of liquid assets people have is on the decline.

=================================
How about a source for this statement Garth? Because a StatsCan report here seems to contradict that. http://www.statcan.gc.ca/daily-quotidien/140225/t140225b002-eng.htm

If you add up Canadians “liquid assets” (deposits in banks, stocks, bonds, TFSA), in 2005 there was $664 billion, and in 2012 there was $1,047 billion. That’s a 57% increase. And it’s even better news, because its constant 2012 dollars, so its a real increase, not inflation.

So please explain (or at least source) your “The amount of liquid assets people have is on the decline” statement, because StatsCan reports a remarkable 57% rise in 7 years.

Sure. The median amount of financial assets per family climbed from $6,000 in 1999 to $9,900 in 2012, thanks significantly to rising equity markets. Yes, that’s less than ten grand. Meanwhile wealth is concentrating at the top. This is a snapshot of financial failure. — Garth

#138 Not Jason Kenney on 04.25.14 at 3:02 am

Read the CD Howe Report on TFW.

http://www.cdhowe.org/pdf/commentary_407.pdf

Now we know why Vancouver’s prices have been skyrocketing. Out of 191,000 TFW entries into Canada, Vancouver and Calgary got over 120,000.

That translates into about 80,000 TFW entries into Vancouver. Add to that about 45,000 immigrants.

Result: 125,000 newcomers per year excluding foreign students.

WOW! 5% year over year population growth will cause any RE to go ballistic.

Temporary foreign workers making minimum wage do not buy houses in Vancouver. — Garth

#139 Tony on 04.25.14 at 3:42 am

Re: #20 New_Grad on 04.24.14 at 7:00 pm

That would likely lead to personal bankruptcy since you’d be buying at the absolute peak of the market and we’ve already seen what happened to other countries around the world.

#140 BillyBob on 04.25.14 at 4:36 am

“I’m so glad I have the option to work in other countries relatively easily (British passport so access to EU and a flexible lifestyle). I am strongly against higher CPP premiums. I invest for my future and do not need a forced savings plan or government to hold my hand. No way in hell am I spending the next 20 some odd years working in Canada and paying higher premiums because
Canadians are pathetic savers. Time for people in this country to get their s*** together!”

Hmmm. As a longtime expat – not someone who just talks about it – I can assure anyone that Europe is not exactly the land of opportunity these days. I also have the right to live and work in England and could through that, obtain the passport and have access to the EU.

Except, there are no jobs. None. Not of any quality, anyway. In the Middle East where I work, there are over 100,000 expat Brits alone. The ones I speak to left because they were sick of paying massive taxes to support out-of-control social programs. Sound familiar? Europe is like Canada on steroids when it comes to taxation and social programs, with less jobs. Viewing it as an escape plan is simply wishful thinking.

Yes, possibly it could be a retirement alternative, the dream of a cheap property on the Med is a popular one. But going there to plan to live and work until retirement, well good luck with than in Spain, Italy, France, etc…and of course Greece.

The jobs – if you have the skills – are in the Middle East and East Asia. Not too surprisingly, in places most people are less willing to live and work. But living in a villa on Mykonos for pennies a day is just a pleasant fantasy, much like the notion of idly riding through the Chunnel to nibble croissants on a whim.

If Canada is in trouble, Europe is a basket case. But we all need to believe that the answer is somewhere else, I get that.

#141 Soylent Green is People on 04.25.14 at 4:42 am

Corp were told to make a fat donation to Harper con party in xchange for fast tracking their temp foreign worker scam. Also gave their bus pals a payroll tax break.

So no McJobs for the young or old

Canada will be a country of holocaust skeletons

Thank Harper reform gov

.

#142 Nobleton Bill on 04.25.14 at 6:30 am

#23 Victoria Real Estate Update on 04.24.14 at 7:04 pm

If you passed over what this person wrote because it was toolong…it’s a MUST read……it’s the alternative to the current Toronto market. Read It!!!!!

The story this year in Victoria has been the continuation of weak single family home sales.

There is no better indicator of an unhealthy real estate market than slow, sluggish sales.

Overall, it’s a buyer’s market in Victoria and has been for some time. There is more than enough inventory and too few buyers. Buyers have an advantage over sellers in price negotiations.

So far this year, SFH sales are well below Greater Victoria‘s 5 year average.

Total (yearly) SFH sales in 2010, 2011, 2012 and 2013 were approximately 30% below Greater Victoria’s 30 year average (population adjusted). This weakness has continued into 2014.

So far this year, SFH sales in the expensive group of areas (Oak Bay, Saanich East and North Saanich) are dismal. The SFH sales total (January through March) is only 210. Let’s compare this number to other years:

2014: (210)

2006: (254)
2007: (280)
2008: (266)
2009: (222)
2010: (259)
2011: (234)
2012: (228)
2013: (188)

Why are SFH sales across Greater Victoria so low? There are a number of reasons:

1. House prices across Greater Victoria have fallen 10-15% from the peak (2010). As a result, there are many (underwater) mortgage holders who have, effectively, been eliminated as potential move-up buyers. They simply cannot sell their properties without either declaring bankruptcy or writing a massive cheque to the bank.

2. More potential buyers are content to sit it out on the sidelines, rent and wait for lower prices. As prices peaked in 2010, many of these potential buyers were told that it was a good time to buy and that prices could only go higher. However, prices have fallen 10-15% since 2010 and many of these potential buyers have learned that it isn’t always a good idea to follow the (buying) advice of those who prefer high house prices.

3. House prices across Greater Victoria are simply too high and there are not enough (qualified) potential first-time buyers (even with historically low 5-year mortgage rates). The pool of potential first-time buyers has dried up.

House prices in the US peaked in 2006 as the pool of potential first-time buyers dried up. The result was a major price correction (bank failures happened after house prices began to fall in the US).

4. There is a standoff between sellers and buyers. Many sellers are unwilling to sell at (falling) market prices and many buyers are simply not interested in bailing out greedy sellers.

Seller/buyer standoffs were common in many US cities as prices peaked (in 2006) and began to fall. Eventually, buyers won as sellers were forced to give in to the demands of buyers. The result was lower prices. The same will happen in Victoria and across Canada.

Speaking of the US, let’s take a look at house prices in Dallas, Texas.

House criteria:
* min. 3 bed, 2 bath
* min. 1800 sq. ft. of above ground primary (main) living space
* 2004 or newer
* attached double garage

In Victoria, a house like this would probably cost $700 K or more.

In Dallas, the combined value of these 6 houses (that fit the above criteria) is about $679 K.

$98 K (3 beds, 2.5 baths, 1,997 sq. ft.)
$100 K (4 beds, 2 baths, 1,816 sq. ft.)
$111 K (3 beds, 2.5 baths, 2,180 sq. ft.)
$115 K (4 beds, 3 baths, 2,069 sq. ft.)
$123 K (4 beds, 2.5 baths, 1,925 sq. ft.)
$132 K (4 beds, 2 baths, 1,944 sq. ft.)

Household incomes in Canada and the US are similar, therefore, house prices should be approximately the same as well. Clearly house prices in Victoria are extremely overvalued and ripe for a major correction (prices always revert to the mean).

Girls and guys, hold off on your buying plans until house prices in Victoria fall a lot more. House prices in Victoria have already fallen 10-15% from peak, which is quite amazing, considering that 5-year mortgage rates have been historically low for some time and that house prices across the rest of Canada are still rising.

Renting for now is a no-brainer. Do not buy a house right now, that’s an order. LOL

Until next time – Cheers!

#143 Nobleton Bill on 04.25.14 at 6:40 am

#23 Victoria Real Estate Update on 04.24.14 at 7:04 pm

I’m pretty sure the below statement is starting to surface in the GTA now….I’ve seen price adjustments for many homes in the $900’s-1.1million in the range of $25K reductions. “Stand Off” seems to be correct. Well written #23

4. There is a standoff between sellers and buyers. Many sellers are unwilling to sell at (falling) market prices and many buyers are simply not interested in bailing out greedy sellers.

Seller/buyer standoffs were common in many US cities as prices peaked (in 2006) and began to fall. Eventually, buyers won as sellers were forced to give in to the demands of buyers. The result was lower prices. The same will happen in Victoria and across Canada.

#144 Joe on 04.25.14 at 6:57 am

$1400 per month in pension income is by far NOT a crisis. Sure it isn’t a lot of money but it’s definitely doable for poor people, heck some folks would feel great with that kind of steady income.

But for upper class folks it’ll be gut wrenching. Luckily most Canadians aren’t part of the upper class.

That is the max amount available only after more than 30 years of continuous employment. The average is $1,100 a month. Nobody can live a happy life on that. — Garth

#145 JBKitchener on 04.25.14 at 7:13 am

Taking CPP early
Garth your advice is good only if people invest the money
Given your statement that 89% of people will rely on CPP to live then they lose by taking CPP early. Your advice is only good for people who save money not the 89% who need the money to live! If your a spender wait, if your an investor take it early. Oh by the way you better watch out as many corporations merged their pensions with the CPP in the 1960s. Therefore your corporate/civil service pension declines by an equal amount if CPP at 65. It something many do not understand.

#146 Chickenlittle on 04.25.14 at 7:31 am

#47 JSS from Wednesday:

What do you do? As for the urgency, funny enough i just read this article and it made me think of what you posted about your review. Here’s a “clip”:

“The motives for displaying grit also raise important psychological questions. What matters isn’t just how long one persists, but why one does so. Proponents of grit rarely ask: Do (employees) love what they’re doing? Or are they driven by a desperate (and anxiety-provoking) need to prove their competence? As long as they’re pushing themselves, we’re encouraged to nod our approval.”

” In other words, those who do what they’ve been told, regardless of whether it’s satisfying or sensible, are rewarded by those who told them to do it. ”

http://www.alfiekohn.org/miscellaneous/grit.htm

This article is about students, but i think it is about all of us really. I hope you enjoy it!

#147 Italians love real estate on 04.25.14 at 7:37 am

#132 Myer Lanski

Wow, too many ” everybody loves Raymond” reruns or perhaps ” the sopranos ” Myer?

All I say is Italians love real estate.

What a diatribe you went into

I think you are the one that needs to settle.

#148 maxx on 04.25.14 at 7:44 am

We truly are at the eleventh hour with respect to boomer retirement income needs. For so many, real estate “affordability” (based on external opinions) has eclipsed most future aspects of life which have now become hyper-critical.

Planning for income stream diversification is obviously best done at a young age. Most don’t get this, nor the balance between them. Non-registered funds, registered funds, government pensions, re and learning how to spend (!) are all critical. If achieved, they surround you like a warm blanket at retirement time.

One of the most impactful statements I’ve ever read was from a couple in David Chilton’s excellent book, “The Wealthy Barber”, in which they state: “we don’t do debt”. No casino mentality there, just a tried and true way to create wealth and more importantly, keep it.

The process of becoming rich is hard work, not sexy and very often a lonely road. Some people do fall a$$ backwards into great situations, but they are a statistical minority and often end up victims of “easy come, easy go”.

Youth is gold. Everyone is a potential winner when they are young, but not always so much on the eve of retirement.

#149 yorel on 04.25.14 at 7:46 am

#8
The government does not keep the fact you must apply for the OAS a secret. They give you a heads up about a year ahead of time.
Unless I was special.

#150 miketheengineer on 04.25.14 at 8:25 am

Garth et al:

Solution is really simple to the retirement crisis. Abolish the RRSP programs…all of them. Then have government take 10% off everyone’s pay for retirement. Then when you retire, you get enough to retire, based on what you put in…simple….and mandatory.

Then there is no issue….everybody has something….and there is no risk, cause the government controls it. The market could go up or down, who cares….your money is in the big pot with everybody elses.

But this would put they whole financial system upside down…imagine all those brokers and financial people who sell RRSP’s out of work.

#151 Sean on 04.25.14 at 8:40 am

#28 HogtownIndebted on 04.24.14 at 7:12 pm

————–

Wonderful take on things! We are all bombarded by the same, boring (adjusted) economic indicators, on a daily basis. It is fascinating to hear this sort of anecdote.. and, yes, I think it probably is somewhat of a canary in a coal mine.

#152 JBKitchener on 04.25.14 at 8:47 am

To Mike the Engineer

I hope you do not build bridges

The government already takes all your money in the form of taxes and they still cannot balance the books
and they have a cumulated debt of all governments of 1.2 Trillion, I do not want all my money in the pot, I want to manager it myself thank you very much.

PS Buy Gold

#153 Kris on 04.25.14 at 8:48 am

The Boomer housing sell-off theory needs to be tempered with the reality of (1) most Boomers having kids who can take over those homes, and (2) demand propped up by constant immigration.

(1) Asset-poor Boomers need cash flow. Are their kids going to buy their homes from them at market value? Hardly. (2) Immigration didn’t save the US market, and – at 0.8% of the population annually – won’t save this one. — Garth

#154 Stickler on 04.25.14 at 8:51 am

I couldn’t agree more!

Higher taxes (in all forms), higher utilities, higher food costs.

Also keep in mind all the aging infrastructure that needs to be updated and or replaced.

How much would it cost to bring all infrastructure from “fair” or lower up to “good” (good means Adequate for now -> not “fit for the future”) (2012 report):

25.9 Billion for Drinking Water
39 billion for wastewater
15.8 billion for stormwater
91.1 billion roads
——————–
171.8 Billion

-> and that’s just 4 basic areas…

#155 maxx on 04.25.14 at 8:52 am

#16 LH on 04.24.14 at 6:55 pm

“BEST PENSION
Paid off brick houses in M5T, M5S or M5R
There will always be students to pay rents which grow with CPI.

One student = OAS
Two students = maxed out CPP
Ten students = comfortable retirement”

……….dream on…..a total nightmare imho, owner live-in or out. Two students in the condo below us was a surrealistic nightmare. They were ultimately thrown out, but succeeded in completely trashing the place beforehand.

Landlordy income in retirement is a recipe for disastrous emotional potholes and a reliably predictable forfeiture of part of the “BEST PENSION”. You first.

#156 Dupcheck on 04.25.14 at 8:55 am

“$7,596 a year” that is in average what a 650,000$ home owner will pay in taxes per year. As we know lots of boomers have this type of homes. If they rely on CPP only, they would have to eat grass and drink rain water.

Question: How much tax break do the retires that own homes get?

#157 QC reader on 04.25.14 at 8:56 am

Garth, any comments on the new REP plan (Régime épargne-propriété) new QC government is baking?

This may impact QC housing market. Increasing prices.

They see the 61% ownership in QC as a problem, instead of a blessing.

Would you make politicians pass a financial exam in order to be eligible for elections?

#158 Vancouver RE agent on 04.25.14 at 9:01 am

That is the max amount available only after more than 30 years of continuous employment. The average is $1,100 a month. Nobody can live a happy life on that. — Garth

Sure you can. Have you heard of Peru or Philippines ? You will live very comfortable life there on much less.

#159 Daisy Mae on 04.25.14 at 9:07 am

#31 Mishuko: “What if the boomers retire and then realize they are broke and need more income only to re-enter the job market?”

***************

Doing what? Even Walmart is cutting back hours for their ‘greeters’….

#160 TurnerNation on 04.25.14 at 9:12 am

200th already?

Today’s pic: it’s only a V6 Mustang. He forgot the rule There’s no replacement for displacement. (V8)

#161 Stickler on 04.25.14 at 9:33 am

That is the max amount available only after more than 30 years of continuous employment. The average is $1,100 a month. Nobody can live a happy life on that. — Garth

————————————
Not in Canada, hence the exodus.

What exodus? — Garth

#162 maxx on 04.25.14 at 9:36 am

#24 Maxamillion on 04.24.14 at 7:06 pm

The good times are OVER.

Tend to agree that the harvest in low-hanging fruit for the average person is past. The time for easily powering away huge wealth was in the period ’92-2007 and then the hiccup afterwards. It can still be done, however nowhere near as easily.

We live in a very different world now whereby making, keeping and preserving wealth are much greater challenges and will continue to be so. Huge numbers of newly minted, talented and educated people are now sliding around the globe with ease, money is largely unfettered and corporate sway on domestic and foreign policy has been increasing…..

We are responsible for making our own good times- the operative word being “make”. Passivity is no longer an option.

#163 Linda Mulligan on 04.25.14 at 9:41 am

#122 – infrastructure like any other manufactured product has a finite life span. Maintenance & replacement costs will occur. The point being made is that the senior generation has already paid for the structures everyone enjoys – youth, simply by not having yet had time to work or pay taxes has had the benefit of the infrastructure & must now pay in turn to continue to enjoy that benefit. Seniors et al continue to pay in until the day they die. Also, CPP is not a government subsidy or freebie – it is 100% funded by workers (you & me) & the seniors in question are merely receiving the pension they paid for. CPP was never meant to replace 100% of employment income – it was meant to replace about 25% of it. So if you could not or would not save for your future, here you are, living pension cheque to pension cheque & maybe making choices as to whether you pay the rent or eat that month. Thank God for food banks & homeless shelters – yes, you will see the ‘entitled’ seniors you scorn occupying both on a regular basis.

#65 – regarding using the house as an ATM to fund retirement, that works only for the early few (at best). Banks don’t want your house if they can’t make a profit on it & if no one is buying, they will likely not be handing out reverse mortgages the way they might be now. Further, the bank usually requires that their asset be maintained & the money comes with the condition it is spent on home maintenance. So much for living like a rich person until you die – more like, becoming caretaker for the bank & paying for the privilege to boot.

#164 Stickler on 04.25.14 at 9:43 am

@ #161 Stickler on 04.25.14 at 9:33 am

That is the max amount available only after more than 30 years of continuous employment. The average is $1,100 a month. Nobody can live a happy life on that. — Garth

————————————
Not in Canada, hence the exodus.

What exodus? — Garth
——————————–

The exodus I predict of low income retirees fleeing to warmer, cheaper destinations.

I’m working on building discount retirement villas with an on site hospital…because boomers are afraid to be more then 5 min away from a hospital.

Who’s in?

#165 Old Man on 04.25.14 at 9:49 am

#159 Daisy Mae – my part-time greeters job went south as was replaced by the Temporary Foreign Worker Program too.

#166 Daisy Mae on 04.25.14 at 9:59 am

#78 Freedom First: “I always enjoy coming here to hear the truth, as it helps keep me centered and deadens the volume of the financially insane majority. Thanks Garth.”

****************

Isn’t that the truth? I watch what people around me do…and it’s very unnerving.

#167 Old Man on 04.25.14 at 10:04 am

Mr. Kenney the Minister for Unemployment has just degreed a moratorium on all restaurants to hire any temporary foreign workers. There is now an outcry from the restaurant industry that they will go broke now. We need to reform the reformists who are causing chaos in our country before its too late.

#168 :):(Ying Yang on 04.25.14 at 10:16 am

#223 Old Man on 04.24.14 at 6:31 pm

#221 Smoking Man – saw the property you linked in Long Branch and its a winner. I wish that the address was disclosed as wanted to drive around in my new google caddy to look around a bit.

………………………………………………………………………….
Its at 53 James Street, had a look at it last night had to see this little gem for myself. I think the owner was a therapist or something the agent said. It needs some improvements but OK, at least it has two parking spots. Most of the homes here only have one to two so if you have more than two vehicles your screwed. You have to park on the street. The street is in rough shape needs paving badly. I think a new roof is in order as well in the near future but otherwise a gem.

#169 Gloomy Gus on 04.25.14 at 10:32 am

#156 Dupcheck on 04.25.14 at 8:55 am
“$7,596 a year” that is in average what a 650,000$ home owner will pay in taxes per year. As we know lots of boomers have this type of homes. If they rely on CPP only, they would have to eat grass and drink rain water.

Question: How much tax break do the retires that own homes get?
——————————————————–
First off my 650K home in Toronto (only 650, I know it’s a dump) has property taxes of 3450/yr.
Secondly there are programs available to low income seniors which will defer tax increases.

#170 Nemesis on 04.25.14 at 10:38 am

#InDenial #ElToroPooPoo #WouldYouLikeFriesWithThat? #ClubFedStaycations

“It’s bullshit OK! I used those words when I described my conversation with the minister last week. He gets it.” – John Betts, CEO McDonaldsCanada

[CBC] – Exclusive: McDonald’s Canada CEO calls foreign worker controversy ‘bullshit’

…”The CEO of McDonald’s Canada has branded recent criticism of its use of temporary foreign workers “bullshit” in a conference call to franchisees that was given to the CBC.

His remarks from earlier this week came before federal Employment Minister Jason Kenney announced an immediate moratorium on the food services sector’s access to the Temporary Foreign Worker Program late on Thursday, as a result of CBC Go Public’s inquiries.”…

http://www.cbc.ca/news/canada/british-columbia/mcdonald-s-canada-ceo-calls-foreign-worker-controversy-bullshit-1.2621151

#171 Nemesis on 04.25.14 at 11:00 am

#Denial #AndYetItMoves #FirstWeTakeManhattan #SmackDown!CommunistQuizPanel

[Reuters] – The Chinese take Manhattan: replace Russians as top apartment buyers

…”(Reuters) – For the first time, the Chinese have become the biggest foreign buyers of apartments in Manhattan, real estate brokers estimate, taking the mantle from the Russians – whose activity has dropped off since the unrest in Ukraine and the imposition of sanctions against Russia by the United States…

…The brokers say that many Chinese buyers are also investing abroad so they can own property near major educational institutions. Some are buying homes near top colleges — even though their children are so little they can’t walk yet. More than 80 percent of wealthy Chinese want to send their children overseas to school, according to the Hurun Report, a Shanghai-based publication.

“By far and away, the Chinese are the fastest growing demographic,” said Dean Jones, a U.S.-based broker with Sotheby’s International. “They are the top consumer for real estate, and New York is front and center.”

Added Pamela Liebman, CEO of the Corcoran Group, one of the best known New York real estate firms: “In sheer numbers, the Chinese outspend the Russians in every segment of the market.”…

…Some Chinese aren’t even bothering to come to the United States at all, going so far as to pick up multi-million-dollar properties sight unseen.

One Chinese buyer recently purchased two properties, worth $13 million, at the Baccarat Hotels & Residences in New York. The entire deal was done via the Chinese social networking site WeChat, according to the broker who did the deal, Douglas Elliman’s Emma Hao.”…

http://www.reuters.com/article/2014/04/25/us-realestate-china-manhattan-insight-idUSBREA3O0TL20140425

#BonusFridayFun

http://youtu.be/vZ9myHhpS9s

#172 NCYer on 04.25.14 at 11:03 am

#65

So is it possible that reverse mortgages drain the Boomes of their equity and then the bank takes over the house and sells it at a huge discount?

If so, I’m all for it.

#173 garthindenial on 04.25.14 at 11:06 am

Take your head out of the sand and face the reality that’s right in front of you

http://finance.yahoo.com/news/chinese-manhattan-replace-russians-top-apartment-buyers-113332662–sector.html

Ahh… that article is about Russians in New York. — Garth

#174 Oceanside on 04.25.14 at 11:09 am

#145 Oh by the way you better watch out as many corporations merged their pensions with the CPP in the 1960s. Therefore your corporate/civil service pension declines by an equal amount if CPP at 65. It something many do not understand.
_______________________________________________

It is called a “bridge benefit” and can range from a few hundred to a thousand, depending on your income and arrangement with your own plan, I get a small one so when I turn 65 and get my OAP I will actually earn more as my bridge is $450.00.

Curious about the interest in moving to South America or Asia after being retired. Living on Vancouver Island we see many retirees move here from Alberta, the lower mainland and from other locations only to move back when they realize that they were too far from their children and grandchildren, seems to be quite common and these are a strong pull. If one had no rellies it might be more appealing.

#175 Doug in London on 04.25.14 at 11:14 am

@Potemkin, post #129:
Wrong! Retirement is a product of the industrial age, where automation has increased productivity to the point where older people can live off the earnings from money they, or their pension plan, saved up over the years. As one who is semi retired (working only sporadically) and who knows many retirees can tell you, retirement is HEAVEN ON EARTH! It’s awesome being able to do get up when you want, and do what you want when you want! There’s no life like it!
If Boomers had the sense to save more over the years, they could retire fully or just work periodically or part time. That would go a long way to solving this nagging youth unemployment problem. Such an arrangement would be a win-win situation for everyone involved.

#176 Babblemaster on 04.25.14 at 11:22 am

The warnings about RE being at it’s zenith have been greatly exaggerated over the last 6 years. Those that listened to the sage advice of Garth and stayed out of RE have lost out on big leveraged gains. The “greater fools” that lapped up the hysteria of the mainstream media have been richly rewarded. I agree that by all reasonable standards RE is insanely priced, but that has not stopped it’s upward trajectory. And who knows when it will. I don’t think anyone does.

My message has been to diversify, not to exschew real estate. If you can’t own a house without diversifying into other assets, you shouldn’t. — Garth

#177 Daisy Mae on 04.25.14 at 11:26 am

#94 Whinepegger: “I hear a good number of my boomer friends indicating its something they’ll consider when they need retirement cash.”

******************

Do they understand how Reverse Mortgages really work — that interest charged on that advance will systematically eat up remaining equity?

#178 Daisy Mae on 04.25.14 at 11:31 am

#97 BCD: “…number #10 cans of beans (all of which I have stored myself btw).”

******************

Canned goods DO have an expiry date…keep rotating! ;-)

#179 Shawn on 04.25.14 at 11:54 am

Investing Success Story

I invest mostly in stocks. Relatively blue chip type stocks. Stocks that have earnings and usually dividends. Some are mega caps, some smallish, no micro caps, Not lottery ticket type stocks. I concentrate in my best picks. I keep a chunk in cash or near-cash for opportunities and to offer some stability.

No advisor can recommend such an approach as it is deemed far to risky.

The gain so far this year is 7.0% on my total portfolio.

Admittedly that does not seem sustainable since my portfolio P/E ratio (counting cash) was 24 at the start of this year, meaning that this portfolio should have earnings (not, gains, and not dividends but earnings on the underlying companies) of 1/24 = 4.2% in a year. The P/E excluding cash was only 15.4 (indicating lower risk stocks) and even there the companies I own would therefore earn 1/15.4 = 6.5% in the full year.

With some P/E expansion and a bit of profitable trading I have somehow earned 7% in four months. Part is explained by exchange gains on my U.S. investments.

Overall, perhaps my experience illustrates that good returns can be had from the stock market (I have a 14.9% compounded average since the year 2000 so I am not basing this on four months).

So… Read Buffett and other good investing advice.

Be prepared to whether temporary declines. Long term stocks gains are often paid for in ulcers as you see short-term losses. One must learn to be comfortable with that.

The average stock investor will (by definition) make the stock index – less fees. So only smarter investing (or luck) can explain above-market returns and only a minority of investors can ever see returns above the index from stocks. That is the harsh math.

Best wishes to all.

#180 Son of Ponzi on 04.25.14 at 11:57 am

That is the max amount available only after more than 30 years of continuous employment. The average is $1,100 a month. Nobody can live a happy life on that. — Garth
————————————
Not in Canada, hence the exodus.

What exodus? — Garth
——————
After the locusts ravaged Egypt, there was an Exodus.

#181 Son of Ponzi on 04.25.14 at 11:59 am

Disappointing sales for Ford and GM.
Harbinger?

#182 airhead princess on 04.25.14 at 12:04 pm

” The ‘target benefit plan’ would try to bridge the gap between the rich guaranteed pensions public sector workers get and the non-guaranteed defined contribution plans most corporate plans offer (usually shared RRSPs).”

Apples and oranges G……the civic service DB pensions are paid out in cash….the DC plans are LIRA……and there is no cash flow from the LIRA except as an annuity……try cashing out a portion of a LIRA and see what happens….bwahahahahahahahaha.

Our union meat puppet BOC gov Poloz has announced that interest rates will remain at ZIRP even after the economy is at full capacity. This means that 0.15% annuity payments ( nothing else available through the LIRA vehicle) will be offering starvation rates…..ergo the civil servant pensioners will stay fat and greasy while all others starve by comparison.

#183 Vangrrl on 04.25.14 at 12:04 pm

#140 Billy Bob
Oh I know Europe has its problems and high unemployment. I don’t want to work in Britain specifically. I’m in ESL teaching so in that respect I have a lot of flexibility. I was in Asia for 4 yrs before Vancouver and I wouldn’t rule out going back- it was certainly easier to save money when I lived there. I would love to do a couple years in the Midddle East, challenging but what an experience!

#184 april on 04.25.14 at 12:08 pm

#156- approx 800 dollars……

#185 Aggregator on 04.25.14 at 12:18 pm

Not even twelve hours after Kenny pulls the plug, the restaurant industry comes firing back with threats and consequences of terminating their TFW program:

Restaurants warn of closures in wake of temporary foreign workers ban

Canada’s restaurant sector is warning of reduced hours and the possibility that some businesses may have to shut down in response to the federal government’s decision to to impose an immediate moratorium on allowing restaurants to hire temporary foreign workers.

Joyce Reynolds, Executive Vice-President of Government Affairs for Restaurants Canada, said restaurant shut downs and long lineups were a reality in Alberta before Ottawa approved the program and those problems are now likely to return.

That's what happens when companies get addicted to Canada's QI policy (Quantitative Immigration), and why the government should have never expanded or even started the program in the first place, because if Canadians already disapprove of hiring TFWs in the food sector, then you can bet the next complaints will start emerging from higher quality jobs as more public and private Canadian workers realize they were fired to be replaced some foreigner willing to work for peanuts.

#186 Realtor # 1 GTA on 04.25.14 at 12:20 pm

As the market becomes more segmented prices will fall.
(not below 2010) and the pool of buyers is shrinking.

The condo market is stalling and sellers who want to move up are finding it difficult to sell and/or pull out enough meaningful equity to put down on a house.
This group will be stuck.

Even if they rent out their condo Lenders will not give them another mortgage – if you have a condo under 800sq you are considered a risk

The newly built or flipped home is also experiencing the same as the condo market – many to choose from and priced to high to sell quickly –
Thus these flippers will stop buying old run down homes because they have already inventory to sell or are now scared.
This group is slowly leaving.

But you still have the yuppies that are willing to spend close to a million and carry a 700-800k mortgage.

Some areas that were over bought the last two years will slow down faster – except downtown.

#187 nonplused on 04.25.14 at 12:23 pm

Higher taxes won’t help. All they do is redistribute who has what, they don’t create any money. So tax the working more to give reties less and economics says bye bye work incentive, bye bye economy. There isn’t left anything out here to tax!!!!

What they will do is borrow more money until there isn’t any of that left either.

#188 Pre-retiree on 04.25.14 at 12:24 pm

RE: #29 Pounding sand in Peachland on 04.24.14 at 7:12 pm
I retired at 58, didn’t collect CPP until 65, glad I waited. If u can afford to wait, wait
Bad idea. — Garth

From the above, I will risk extrapolating that Garth would also recommend taking defined benefit pension as early as one can, even if it is at 55 for some, and even if reduced.
I calculated that one would need to live to 85 before being effectively punished. And who can really count on that?

#189 Panhead on 04.25.14 at 12:25 pm

.#99 TheCatFoodLady on 04.24.14 at 10:01 pm
We are perfectly content with our lives – we’ve found peace which is worth more than you can imagine to us.
___________________________________________

You are an inspiration, love reading your comments. You show that money is not everything and that there are more important things in life. Keep your life happy …

#190 David Hawke on 04.25.14 at 12:43 pm

#13 is spot on, retire to a less costly country and liv well on CPP/OAS

#105 when one has no taxable income, no tax is payable to Canada no matter where you live

#71 perhaps you should travel before making silly assumptions

#92 perfect example of a brainwashed sheeple Kanadian

#161 sorry Garth but being an expolitician you’re out of touch with the reality of being a Canadian peon. Us normal people can live a very happy life (outside Canada) on 1,100 loonies a month, even after they have been converted to real money.

Stickler is correct “Not in Canada, hence the exodus.”

“What exodus?” Garth Do some research on the subject, there are more of us than you think who have opted for palm trees instead of a land with 10 months of winter followed by 2 months of poor sledding.

Exodus denotes more tha a few people desetring us. — Garth

#191 nonplused on 04.25.14 at 12:45 pm

Plus I forgot to mention, “retirement” is a relatively new invention, closely related to “ponzi scheme”. Pay people less now and promise them more when they should be dead. Oh wait, they didn’t die? Doh!

For the vast majority of Canadians, well Americans too, who aren’t already retired or working for the government, retirement is a myth. Always was. Ha ha, joke is on you.

#192 Aj on 04.25.14 at 12:49 pm

Here is what I don’t get…..why is it the government’s responsibility to save money for my retirement? Whe was the last time that government intervention went well? If someone is stupid enough to not manage thier own affairs and goes broke at 70, I feel bad for them, but ultimately it’s thier own fault and I have no sympathy.
It comes down to personal restraint and planning. No, you don’t need the 45K brand new Mustang if you don’t have a pension plan, buy the 23K Focus – put the 22K you saved into your pension. New Ipad? Nope. Buy a used one or keep the old one for another year or two. Thinking the expensive all-beef weiners? Well maybe that is an exception! Anyway. my point is that most people don’t have the foresight or restraint to do things like that and don’t live within thier means.
For full disclosure, I am one of the lucky ones who will get a government pension (lucky as in I don’t speak french, so let’s just say I won’t be promoted for a long time), but that still doesn’t entitle me to blow my paychecks every week on luxury cars or big screen TV’s for every room. I read blogs like this every day, plan, save my money and one day will be financially independant and living comfortably irregardless of a pension. It’s not hard, I’m 28 and get this. I would still do the same if I didn’t have one coming to me (who knows, maybe in 30 years I won’t), it just would be harder.

#193 Shawn on 04.25.14 at 1:00 pm

LIRA rules and attractiveness of Target Benefit (TB) plans

Airhead Princess at 167 said:

Apples and oranges G……the civic service DB pensions are paid out in cash….the DC plans are LIRA……and there is no cash flow from the LIRA except as an annuity……try cashing out a portion of a LIRA and see what happens….bwahahahahahahahaha.

*****************************************

Well, actually DB plans ARE annuities and that is exactly what people love about them. If you cash out a DB (which is typically only allowed before a certain age and before you start the pension) you must convert it to a LIRA (albeit sometimes there is an additional taxable amount above certain limits that you get in cash.)

Does anyone know if a LIRA can be converted to a Registered Retirement Income Fund after a certain age?

That would make the DC / LIRA more flexible than the DB annuity. (DB is usually bigger but that is another issue)

Some kind of group Target Benefit (TB) plan is a more efficient system than DC for the simple reason that it would average lifespans and average investments over a longer time period. DC must fund for age 95 just in case… TB and DB need fund only average age say 85 since it is pooled.

For the employee Target Benefit is not as good as DB. But if the DB must go due to too much risk to the employer then a target benefit is the next best thing for most employees. (Keeping in mind that most employees are in no way capable of running their own DC intelligently)

In summary, people should want TB. (Except those who can get DB which is better)

#194 Grantmi on 04.25.14 at 1:03 pm

Oh oh!!

Housing in U.S. Cools as Rate Rise Hits Sales: Mortgages – Bloomberg http://bloom.bg/RSTtYz

After a roller-coaster decade of boom-bust-boom, the U.S. housing market is going downhill just when many economists thought annual sales would be heading up.

Sales of previously owned properties in March tumbled 7.5 percent from a year earlier to the slowest pace in 20 months, while purchases of new houses sank 14.5 percent from February, according to reports this week. Mortgage applications to buy homes plunged 19 percent from a year earlier, indicating slowing demand during what is typically the busiest season for deals.

#195 Shawn on 04.25.14 at 1:06 pm

P.S to air Head princess who said at 182, not 167: This means that 0.15% annuity payments ( nothing else available through the LIRA vehicle)

******************************************

LIRAs can be self directed and 100% invested in stocks.

It’s okay to be bitter about government workers but we need correct facts.

#196 Hawk on 04.25.14 at 1:06 pm

#140 BillyBob on 04.25.14 at 4:36 am

================================

That’s what I had suspected too. Europe, with its high taxes is not a solution for good employment for most people. Australia is probably a better deal.

#197 2CntsCdn on 04.25.14 at 1:08 pm

But on a positive note ……… wait a minute …. there isn’t one. Most Canadians better get a little fear in their bones and get off their butts and plan a little for their future. Because the government isn’t (and can’t) ….. the math isn’t on their side. Their energy goes to putting out shorter term fires and trying to keep the masses happy so as to get re-elected. A campaign of “higher taxes and less social programs and benefits so the wrinkly’s can live a great retirement” doesn’t have a sexy ring to it. But deep down they don’t really care a whole lot …. because they will get great pensions. So fellow readers ……. it’s every man for themselves. If you sit and do nothing … you are passive cattle sitting in a field waiting for your trip to the slaughter house …. a guaranteed miserable future.

#198 Stickler on 04.25.14 at 1:11 pm

“Joyce Reynolds, Executive Vice-President of Government Affairs for Restaurants Canada, said restaurant shut downs and long lineups were a reality in Alberta before Ottawa approved the program and those problems are now likely to return.”

———————————-

To the business owners that complain and state that they Can’t get Canadians to work for them:

What you really mean is you can’t get them to work for you at the wage you want to pay.

The way it is supposed to work is -> you need to pay more or offer some benefit to attract workers. If you can’t then its not a viable business….

NOT bring in foreign workers so you can keep wages depressed.

Lets just outsource all IT, finance, accounting, legal, engineering, admin & government admin jobs overseas.

Lets bring in temp foreign workers in to do all the service jobs & oils and gas field work.

Then Canadians will work where? Sounds like a bad plan for those that can’t afford to retire.

#199 Nemesis on 04.25.14 at 1:17 pm

#FreakyFridayFun #BolshevikBloggers #Décolletage? OohLaLa!

[AlJazeera] – Putin says Internet is a CIA project, Harper envoy calls, “BullShit”, blames GarthTurner

…”Russia’s parliament passed a law earlier this week requiring social media websites to keep their servers in Russia and save all information about their users for six months.

Another new law allowed the government to block blacklisted sites without a court order, and businessmen close to the Russian president now control the country’s leading social media network, VKontakte.

Opposition leader Alexei Navalny had his popular blog blocked and a widely read news site that covered opposition causes sacked its long-term editor and changed its stance after a warning on extremism from the state watchdog. “…

http://www.aljazeera.com/news/europe/2014/04/putin-says-internet-cia-project-201442563249711810.html

[UK Telegraph] – Ignore the cleavage police. Women should go to work with their breasts held high

“I naturally deny the ridiculous rumour regarding the ban on low cleavages at the ministry!” – Ségolène Royal, French Minister for the Environment & Energy

http://blogs.telegraph.co.uk/news/bryonygordonblog/100269056/ignore-the-cleavage-police-women-should-go-to-work-with-their-breasts-held-high/

#200 James Purdue on 04.25.14 at 1:27 pm

“So, it’s up to you if you will be part of it, or join the elite who will escape.”

Any particular countries you think will be a good place to be in ten years from now when it comes to “escaping” from here?

– James

#201 Vermithrax on 04.25.14 at 1:31 pm

I’m still convinced the chipboard and kindergarten glue condos are designed to be future retirement homes in waiting. The Boomers sell those to their kids for $400K, then when they need money and the kid begins a family they sell them their house for $900K, buy the condo for $100K, and move in there. Thus stripping all money from that younger generation twice. …Because those condos won’t be so pretty in 10-20 years. Ever seen an apartment building from the 80s or 90s? They look like out-of-date low-income housing units. There will be giant towers of the aged all over downtown Toronto. And they will rename that area ‘Modor’.

#202 Old Man on 04.25.14 at 1:46 pm

#168 Ying Yang – check out 936 Fourth Street with ID W2839503 which is near the golf course.

#203 Sheane Wallace on 04.25.14 at 1:56 pm

No interest rates increase until at least 2016 said Poloz. Most likely until 2018-2019.

Let me remind that ZIRP are supposed to be temporary to address severe issues with economy. So obviously economy is not ‘recovering’. Yes but we apparently have surplus (5 billions for February)…

It is all about peak debt, we can’t keep increasing debt with higher interest rates.
There is another solution – tax breaks, but this does not work for the corporate buddies and the banks.

Bad news for savers. Be very worried.

Glad I diversified all my assets on time.

#204 bigrider on 04.25.14 at 1:58 pm

If you are going to delete my post regarding the correction of your math in your #137 post response, at least correct it and make it look like it is your correction…LOL

It is unbelievable to me how big numbers lend to big mathematical errors, even among the schooled and informed.

By the way, da house prices, she’sa still gonna go uppa , Uppa UPPA !!

Not my math. – Garth

#205 Old Man on 04.25.14 at 2:10 pm

#168 Ying Yang – I checked it out with my google caddy and that house is against the railroad tracks; not a good investment for such a nice home :(

#206 Blacksheep on 04.25.14 at 2:15 pm

“a few people deserting us. — Garth”
—————————–
Meaning: Deserter,

“abandon (a person, cause, or organization) in a way considered disloyal or treacherous”

Yes, all you treacherous, disloyal people should be ashamed of your selves!

Garth, you point out a coming social problem.

These liberated souls offer an actual alternative solution and instead of discussing it as an option for some, you question the messengers character?

When you make comments like this I cant help but see you as a fear monger, in advisor’s clothing, as you may as well be selling generators (yes, I was here). Don’t expect you to post this, but wanted to give you some feedback from a multi year reader.

#207 D-Oh! on 04.25.14 at 2:20 pm

Garth, after lalapolozo’s announcement of interest rates, what you say on strips or strip packages. Are they safe for the next,say,3 years?

Marci!

#208 Bank Of Canada on 04.25.14 at 2:23 pm

CTV just quoted Oliver saying no rates hikes until 206-2017. After that, he said expect very little movement because of Canada’s Demographic challenge.

Translation: move money out of C$

This ship is going to the 50 cent dollar.

Oliver does not set rates, and he did not say that. — Garth

#209 Ry YYZ on 04.25.14 at 2:26 pm

#83 Ret on 04.24.14 at 9:26 pm

That’s one of things that really bothers me, is the short-term thinking that has gone on in the government (and the public that elects them) for so long. To take just one example, look at the CPP.

Back in ’96 they jacked up the contribution rates, just about the time I was really starting to make money. The rate I was contributing at would have been enough to cover my CPP payout, but of course the system was heading towards bankruptcy because it had been set up from the beginning as an inter-generational income transfer – the earliest recipients had put in very little for what they got out. No, they needed a big increase in payouts from the boomers and people like me (barely post-boomer) so that the boomer bulge would not bankrupt the CPP. Did it really take until ’96 to figure out the effect demographics were going to have on the CPP? No, the existence of the big bulge, and its eventual effects were known well before that. Plus, as said, the CPP was never really set up to be on a sound financial footing in the first place.

Actually, given the paltry amount of money available from the CPP, and as someone else pointed out, the fact that you can get almost as much from the OAS and GIS if you’ve never worked a day in your life, I don’t know why we didn’t just improve the basic pension available to everyone in this country, regardless of work history. I would have actually preferred that to the illusion of a contributory pension plan which really isn’t.

One thing I do know – if I was able to take the CPP contributions made by myself and my employers and invest it on my own, it would surely add up to a lot more in retirement than I’ll ever get out of CPP (unless I live to be 100, which isn’t too damn likely given my family history).

#210 Daisy Mae on 04.25.14 at 2:27 pm

#169 Gloomy Gus: “Secondly there are programs available to low income seniors which will defer tax increases.”

*****************************

Tax ‘increases’? You mean property taxes, period. Yes, property taxes can be deferred, as we know…but there’d be substantial cost in doing so (a lien?)

#211 Old Man on 04.25.14 at 2:39 pm

The complex nature of Real Estate can become confusing at times. The other day was surfing and found this apartment building so zoomed in to get the address and typed it in. This brought up a company name that never heard of before and looked at their holdings with the corporation history. I knew this guy, so why did he transfer about $50 million into this new shell company; one property I recognized but the others were new? Where did all these hidden properties come from, as know his main portfolio?

#212 Shawn on 04.25.14 at 2:44 pm

Think Low Interest Rates are Abnormal?, Think Again.

Here is how things stood in the years leading up to 1776 when Adam Smith was writing the Wealth of Nations. He said:

“Private bankers in London give no interest for the money which is deposited with them.”

(Regarding) “the rate at which people of good credit usually borrowed. Since the time of Queen Anne, five per cent seems to have been rather above than below the market rate.”

The legal rate of interest in France in 1720 was reduced from 5% to 2%.

“The supposed purpose of many of these violent reductions in interest was to prepare the way for reducing that (i.e. the interest) of the public (i.e government) debts”.

Hilarious, sounds familiar, no?

The introduction to the next quote is paraphrased. In a rich and fully developed country there is a great deal of investment capital available and therefore the ordinary rate of profit on (equity) investments is low “so the usual market rate of interest which could be afforded out of it, would be so low as to render it impossible for any but the very wealthiest people to live upon the interest of their money.”

Again, this is hilarious because it applies so exactly today.

People, we are not in a “New Normal” of low interest rates, instead we have returned to the somewhat older Normal. Do not hold your breath for interest rates to rise much.

All the Adam Smith quotes are from Book 1, Chapter V of the Wealth of Nations published 1776.

#213 Doug in London on 04.25.14 at 2:57 pm

@Aj, post #192:
You make some good points. I’m 53 now, but understood the same ideas as you when I was that age. People should take more responsibility for their finances and saving for retirement. For the last 20 plus years the government has been screaming at us, at a painful 110 dB or more, to save more for retirement. First they increased allowable RRSP contributions in the early 1990s, reduced the capital gains tax in 2000, late last decade they increased the allowable foreign content in RRSPs to 100%, and most recently (thanks to Garth for getting the process going for this one) gave us the TFSA in 2009. If you were making good wages over the last 20 years or more and could afford to save more but didn’t, you have no one to blame but yourself.

Before the 2008-09 financial crisis, it seemed everyone in various businesses all wanted lower taxes and less government intervention. When the crisis hit, suddenly it seemed they all had their hands out for government assistance. It’s easy to criticize business for this double standard, but we consumers are guilty of the same actions. For years we all complained taxes (including CPP contributions) were too high and elected governments that promised tax cuts. Now it seems we want MORE money from government with more generous CPP payments. It appears most Canadians have yet to figure out you can’t have it both ways.

#214 Free Beer Tomorrow on 04.25.14 at 3:01 pm

Temporary foreign workers making minimum wage do not buy houses in Vancouver. — Garth
*********************************************

Of course they do. They are paying the mortgages of the people who bought the homes who are “renting” the houses/rooms/closets to the TFWs. Its called capitalism at the expense of Canadians. Good thing this is getting so much exposure. Thanks as always Garth !!

#215 airhead princess on 04.25.14 at 3:05 pm

G…you should explain the difference between the DB civil servants get and the DC Plan that the private sector has. You REALLY have to tell people that the DC is a LIRA Plan…not an RRSP. You REALLY have to explain the difference between the LIRA and the RRSP and the DB……the results are hugely important to people who don’t understand what a LIRA is and how/why it is/was constructed. When a company and you deposit matching funds into a DC Plan it is in no way an RRSP LIKE VEHICLE……any less is a dis….service and people should also know that the DC Plans shorts their maximum contribution and that they should also be contributing to an RRSP and TFSA so as not to go into retirement thinking the LIRA they have with the company is ever going to be returned to them in cash…..it isn’t.

#216 fixie guy on 04.25.14 at 3:23 pm

#201 Vermithrax : “…Because those condos won’t be so pretty in 10-20 years. ”

Busted, depreciation is really a Boomer generational conspiracy to steal your precious entitlement. We would have gotten away with it too if it weren’t for you darn kids.

#217 Valley boy on 04.25.14 at 3:28 pm

Your right G,

People are idiots about there retirement. I’m asking people about our pension ran by a bunch of idiots from the 70’s till now. And most people don’t have a clue. Sadly the average employee will put in $12000 soon into this terrible plan and Ot is pretty much donated. The trustees avoid any tough question and just make the active members pay more lol. Some trusties. A billion dollar plan barly growing in membership in the good times at 60 percent solubility. As you say Garth what can go wrong.

#218 devore on 04.25.14 at 4:02 pm

#173 garthindenial

Take your head out of the sand and face the reality that’s right in front of you

As the article points out, Chinese are buying in US because US real estate is cheap after the bust.

Russians aren’t buying because, well, checked the news recently?

#219 Doug in London on 04.25.14 at 4:05 pm

@Vermithrax, post #201:
Ever seen an apartment building from the 80s or 90s? They look like out-of-date low-income housing units.
—————————————————————-
Oddly enough I see rental apartment buildings here in London, and many other places I’ve been which were built in the 1970s and 1980s and they’re still in very good shape. In 2012 CAP REIT bought some of these apartment buildings in London, has put some money into fixing them up (minor repairs, nothing major), and is probably making good money on them. Speaking of which, CAP REIT is still a good buy at $21 and change if any of you out there are still itching to buy real estate.

#220 Pope Snugglebamboozledbombed the 974eq (aka Nosty) on 04.25.14 at 4:05 pm

#7 Ralph Cramdown on 04.24.14 at 6:41 pm — “With global warming, there won’t be any icebergs to encourage the oldsters to hop onto right when we’ll have most need. Ironic, no?”

Not quite sure what you’re alluding to. Great Lakes Ice and Big Iceberg Does not include what is under the surface. You may like to research volcanoes (Lava Bombs) as the more ash that spews into the air, the more the sun’s rays are blocked out. Hence, getting colder.

#114 Mr Happy on 04.24.14 at 10:43 pm — “…There are some big storm clouds ahead, and I am not even gonna talk about what Putin “The Conquerer” could try and pull….”

Hmmm. As the Crimean govt. voted 78-0 to leave Ukraine and join Russia, then citizens voted overwhelmingly likewise, there is no problem. Crimea exercised its freedom of choice, so did citizens. Possibly the problem lies with the western bankers? Plus Altyn to be a new gold-backed Eurasian currency, Russian military (with video) and Naughty west.

#199 Nemesis on 04.25.14 at 1:17 pm — “Ignore the cleavage police. Women should go to work with their breasts held high”

Wouldn’t that defy the law of sexual physics?!

Oligarchy and TFW US-style. The two go together like a horse and carriage, Accidents, or shit happens.

#221 espressobob on 04.25.14 at 4:07 pm

#185 Aggregator

Having been in the foodservice industry for some 25 years (too long) I don’t see this problem of foreign workers being much of a factor.

Most restauranteurs are more interested in individuals who prove some competence and desire to move up the ladder. A win win. Flipping burgers, slinging double doubles & scrubbing toilets doesn’t cut it!

It’s surprising how many Canadian workers lack any enthusiam or discipline in creating a better future for themselves. TFW’s don’t seem to have that issue.

#222 Mark on 04.25.14 at 4:19 pm

“Most restauranteurs are more interested in individuals who prove some competence and desire to move up the ladder.”

In the restaurant industry, that’s an awfully short ladder for most.

#223 Linda Mulligan on 04.25.14 at 4:27 pm

#182 – Question (anyone feel free to answer) – how much money would you consider to be a ‘gold plated’ DB pension? Do you have a figure in mind – example, $10,000 per year, $50,000 per year, $100,000 per year. Is your defined amount in before tax or after tax dollars?

#190 – I did not say that Canada would get any taxes collected. I said Canada has reciprocal tax agreements with most countries & to check the Gov’t of Canada website for details. Based on what I read there, your pension or other income from Canada may be taxed depending on just how much that income adds up to. Yes, $1,100 per month means you can live well in a number of warmer climes but – keep in mind what isn’t very much income here is often a lot of income there so you are very likely to be assessed tax by the local government.

#224 Tom from Mississauga on 04.25.14 at 4:38 pm

GARTH STOP THE PRESSES!!!

http://www.theglobeandmail.com/report-on-business/economy/housing/cmhc-tightens-mortgage-insurance-offerings/article18224612/#dashboard/follows/

#225 Smoking Man on 04.25.14 at 4:40 pm

A sure sign you’ve lost your mind….

You download Johnny Cash, you like it, and like it a lot….

The Ring of Fire… Yah…

A hemorrhoid mfgs should squize that into a commercial..

#226 T.O. Bubble Boy on 04.25.14 at 4:41 pm

BREAKING: CMHC pulls out of insurance on 2nd homes
http://www.theglobeandmail.com/report-on-business/economy/housing/cmhc-tightens-mortgage-insurance-offerings/article18224612/#dashboard/follows/

#227 T.O. Bubble Boy on 04.25.14 at 4:44 pm

Interesting: Canadian Mortgage Trends is saying that 2nd home mortgage insurance and stated-income mortgage insurance are < 3% of CMHC business.

#228 Aggregator on 04.25.14 at 5:16 pm

CMHC Changes Its Mortgage Insurance Product Offering

CMHC is discontinuing its Second Home and Self-Employed Without 3rd Party Income Validation mortgage insurance products effective May 30, 2014. Self-employed Canadians can still qualify for CMHC insured financing through CMHC homeowner products with a validation of their income using traditional methods.

What a bunch of muppets everybody is. Do you want to know why they always launched new rules in May, right at peak season? Because that way, brokers can sell sideline buyers with a "beat the deadline" pitch — just like every other time.

Nothing will change. CMHC risk based insurance coming soon. They just want to make sure there's a paper trail for any doc fraud so they don't get blamed.

#229 Linda Mulligan on 04.25.14 at 5:23 pm

LICO – low income cut off – which may allow one to access social assistance/welfare programs etc. – is currently set at $23,647 for a single person. Additional adults in a household bump that amount up between six to seven thousand per person. So the parents of #26 are receiving GIS because their combined household income falls below LICO for two adults. Interestingly enough, LICO for a family of 4 – 2 adults; 2 children – is set at only $30,487 (2011 amount as per StatsCan). Don’t see that logic, would think if an adult ‘add on’ is worth an extra six to seven thousand that any child would cost as much or more.

#230 espressobob on 04.25.14 at 5:26 pm

#222 Mark

How is going from a humble dishwasher to a chef or better yet, a restauranteur a short ladder? Most got there that way!

But then again most Canadians are so special and entitled!

#231 Bobby on 04.25.14 at 5:39 pm

For #23 Victoria Real Estate Update,

You are indeed correct. I’ve been looking at both houses and condos and many are just sitting on the market for ages. Many are also empty. The VREB published their numbers and use their new Frankenumber HPI index, which really means nothing. The reality is the median price is trending down.
Spoke to a renovator who said many of his clients cannot move as they are underwater so many are doing some upgrades in hope the market rebounds.
It’s getting ugly out there!

#232 shawn on 04.25.14 at 5:42 pm

CMHC no second Home insurance

Does this mean a homeowner with a CMHC mortgage can’t buy a new house with < 20% down payment until the first house is sold?

Was that really how it worked prior to 2005? (I suspect they allowed two houses at once in a purchase and then sell situation)

This need to sell first could be a BIG deal, no? (More pressure to sell fast, less ability to buy fast)

#233 KommyKim on 04.25.14 at 5:44 pm

RE: #208 Bank Of Canada on 04.25.14 at 2:23 pm
CTV just quoted Oliver saying no rates hikes until 206-2017. After that, he said expect very little movement because of Canada’s Demographic challenge.
Translation: move money out of C$
This ship is going to the 50 cent dollar.

Oliver does not set rates, and he did not say that. — Garth

——

Yes, it was probably Poloz:

http://www.cbc.ca/news/business/stephen-poloz-says-low-interest-rates-may-be-here-to-stay-1.2621662

Poloz also said some stupid things like this about low interest rates:

“Does that mean that they’ll go out and borrow more? It could, but I really think that what we’re observing is a high level of self-responsibility through this,” he said.

“There’s all kinds of anecdotal evidence that people are choosing to buy less house than they qualify for because they don’t want to overextend themselves, that our banks are underwriting very carefully — making sure that people can service their debt even if interest rates go up before they renew.”

#234 Aggregator on 04.25.14 at 5:44 pm

Brookfield RPS quietly launches new home price index for Canadian cities Link

No sales data, no average listing price, no SP/LP ratio…nada. It's the same old frankenumbers made to smooth volatility and baffle buyers with more BS.

#235 Ry YYZ on 04.25.14 at 7:24 pm

#223 Linda Mulligan on 04.25.14 at 4:27 pm

Not a particular dollar amount, more to do with the level of payout vs the amount paid in, and for how long. When I see teachers being able to retire after 25 years with a pension that pays something like 70 or 80 % of their best (last few) earning years of their already overinflated pay scale, guaranteed by us regular schmoes who will never see anything like that, it tend to get me a little upset.

#236 smart cookie on 04.25.14 at 7:35 pm

Multiculture a non culture ?
That was the argument recently in Van city between residents.
What say you to this ?

#237 neutral guy on 04.25.14 at 7:38 pm

Just walked by cibc and what do i see ????????
Get a great mortgage rate today and put $5000 in your pocket…..good grief.

#238 neutral guy on 04.25.14 at 7:44 pm

17 biggest RE bubbles in the world
Guess which one is the biggest one, as in number 1.

https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0CDwQFjAC&url=http%3A%2F%2Fwww.washingtonpost.com%2Fblogs%2Fwonkblog%2Fwp%2F2013%2F12%2F02%2Fthese-18-countries-may-have-housing-bubbles-if-they-pop-god-help-us-all%2F&ei=OfJaU56OCMqAygGkk4GQAQ&usg=AFQjCNGwkfrwE311YeSyOt4taeDPoeowSA&sig2=pCU_am_H4ItTlvjM2EG0Ww

#239 Linda Mulligan on 04.26.14 at 12:32 am

#235 – have you got any proof to back up your figures? I myself have a DB plan (for now) & after contributing to it for over 30 years will potentially receive at best about 50% of current earnings. I’ve been told the plan I am in is ‘one of the better plans’ so if teachers are getting 70-80% of their current earnings after only 25 years their plan must be truly stellar.

#240 Waterloo Resident on 04.26.14 at 5:35 am

Quote: (((“More people will retire in the next ten years than ever retired before in such a short period of time.”)))

WOW, LOOKS LIKE ITS GOING TO BE A FUN THING TO WATCH; PASS THE POPCORN.

#241 David Hawke on 04.26.14 at 10:00 am

@ #200 most any Central American country will be a lot more attractive place to retire than Canada, now or even better in 10 yrs time.

@ Linda #233 you should stick to commenting on subjects that you have knowledge about. Living in El Salvador I pay no taxes on my CPP/OAS income either to Canada nor El Salvador. Choosing a retirement country entails doing some research other than listening to uninformed fear-mongers.

#242 DMan on 04.26.14 at 11:27 pm

#140 – Curious, when you say that the Middle East is good for employment currently. Is this true for younger western expats arriving today?

#243 jc on 04.27.14 at 3:18 pm

#232 shawn on 04.25.14 at 5:42 pm

Agreed.

Along the same lines, what about the people who have insured mortgages on rental properties, and an insured mortgage on their personal residence? If they want to move, will they unable get mortgage insurance on their new primary residence?

There’s a few details that need to be flushed out here, like grandfathering, and primary residence, but some people could be squeezed big time.

I think it’s completely inappropriate for CMHC mortgage insurance to be subsidizing private business in the case of amateur landlords obtaining debt financing for far less than their risk profile warrants.

It’s hard to believe this was ever allowed to happen.

#244 jc on 04.27.14 at 3:35 pm

#192 Aj on 04.25.14 at 12:49 pm

I’m in a similar situation. Early 30s, with a DB. I have no expectation that there will actually be a DB plan for me in 30 years. Or at least, it will bear no resemblance to what’s currently in place.

I govern myself accordingly.