Sticky fingers

BOOMERS 2 modified

Over the weekend, while you were enjoying a normal life and not reading a financial blog run by a guy with a leg full of titanium and an alarming vocabulary, there was a wee debate here about seniors’ dole. It’s formally called OAS, or the Old Age Supplement.

Just because you haven’t yet croaked by the time you hit 65, you’re given money – $560 a month. For nothing. You don’t contribute directly to this fund, as with CPP, and it’s paid out of general tax revenues. In fact, this is the biggest bill the government pays in terms of social spending – about $40 billion this year, expected to rise to more than $100 billion annually in 2030, as the Boomers lap it up.

The OAS, obviously, is unsustainable. That’s why the feds are starting to pare it back. Anyone born after 1958 will have to wait two years longer to collect this pogey, and there’s little doubt future governments will hack it back further. There simply aren’t enough extra taxpayers in the queue to afford this kind of largesse to the old. Today 4.4 people pay for each retiree. In two decades that will shift bigtime – 2.5 people struggling to support each wrinkly.

Figure that out. Half as many working people to pay for three times the geezers. So if you’re 30 years old and think OAS is going to be there when you’re 65, you’re high.

OAS is means-tested, so poorer seniors get to keep more of it than rich ones. You start to see OAS clawed back when you make $72,000 a year. It’s all gone when your income hits $115,000. So most people keep most of it. The whole idea of OAS is that the government has an obligation to redistribute wealth, which will cushion the travails of old age for grasshoppers who never bothered to save and invest enough – by taking from those who did. Socialists think this is very fair. Capitalists and cowboys think it’s communism. But as the OAS burden mushrooms over the next decade it assures governments will go further in debt, or hike taxes. Or both.

In conclusion, there’s no doubt the Boomers will bankrupt this system. Yet no politician is even talking about it. Fortunately, because I’m no longer elected and don’t care what you think, I can state the obvious: this is welfare for old people. It is ageist, and with the demographic bulge called the Baby Boom, patently unfair to future generations now heading into an uncertain, quasi-deflationary and debt-infused future.

Worse, the more money the state gives to people, the less they’ll look after their own needs. That seems simple. So we have developed into a nation of souls who plow billions into make-nothing GICs and bank accounts, and borrow massively to buy houses because they seem safe. Most of the people you’ll run into this week give scant thought to their future incomes. In fact, the bulk of Canadians suppose they don’t have to save anything because they believe government will look after them.

My crime on the weekend was saying anyone who reaches 65, and needs $560 a month from the government to get by, has failed financially. In response, many people assumed I’m a heartless weenie and argued vociferously that they’re entitled to the cash just as much as to free liver transplants and CF-18s. But this proves my point. The more that’s offered by the state, the less personal responsibility people take. Maybe this is the world we now inhabit. But it will not be the one your kids retire into.

Now, imagine a possible scenario: oil stays cheap, the economy stutters, layoffs mount and we end up battling deflation for a few years. Real estate values flatline or decline, personal debt levels continue to rise, and the government finds it’s impossible to balance the budget. Meanwhile the number of 55-year-olds started to surpass the total of 15-year-olds two years ago. The average retirement age is just under 62. And there are nine million Boomers in this nation.

Perhaps you see my point. It’s a tough future unless people start feeling less entitled and more responsible.

Fortunately, building wealth ain’t that hard. As I’ve shown here, a balanced and diversified portfolio has averaged 7.4% over the last decade – which included the worst market meltdown since the 1930s. Even a preferred share ETF can pump out a 5% return, with 50% less tax than a savings account generates. Five grand put into a TFSA starting when you’re 30, making an average of 7%, becomes $744,500 by age 65. That on its own will generate $52,000 a year in tax-free, non-reportable income.

Is there risk here? You bet. But it sure beats waiting around to see what the government hands over. Especially when your parents are eating your lunch.

BOOMERS 1 modified

418 comments ↓

#1 1st Cracked Nut on 02.01.15 at 3:38 pm

Rock on.

#2 3rd Wheel on 02.01.15 at 3:42 pm

Millennials eat the Boomers – welcome to the future.

#3 Rock on on 02.01.15 at 3:43 pm

$100 billion a year will take down the titanic fer sure.

#4 CPG on 02.01.15 at 3:45 pm

Federal government pays businessman one of the largest settlements in Canadian history: report

http://news.nationalpost.com/2015/01/31/federal-government-pays-businessman-one-of-the-largest-settlements-in-canadian-history-report/

#5 Jimmy on 02.01.15 at 3:47 pm

Thanks for doing what you do.

#6 TFSA's Rock on 02.01.15 at 3:51 pm

Money fer nothing n yer chicks fer free.

#7 inter2 on 02.01.15 at 3:56 pm

Shouldn’t the government have planned ahead, knowing that the demographics showed that the baby boomers would be retiring with less taxpayers behind them? Why is this a surprise? What happened to all the tax money that the baby boomers paid the gov’t?

#8 TurnerNation on 02.01.15 at 3:57 pm

It’s Sticky Figures of course. In GTA.

I’ve run my model and it’s saying still that the bubble will not top until ‘Gartho’ goes for that beer with Smoking Man at Southside Johnny’s.

#9 Frustrated on 02.01.15 at 3:58 pm

I sent an email to Ottawa last year because I think the average family will be in trouble when it comes to retire. I would love to hear what you think of this idea. I sent an email saying we should bring back the 2 percent tax that they are saving Canadians and call it the people’s tax. Here is how it would work. Collect the 2 percent as a sales tax as they do, then when it comes to the time to do your taxes, divide that 2 percent evenly to all Canadians who file for taxes. Example would be the 2 percent collected would be half a million dollars, we have 100 thousand tax payers. So when it comes to tax time, everyone would automatically get 5,000 dollars. The reason I think this is good is a couple reasons. The average person will always get money back when it comes to tax time. The Canadian people will get the 2 percent from all people who tavel to Canada from the sales tax. The wealthy who spend 100,000 on a car, that 2 percent will go into the pool. I don’t see a down side and wanted to get your thought on it, even others on this blog and see what they think ?

#10 Here you go..there..there... on 02.01.15 at 4:02 pm

Tissues for the all the multigenerational whiners…..
Cheer up..someday you may have real troubles.

HYG

#11 The 1% on 02.01.15 at 4:03 pm

http://www.cbc.ca/news/business/richest-1-will-soon-own-50-of-all-wealth-oxfam-warns-1.2917564

One solution. Tax Dividends and Capital Cains at same rate as Income taxes.

Problem solved. But sheeple can be easily persuaded.

#12 I agree on 02.01.15 at 4:06 pm

Garth is entirely right. As an aging, mid-pack boomer myself, I see the struggles of young people every day. It is difficult for them to plan, to get established, and they generally appear to have a hefty debt load in part based upon fulfilling their own desires but in equal measure by the pressure put upon them by their parents.

One does not have to use to much imagination to understand the litany of owe (and woe) these youngsters hear from their parents: get a degree, get hitched, settle down, buy a house, and so on.

#13 JacqueShellacque on 02.01.15 at 4:06 pm

Thanks for the common sense, Garth. I’d love to see you tackle the coming Ontario pension plan as well. Squeezing middle class workers doesn’t seem like the greatest way to encourage people to save, yet one of the stated reasons for a pension plan in Ontario is that people don’t save enough.

#14 honeybooboo on 02.01.15 at 4:08 pm

I came, I saw, I’m 14th.

#15 It's nuts I tell ya on 02.01.15 at 4:08 pm

No wonder yer frustrated…

#16 TRT on 02.01.15 at 4:09 pm

Simple solution to the OAS ‘crisis’.

Get rid of the Guaranteed Income Supplement (GIS) for anyone outside the country for more than 60 days a year. Many are abusing this scheme as much of their wealth is outside the country and is never reported to CRA. But votes supersede everything it seems.

#17 gut check on 02.01.15 at 4:10 pm

My mother would fly into a narcissistic rage if she were to read this blog entry. guaranteed. (then she’d call her father to see if he passed away ’cause that’s where her next big cheque is going to come from)

#18 Never too old on 02.01.15 at 4:10 pm

Interesting NY Times article that suggests Europe’s deflationary crisis is a direct result of the austerity measures put in place after the housing & credit bubble in 07.
http://www.nytimes.com/2015/01/23/opinion/paul-krugman-much-too-responsible.html?_r=0

#19 honeybooboo on 02.01.15 at 4:11 pm

Anyone born after 1958 will have to wait two years longer to collect this pogey .
+++++++++++++++++++++++++++++++
Not exactly true. It will be scaled back over a six year period. Those born in 1965 will be the first to have to wait until they are 67 to collect OAS. I know, I’m one of them.

#20 Boomers used to rock on 02.01.15 at 4:20 pm

We’re gonna hit 500 comments fer sure today!

Is there a mobile version of this so the millennials can read it…

#21 Niclas Wrenlake on 02.01.15 at 4:22 pm

Well, if the Seniors get OAS, where do they spend that money? Right back into McDonalds and Tim Hortons, trinkets for their grandchildren and Loblaws to buy “personal items” ie Depends. That money gets pumped right back into the economy. The Seniors aren’t going to save this money if they haven’t saved before. Once a spender, always a spender!

#22 Jetfixer on 02.01.15 at 4:23 pm

Looks like the boomer parents will get something back from their kids!

What will likely happen? Taxes up for the young and they just keep dialing back the qualifying age? Leas than inflation adjustments? Or, at some point, will they just get rid of it?

If it’s up to me (i’m 30), and it is not going to be around when I am 65, then I don’t want to pay into it. Cut my taxes that little bit and I will save it. Of course, none of that is going to happen!

If the downturn in the economy and the housing market persists, and you have all these boomers try to cash out for retirement, that could be a scary prospect that might makes things a lot worse no?

#23 takla on 02.01.15 at 4:24 pm

re#19,, so my bro is born 06 1958,how much longer will he have to wait on this slideing scale?
Cant seem to find that info..

#24 Catalyst on 02.01.15 at 4:29 pm

The primary goal of politicians is to get re-elected. Np one will touch this with a 10,000 foot pole. It’s one of the main reasons government will do anything for inflation because it’s easier to devalue that promise than cut it.

Since your in such a fiesty mood, please post on the insane wages we pay teachers/cops/firefighters. They do important jobs but compared to American compensation the unions have gone overboard.

#25 1drs on 02.01.15 at 4:30 pm

The idea that the boomers would bankrupt the country has been in play for many years. The problem is the politicians who are in charge wish to be re-elected and the boomers hold most of the votes so , the politicians won’t say or do anything to get themselves un-elected. Thus we have disaster on the horizon . Sadly, this is when the financially unprepared will destroy the savers and the country at the same time. If they have enough voters to keep the debt party going taxes on the financially prepared will go up as country goes deeper in debt to fund the lifestyle of the indebted.
Which political party will step forward to commit political suicide to save the country ?
As far as I can see none of them are prepared to put that on their agenda.

#26 Incubus on 02.01.15 at 4:30 pm

“OAS is means-tested, so poorer seniors get to keep more of it than rich ones. You start to see OAS clawed back when you make $72,000 a year. It’s all gone when your income hits $115,000. ”

OAS should be cut starting at $20 000 and completely gone at $30 000.

#27 CPG on 02.01.15 at 4:31 pm

“On CIHI’s finding that the aging population is only increasing healthcare spending by 0.9% a year, that is because many of the services that should be available to seniors just aren’t,” says CMA president Chris Simpson. “Long-term care facilities aren’t being built, adequate home and community support isn’t being funded, and hospitals are filled with older Canadians who should be elsewhere but have no place to go.”

CIHI says spending on seniors healthcare will only increase incrementally over the next 20 years. But he notes that CIHI’s own figures also show per capita health spending increases dramatically as people age. Per capita costs for the 65 to 69 age group were $6,368 in 2012 but rise to $8,545 for those 70 to 79, $11,692 for 75 to 79, and $21,054 for 80 and older.

http://www.benefitscanada.com/news/health-spending-hits-slowest-growth-rate-since-1997-58748

#28 Sticky fingers | Realties.ca on 02.01.15 at 4:31 pm

[…] Source: http://www.greaterfool.ca/2015/02/01/sticky-fingers/ […]

#29 pinstripe on 02.01.15 at 4:32 pm

I would not dwell too much favouring the millennials. They are too dependent on their apps for direction and focus their mind on their iphone tweeting away. they will never vote during an election. If they do not care then why should I, as a senior, waste any time educating them.

As a senior it is mandatory to look after oneself. The government has promised me a lot of social benefits over the years and anytime I request that benefit the response is “you are not entitled to that benefit because of your income”. Why am I punished for being a responsible citizen?

Granted, I had to adjust my finances to prevent clawback on oas but I took a big hit not getting GIS. the TFSA was too little too late to add too much value to anyone my age.

As for starters, the government could grandfather anyone over 85 years of age and provide them with a one time opportunity to purchase 50 years of tfsa in one lump sum.

another starter would be to exempt anyone 85 years and over to be tax exempt from fed, prov, municipal, gst, hst, pst tax.

As a senior, the wife and I need 30 thousand to support our basic lifestyle. At my age one can of sardines lasts me for two full meals, whereas in my younger years two cans were mandatory for each meal. wife does not like sardines. We do not abuse what the government offers but I demand to have access to all the entitlements promised to me and wifey.

#30 TRT on 02.01.15 at 4:32 pm

The under 35 crowd won’t have a clue what no OAS in the future means. Most have been dumbed down by the ‘modernization’ of our public education system. You reap what you sow.

#31 getting old on 02.01.15 at 4:33 pm

3 million workers ‘will reject national pension scheme’
http://www.theguardian.com/money/2011/oct/20/workers-reject-national-pension-scheme

We should have options, we all know anything governments get there sticky fingers on is doomed before in gets off the ground.

#32 Linda on 02.01.15 at 4:36 pm

You can’t have it both ways, can you? If OAS is only given to those who pass a means test, the rather large percentage of Canadians who have no work related pension plan other than CPP & who have either never tried to or have been unable to save for their futures will benefit. Not that they’ll be living large – isn’t OAS around $6,765 or so before tax per year? Also you have to have lived in Canada at least 40 years between ages 18 & 65 to get the full amount. Those who migrate in & then collect due to turning 65 only get a percentage of the OAS based on the number of years lived in Canada.

So if one does qualify for full OAS plus full CPP at age 65 (not too many but some will) the combined amount of the two pensions will be just over $19,000 per annum before tax. Try living on that anywhere in Canada. GIS will be in your future for sure.

Note that the average CPP paid out to seniors is under $600 per month, due to 1) taking it early at age 60 & 2) not having paid into it for at least 39 out of 47 years between ages 18 to 65 & by the way, paid the maximum CPP for all of those 39 years AND did not take it prior to age 65. So if one presumes ‘most’ Canadians will get the ‘average’ CPP & to make the math easy say it is $600 per month. 600×12=$7,200, add OAS & your grand gross income if you have nothing else is less than $14,000 per year, before tax.

Given that something like 40% of Canadians approaching retirement have (as per surveys) no other pension plan or retirement savings & presuming that 40% are all of them boomers – 3.6 million if there are 9 million boomers – will be receiving at best some $19,000 per year before tax come age 65. More likely $14,000. This will not end well.

#33 For those about to flop... on 02.01.15 at 4:36 pm

Welcome to the STUPID BOWL.

Stephen Poloz is the RECEIVER who is looking for a soft landing.

Joe Olive is the RUNNING BACK who has dropped the ball.

Stephen Harper is the QUARTER BACK who needs to be sacked!

Also whilst these guys fumble the ball ,they expect all off us to keep a TIGHT END!

#34 Ben on 02.01.15 at 4:37 pm

Good post Garth. But let’s not just phase out pensioner bribes for those reaching 65. Let’s also cut the amount pensioners get right now.

Young people are facing an incredible transfer of wealth to older generations, through housing and benefits.

Time for a boomer+ haircut. Also crash housing.

None of this will happen because there is a symbiotic relationship between boomers and politicians. Politicians bribe the boomers for votes. Boomers bribe t he politicians for benefits and wealth transfer.

Let me just head off a bunch of posts about people fighting in the war or getting raised on potatoes. The bulk of boomers+ had only opportunity, peace and freedom. The young are missing 2 out of 3 at least.

#35 Pre-retiree on 02.01.15 at 4:38 pm

“Even a preferred share ETF can pump out a 5% return, with 50% less tax than a savings account generates.”

I am exploring this subject a little. I found out that there are many that think it may be better to hold preferred shares directly outside of an ETF (same argument could be made with bonds, I suppose). Excellent review on Raymond James website about what to look for, and what proportion of perpetuals, and rate resets to own. But…with a small portfolio, is it still feasible to have enough diversity without having an ETF? So, I am left pondering about this.
Anyhow, I still have to max my TFSA before I really tackle this issue since I am led to believe that preferred should be held in a non-registered account, due to the prospect of little capital gain, and tax-efficient dividends.
Would be happy to hear any opinion on this subject.

#36 HJD on 02.01.15 at 4:42 pm

Let’s not ignore the fact that “sticky fingers” include those on the grasping hands of beneficiaries of our rigged tax system. For a start, the government could prepare for its future OAS funding problem by starting to tax investment revenue using the same yardstick it applies to salaried employment. But of course that would be grossly unfair to the wealthy.

When not enough people invest in the economy already, why would you discourage it? — Garth

#37 Ray Skunk on 02.01.15 at 4:42 pm

Garth,

How would one go about claiming EI even though one is gainfully employed?

I’ve contributed into the pot for years, and I feel I’m entitled to it. I’m happy to structure my finances in a way that makes me look worse-off in order to claim my EI, even though I make more than enough money and don’t really need it.

While you’re at it, any tips on claiming disability benefits even though I’m perfectly able-bodied would be great too.

Cheers!

#38 Canned salmon for me. on 02.01.15 at 4:43 pm

They voted for Nenshi, or Spendshi if you prefer. They are going to vote for 2.0, bet yer bottom dollar.

GIS is for the genuine destitute. If ya want that too… well there ya go …. aren’t you a sweet piece of meat.

They are coming for you pinstripe.

The sardines bit was funny.

#39 Incubus on 02.01.15 at 4:43 pm

Canada in Recession, US Will Follow in 2015

Following the rate cut, the yield curve in Canada inverted out to three years. Inversion means near-term interest rates are higher than long-term rates.

Recession Has Arrived

There is no point in waiting for further data. The Canadian recession has already arrived.

US Will Follow

I remain amused by all the pundits who think the US has “decoupled” from the global economy and will grow stronger in 2015.

Here’s news: “It won’t”, just as China did not decouple from the global economy in 2008-2009 (a widely-held thesis I also knocked at the time).

http://globaleconomicanalysis.blogspot.com/2015/01/canada-in-recession-us-will-follow-in.html#xJLgdCzrjH0zdZBM.99

#40 Disappointed on 02.01.15 at 4:57 pm

“Worse, the more money the state gives to people, the less they’ll look after their own needs. ”

Sometimes, Garth… I wonder why you didn’t get along with Stephen. You seem to have more mercy for dogs than humans. Not that both aren’t deserving. But still..

Something to reflect on, perhaps.
http://i.imgur.com/a4lBf56.png

#41 Naughty aughties on 02.01.15 at 5:04 pm

And if I’m employed by whole life, why can’t I get an EI refund at 65?

#42 Waterloo Resident on 02.01.15 at 5:04 pm

The average person here at this blog earns over $150,000 per year = that is the ‘AVERAGE INCOME’ of Canadians these days
(some well over $500,000 per year as stated before on this blog),
and with that type of income they won’t have any problem saving up for retirement.

#43 Nemesis on 02.01.15 at 5:05 pm

#YouMakeAGrownManCry…

http://youtu.be/SGyOaCXr8Lw

#44 };-) aka Devil's Advocate on 02.01.15 at 5:06 pm

What about the aging wrinkles that die and millennials yet to enter the workforce, will that not skew it back to a more sustainable ratio? The mortality rates of the Boomers far exceeds that of the Millennials. There are, in fact, today more Millennials that there are Boomers. Add in that generation of taxpayers between the Boomers and the Millennials and you have a pretty strong tax base to support the OAS. I know it just as many of those Boomers have supported their Millennial children far longer than those Boomers parents ever did. I know it’s a bitch that the Millennials may be called upon to pays towards the OAS just as the Boomers were for their parents. How long does the average Millennial live at home before finally paying for their own crib? And what was the average for the Boomer generation? Just askin’.

#45 debtified on 02.01.15 at 5:11 pm

If you are currently not receiving OAS but it is part of your retirement plan, then you have not learned anything from this blog. If you get offended by this, then maybe you are reading the wrong blog. If you think the government owes you something when you retire (because you paid your taxes), then you will surely be disappointed. You do have one thing going for you – boomers are a force to be reckoned with on election day.

I pay my taxes, too. But I know one thing, I am responsible for my own future and I will surely not let the government, or the next generations, determine what that future will be like for me. This great country gives everyone that opportunity. This is coming from an immigrant who started with nothing.

Garth has been a great help in making sure I’ll be okay.

#46 KAC on 02.01.15 at 5:12 pm

#9 Frustrated’s idea sounded interesting to me, a reasonably fair solution.

Garth, you also appeared to present a relatively painless answer:

“Five grand put into a TFSA starting when you’re 30, making an average of 7%, becomes $744,500 by age 65. That on its own will generate $52,000 a year in tax-free, non-reportable income.”

That modest sum ($5K by age 30 could be achieved with a mere $500 per year tax between age 20 & 30. Less than that if the annual earnings are compounded.

I still think that an inheritance tax seems fair. What have younger folks done to deserve an inheritance? When my wife and I depart this mortal coil it would be okay with me if the government took all our assets as a death tax (or inheritance tax), although I would appreciate it if they left enough for my estate to pay for the marching bands and the cannon fire at our funerals.

As an old wrinkly, I took mild offence at your comment:
“Especially when your parents are eating your lunch.”

Ever since I was a spotty teenager I paid taxes to support the wrinkles who were around then. Government Pensions were a relatively new idea and most of that generation of old folks had never paid a nickel into the plan but were happy to collect.

And I was happy to pay, it never occurred to me to whine about paying for old folks who had not contributed, I assumed there was a risk that I might also be old one day, hence the pension plan appealed to me.

The idea of paying for preceding generations, plus paying taxes for your own retirement, and then being told the well is dry is the stuff revolutions are made of.

A compelling argument can be made for clawing back OAS from higher income earners, and we do. A slightly less compelling argument can be made for moving the clawback threshold lower, but beating up on old folks who receive below average incomes sounds cruel.

Even the smartest people can make poor investment choices and end up penniless in old age. Do we really want to have a generation of old folks living in even greater poverty than that which some now experience?

So young’uns, be careful what you wish for. And remember, that inheritance you are expecting might just depend, to some degree, on your parents not having to spend it all on subsistence living.

I’m old, gimmee, gimmee, gimmee.

#47 asp on 02.01.15 at 5:12 pm

Every penny of OAS gets spent. Spending in the economy has multiplier effects. Nothing gets flushed, we all benefit.

All of our salaries depend on someone else spending.

Economics 101. Back to school time?

#48 Trailer George on 02.01.15 at 5:12 pm

The sense of entitlement in this country is mind boggling. Whether 20 or 60 years old, the majority of the population thinks the government should always be there to manage their finances. The government is foolish for making borrowing money so easy for people that have none, but individuals need to take more responsibility for their financial actions. People are so quick to blame others and refuse to look in the mirror to recognize their own mistakes and contribution to this housing mess. if everyone wasn’t so willing to borrow to the max for houses they wouldn’t be inflated as they are today and we wouldn’t be in this housing debacle. I feel sorry for what’s coming to many but they did it to themselves.

#49 None on 02.01.15 at 5:13 pm

Garth, I agree that clawbacks starting at 72K is rediculous. Clawbacks should begin at 40K (in today’s dollars). Having old people living in abject poverty helps no one (except the cheap crap from china horny). Yes, boomers are jerks, they’ve been at the trough their entire lives but putting people on the streets isn’t the solution. Maybe we should privatize medicine while we’re at it.

You really surprised me with this one.

#50 ANON on 02.01.15 at 5:16 pm

Not giving us a rest, are you, Garth?
Here I am running like crazy to grab a home-brew from the fridge, throw some popcorn over the butter sizzling in the pan…Ok, words, numbers, words, ho-hum, you picked a winner: Pyramid schemes again. They are unexplainable, even if everybody’s right, they manage to end up in tears every single time. Someone, somewhere, should have already figured out what causes them by now. Not touching this with a 120ft pole.
Disclaimer: GenX.

#51 ANON on 02.01.15 at 5:17 pm

Not giving us a rest, are you, Garth?
Here I am running like crazy to grab a home-brew from the fridge, throw some popcorn over the butter sizzling in the pan…Ok, words, numbers, words, ho-hum, you picked a winner: Pyramid schemes again. They are unexplainable, even if everybody’s right, they manage to end up in tears every single time. Someone, somewhere, should have already figured out what causes them by now. Not touching this with a 120ft pole.
Disclaimer: GenX.

#52 mitzerboy aka queencity kid on 02.01.15 at 5:29 pm

boomers rule …. party on garth and dogz

#53 james on 02.01.15 at 5:34 pm

#40 Disappointed

Humans have greater cognitive abilities than dogs, such as the ability to contemplate and plan for the future. Toss your dog a leg of lamb and see how much planning goes into it.

There is a growing body of research suggesting that the less humans are required to think for themselves, the less intelligent and more complacent they are. For an example, there are experiments in Europe where they took out traffic lights and stop signs. Voila, the accident rate went down.

The fundamental idea of liberalism is that individuals can look after themselves. Most of you modern ‘liberals’ are actually some form of socialist or communist, because you believe that the state should employ, care for, educate (etc) its citizenry.

#54 Rexx Rock on 02.01.15 at 5:35 pm

One way the government can raise money for OAS.Have investigators catch the millions who don’t declare income.Here’s what they should do and its so easy.Many homeowners rent out room and board for ESL students at $700 a room and basement suites.Thats $2100 tax free a month and the homeowner is laughing,Anyone providing services through craigslist or kijji ie car repair,home renovations,escorts and so on.A 50% tax on all these kind of services.Enforce them with heavy fines and jail time.Billion are lost every year.Make them even pay back taxes on what they earned.

#55 Chrisoff on 02.01.15 at 5:36 pm

The combined age of The Rolling Stones is over 1,000 years old and they look twice that. For the record, rock died at least 15 years ago. The young now place it in the same category as Jazz, Blues, Classical and other similar former art forms.

#56 Whitey on 02.01.15 at 5:42 pm

Old Age Security (not “supplement”) is income tested, not means tested which is one reason tfsas are more attractive than rrsps. Anyone from the 99 % needs to understand this to properly plan for retirement on a modest income.

The Guaranteed Income Supplement (GIS)is a part of the program that in effect ensures that most Canadians make at least $1300 per month during retirement. The rules permit a person to be out of the country for up to 6 months per year and still collect this benefit so there are probably more than a few snowbirds and dual citizens living large on the backs of the populace. Basic OAS can be collected while living anywhere in the world and there is no 6 month residency requirement.

A person could have millions in assests but have a low enough “income” that they still qualify for the GIS, so it is important to be clear about means testing vs income testing. A switch to means testing would be more equitable if we are calling it “welfare” but once again would punish the responsible people and reward the profilgates. Welcome to Canada.

The cost of this program was 2.1 % of GDP in 2012 and is projected to reach a peak of 3.1% of GDP in 2030(Canadian Center for Policy Alternatives, aka pinkos).

#57 Mean Gene on 02.01.15 at 5:44 pm

Mandatory retirement was taken off the books decades ago, so no one really needs to retire, just work until you croak :-) Oh wait, that is starting to happen.

In the old days when there was mandatory retirement, people would plan for the end date, now, a lot of people piss around and think they can work as long as they want, however, reality comes to pay a visit (illness, disability, bollocks economy et cetera)

#58 crowdedelevatorfartz on 02.01.15 at 5:54 pm

@#32 Linda
The 14-19k per annum for CPP -OAS retirees is a good assessment. Tough to make ends meet on that annual amount..
My parents recieve govt employee inflation indexed pensions. They pay ALL their CPP-OAS contributions back in taxes due to their combined pension totals. The govt has had years and legions of actuaries to figure this one out….. taxpayers/pensioners pay it back if pensioner earns above a certain amount.
The ants pay taxes, the grasshoppers eat catfood.

#59 Whinepegger on 02.01.15 at 5:56 pm

@ #19 Honeybooboo
Anyone born after 1958 will have to wait two years longer to collect this pogey .
+++++++++++++++++++++++++++++++
Not exactly true. It will be scaled back over a six year period. Those born in 1965 will be the first to have to wait until they are 67 to collect OAS. I know, I’m one of them.

Not exactly correct. The first group of Boomers that will have to wait until age 67 to collect OAS are those born after Jan 31/1962.

http://www.servicecanada.gc.ca/eng/services/pensions/oas/changes/age/index.shtml

#60 crowdedelevatorfartz on 02.01.15 at 5:56 pm

@#54 Chrisoff
“The combined age of The Rolling Stones is over 1,000 years old…..
+++++++++++++++++++++++++++++++++++
Please tell me your not an accountant.

#61 Andrew Woburn on 02.01.15 at 5:57 pm

It’s fine to be indignant about all these old grifters who are leeching their OAS payments from the sturdy sons of toil with mouths to feed. Just remember that most of them were urban wage slaves who paid out 50% of their stagnant incomes to various levels of government and round 30% of the rest on living where they needed to be to just to have a job. Add the financial recklessness of raising two children and the notion of saving much for retirement went out the window. In other words, just like most working Canadians today.

The knock on OAS seems to be that it is a pay-as-you-go plan with the implication that current recipients haven’t paid their share and so younger people will be taxed more than their elders. On the other hand, the people who are supposed to know say the plan is just fine as is. “Canada can ride out the wave of retiring baby boomers and their cost to the Old Age Security program with room to spare, a new report by Parliament’s budget watchdog released Wednesday suggests.”

http://www.cbc.ca/news/politics/old-age-security-sustainable-says-budget-watchdog-1.1197116

The real danger to old age security is not the sticky fingered boomers but the coming implosion in jobs which will destroy the actuarial assumptions on which it was based. If people are this livid over elderly people getting help in their retirement after paying taxes all their lives, how are the Protestant work ethic hardliners going to deal with the hordes of permanent unemployables and career part-timers that lie just over the automation horizon?

#62 Mister Obvious on 02.01.15 at 5:58 pm

Well… none of this is my fault. I saved, invested and took financial risks all my life. I continue to do so to this day.

I will receive OAS in one year’s time. I’ve ready had notice from the federal government that it will be forthcoming with no specific action on my part.

I’m not saying I deserve it. I don’t claim that it’s my birthright as a Canadian. But I WILL take it. Think about it a moment… what would you do? Send it back?

I’ve structured my entire life to avoid hardship in my so-called ‘twilight years’. I made a plan and stuck to it. To paraphrase Kevin O’Leary, I “developed a healthy lifelong relationship with money”. I will be fine. And then I will pass away.

If they eventually ‘means test’ me and reclaim my OAS I’ll take it in stride because I am not one of those people Garth is accused of insulting for ending up dependent upon free money you expect to get just because you’re still alive.

I have never believed any future projection by our government about the kind of world we would inhabit in the 21st century. I never counted on lower taxes, guaranteed income, the right to meaningful work or universal access to health care.

Of course, those are very noble goals. But the politicians who promise them do not have a crystal ball. (If they had, they would have seen this oil thing coming a long way off). They will likely not even hold office by the time the populace is ready to collect on the future largess.

The biggest threat to the boomer generation is naivety.

#63 Larry1 on 02.01.15 at 6:01 pm

Meanwhile the number of 55-year-olds started to surpass the total of 15-year-olds two years ago. The average retirement age is just under 62. And there are nine million Boomers in this nation.

Seniors have more control over who gets elected – biggest demographic and more likely to vote. How dare anyone take their OAS and stay in power…

Garth, here’s one from Rosie – what you’ve been sayin’:

But remember that a house is just a big-ticket consumer durable item. It does not add to the productive capital stock of the economy.

–http://www.theglobeandmail.com/report-on-business/rob-magazine/invest-like-a-legend-david-rosenberg/article22638264/

#64 SWL1976 on 02.01.15 at 6:02 pm

Wow Garth, you really do want to light up the comments section.

I don’t always agree with what you say Garth, but think you are pretty bang on with this post. Baby boomers won the birth lottery of being born in the right time to enjoy the good life and make hay when the sun is shining. Some did, many didn’t.

Would I trade it all for what I have? Not a chance.

I knew from a young age that OAS would not be there for me when or if I become wrinkly. I know enough not to trust the governments, I have been lied to enough already. Come on whining about paying into a system and not getting a fair return… Well that is life these days. News flash we all do. Unless you don’t want to there’s always real welfare to ensure you don’t live to 65 or 67 or whatever age after they deem we get OAS by

I like the poit you make ‘It’s a tough future unless people start feeling less entitled and more responsible’

Lets face it it’s going to be a tough future no matter which way we slice it and I am preparing accordingly so I won’t be let down no matter which ding dong is running the country at the end of the year.

I know planning on OAS is not my plan. My plan is to earn the most I can and pay as little tax as I can. I know I support a broken down, greedy, crumbling system that is destin to fail and unrevel within my life time and finally… deep breath… I am fine with that, and that my friends feels good. I wasted too many years being upset about a supporting a broken system that I can do nothing about

I used to think… why doesn’t government fix the system… Then I realized that to them the system is not broken, but infact works perfectly… They are not fixing the problem they are the problem

Football is on… Time for the masses to get passoinate about something other than anything important.

#65 My House is my Friend on 02.01.15 at 6:04 pm

“Since your in such a fiesty mood, please post on the insane wages we pay teachers/cops/firefighters. They do important jobs but compared to American compensation the unions have gone overboard.”

Think of all the money we could save if we just got rid of all fire fighters and their halls. It would be a lot cheaper to let the houses burn down and just pay for new ones!

Lets get rid of UIC, after all these people are just too lazy to take any job. How about all the tax breaks the rich get, like the dividend tax credits!

#66 Sebee on 02.01.15 at 6:06 pm

So the CAD drop erased 60% of premium to US homes. Darn it, they get bailed out and saved each and every time. I no longer believe the day of reckoning is ever going to come for the debt piggies.

#67 Ralph Cramdown on 02.01.15 at 6:11 pm

Ninety years ago, Canada introduced means-tested welfare for wrinklies (the real thing, apparently, with a government worker asking how much land you owned and whether your family couldn’t look after you). Because we preferred it to watching some of ’em starve.

Later came OAS, which was originally universal. Muldoon added the means test (actually based on income, not assets) in 1989. If you’re old enough, you’ll remember how popular THAT was. Harper upped the start from 65, but not for current loud old folks, just for the young’uns who were too busy working to make much of a fuss. If we get rid of the program entirely, we’re just back to where we were 90 years ago, a situation that was considered unacceptable then.

Here’s what I know:
– Most people won’t start saving enough, early enough. When they’re older, they’ll wish they had.
– Their savings often go into poor investments: Bank accounts, their employers’ stock, longshot junior miners or tech plays, funds with high sales commissions and high fees.
– Even if they do everything right, they can’t afford to invest like a large pooled pension fund, which can always invest with a 50-100 year horizon, unlike a 60 or 70 year-old individual can.
– If we as a country continue to view our oil and minerals as the bounty of whoever’s living in the mining camp today, rather than a resource for future generations, we’ll have a boom-bust economy, unlike countries who limit inflation with taxes and sovereign wealth funds.
– Ironically, our economy does better with more grasshoppers and fewer ants. A higher savings rate, obviously, depresses current demand.
– Who am I kidding. We won’t learn from history. A coalition of rich people and the investment industry will keep explaining to us that liberalism/fiscal prudence means every dog for himself, and the Devil take the hindmost.

http://activehistory.ca/2012/11/a-short-historical-primer-on-canadas-old-age-security-debate/

#46 KAC — “The idea of paying for preceding generations, plus paying taxes for your own retirement, and then being told the well is dry is the stuff revolutions are made of.”

THAT is a point that many in power don’t seem to grasp until it’s too late. Witness Greece vs. Germany in the current semifinals, with Italy warming up to play the winner.

#68 Nemesis on 02.01.15 at 6:12 pm

#SmartDoggies… #PlanForAllContingencies…

http://youtu.be/YKLCAHVKb0w

#69 Mister Obvious on 02.01.15 at 6:14 pm

#54 Chrisoff

“The combined age of The Rolling Stones is over 1,000 years old and they look twice that.”
———————————–

Nonsense. They’re old but not that old.

There are four current members: (Mick Jagger, Keith Richards, Charlie Watts and Ronnie Wood).

There are four past members: (Brian Jones, Ian Stewart, Mick Taylor and Bill Wyman)

Jones and Stewart both died long ago, but even if you want to include all eight of them in the calculation and assign each member an average age of say, 72, You have a combined age of 576 years. It’s certainly not more than that, and probably less.

Shame on you. As a penalty for spreading misinformation you are assigned to research the exact value and report back to this blog.

#70 crossbordershopper on 02.01.15 at 6:16 pm

come to hamilton and i will show you thousands and thousands of little people who get oas, some cpp, and some get gis and some dont.
it is very very common in poor area’s to have seniors living on about 1500 a month, or so. most rent, some have their homes paid off and live very simply. They do because they are used to it, people had so so jobs, bounced around, factory closed, got sick, had deadbeat sons who pick pocket them etc. and here you are a very large amount of poor, to lower middle class people. low income is common in canada.
preferred share etf for dividend tax credits, like really? its such a small percentage of population that know the difference between live stock or preferred stock.
i can solve the problem though, because i can tell you first hand of many people in this position that do get a cheque that they shouldnt.
the gis is income based, not asset based, simply have an asset base, if you got some money or a house, you dont need that little extra from the goverment. its not that complicated and most people would agree.
i know a guy who lives on 1500 month, gis oas gst credit etc, he is a millionaire, house 400k paid, cottage 200k paid, house in croatia 100K, GIC 200k making no interest. and woola a poor millionaire, a know quite a few.

#71 Sue on 02.01.15 at 6:23 pm

Thanks for addressing this, Mr. T. Very interesting thoughts and comments. Some changes are needed to sustain a program that is affordable to the economy but still keeps the old folk from eating cat food (unless they want to).

We had better hope that we have an NDP-flavoured federal government in the future. They are probably the only people who can do anything about such entitlements. If a Conservative government tried to do anything like this the wailing and gnashing of teeth would be deafening…

#72 honeybooboo on 02.01.15 at 6:26 pm

#45 debtified on 02.01.15 at 5:11 pm
If you are currently not receiving OAS but it is part of your retirement plan, then you have not learned anything from this blog. If you get offended by this, then maybe you are reading the wrong blog. If you think the government owes you something when you retire (because you paid your taxes), then you will surely be disappointed. You do have one thing going for you – boomers are a force to be reckoned with on election day.
++++++++++++++++++++++++++++
Sounds like you have a DB pension

#73 not 1st on 02.01.15 at 6:31 pm

The boomers and fossils are the only ones still stupid enough to vote so they won’t be forgot.

Expect TFSAs to be taxed to pay for the geriatrics roaming the country in about a decade.

Millennials on the other hand are actively dis-engaging from the system and deflation will be the result.

Disruptive change is a b*tch

#74 Ontario's Left Coast on 02.01.15 at 6:38 pm

Worth tonight’s tune-in just to see that shot of Mick and the boys! My top five favorite Stones’ songs:
– Gimme Shelter
– Honkey Tonk Woman
– Beast of Burden
– Under My Thumb
– I’m Just Waiting on a Friend

Cheers dogs and have a great week!

#75 honeybooboo on 02.01.15 at 6:42 pm

#58 Whinepegger on 02.01.15 at 5:56 pm
@ #19 Honeybooboo
Not exactly correct. The first group of Boomers that will have to wait until age 67 to collect OAS are those born after Jan 31/1962.

http://www.servicecanada.gc.ca/eng/services/pensions/oas/changes/age/index.shtml
++++++++++++++++++++++++
thanks for that

#76 Ken Nash on 02.01.15 at 6:45 pm

I think it would be simpler if oldies just went back to work to age 75 or 80.

True story. After High School, in the mid 70s, worked for two years in a union job. Shop Stewart said “Union meeting tonight on discrimination in the work place you should come.” I did. It was an inspiring night. Guys who had been threw a depression, a war and worked all their lives got up to say the same thing. “I turn 65 next year, I’m healthy and I’d like to continue working.” At least a dozen spoke on their right to work.

Our local, which had big bucks btw at Lever Brothers, voted to put union money into changing mandatory retirement. The intent was obvious to increase working years for those who wanted to continue working.

The battle was won. But really the noble intent of work ethic was lost.

The Public Service and Teacher’s Unions said workers are entitled to retire earlier than 65! wth? What a messed up, self entitled country Canada has turned into.

It’s not the place I remember growing up in Scarborough in the 70s. Back then Canadians didn’t need to be asked, “Do what’s best for your country not yourself.” I despise Boomer pandering politicians…………….. whatever

#77 Uh Oh Canada on 02.01.15 at 6:45 pm

#54 Chrisoff

It’s a shame that all the real music died. The new generation is used to the noise pollution they call music. I feel sorry for them. They’re also wasting their lives away on idevices eternally connected to social networking sights.

Nothing’s real anymore.

#78 Calgary Retiree on 02.01.15 at 6:48 pm

Garth’s comments on Friday pissed me off plenty, and I am not surprised to see him double down today.

The notion that everyone can provide for their old age is an ideological fallacy. Or system of free market capitalism, while superior to other economic models, makes for a very uneven income distribution. Those who do not have the ability or circumstance to provide completely or even partially for their old age are plenty. They are not losers! I don’t have any problem in contributing a portion of my taxes to that cause. Whether this comes from a separate fund or general revenue is irrelevant.

All Western developed countries provide for their seniors in some way. Without it we revert back to the old days when seniors needed to be taken care of by their kids – provided they had any – and the kids were willing and able to look after them. Charity was the final option.

The argument that we can’t afford it is conservative ideological nonsense. When the Harperites increased the OAS age awhile ago plenty of economist pointed out that the age 65 OAS commencement date was economically very manageable. Of course, the affordability argument is just a conservative smoke screen. The real issue is ideology. Apparently, conservatives would rather see our elderly rot in the gutter rather then give a nickel of their precious taxes toward the financial independence of our seniors.

Of course, OAS can be improved. Currently a couple can make $140k jointly before the claw-back even starts. This is ridiculous, and likely an example of conservatives looking after their own. Lowering the claw-back threshold by 30% would be perfectly acceptable and the money saved can be added to the OAS or GIS of those in need. Note that proposals for CPP changes have all be rejected by the feds.

Some people may be lucky and financially survive job loss, wage and pension cuts, market crashes, zero interest rates and scumbag lying governments (think Income Trusts!). Good for them, and I’m one of those. But it is galling to read some fat cat blogger, who apparently carries a fortune of titanium around in his leg, vilifying and insulting our seniors because it fits his mistaken ideology.

Unfortunate that you cannot make an argument without descending to an insult. — Garth

#79 Tron on 02.01.15 at 6:51 pm

I am what might be called a socialist, but also believe in personal responsibility. I think OAS does have role to provide replacement income for those at the lower income thresholds that don’t make enough to save/invest and are destined to become burdens on society anyway.
Gov’t should also force savings through an expanded CPP.
But whats most annoying to a 30-something like myself saving 20% of my income for retirement is the sense of entitlement for baby boomers who were lucky enough to live through the golden age of capitalism. Mark Blyth had a great letter to the FT in 2010 responding to the boomer generation:
http://www.ft.com/cms/s/0/a586e97e-b557-11df-9af8-00144feabdc0.html#axzz3QXIO4run

#80 Leo Tolstoy on 02.01.15 at 6:53 pm

#37 Ray Skunk on 02.01.15 at 4:42 pm
Garth,

How would one go about claiming EI even though one is gainfully employed?

I’ve contributed into the pot for years, and I feel I’m entitled to it. I’m happy to structure my finances in a way that makes me look worse-off in order to claim my EI, even though I make more than enough money and don’t really need it.

While you’re at it, any tips on claiming disability benefits even though I’m perfectly able-bodied would be great too.

For EI simply contact an employment lawyer every 3-5 years to write a letter for a structured wrongful dismissal. Then take your next year off.

For disability benefits, during your 3-5 years of employment, visit a physician regularly and a psychologist (covered by most employer health benefit plans; and if not, seek those covered by your provincial health insurance). Establish a history of depression. During 3rd or 5th year, go on paid leave.

Combine the two (disability first and then EI second) for a long paid time off.

Seen it done by others already.

#81 Assumption on 02.01.15 at 6:53 pm

Garth, I understand 7% return on balanced portfolio looking back. I also understand that you are relatively sure getting such return on balanced portfolio going forward is feasible.
Could I ask you to share you rates of return assumptions for various asset classes going forward?
Fixed income -?, Canadian equities -?, US equities – ? and international equities – ?.

No. The point of holding multiple asset classes in a reasonable weighting is that nobody can answer such a question. — Garth

#82 Sugar Bear: Take me back. MomaJune! on 02.01.15 at 6:55 pm

Open House Calgary

On a walk we stopped by an open house in SE Calgary today. The Realtor stated we be nuts to buy now. An avalanche of listings is happening. He says folks are still delusional for their asking price. He described perfectly the consumer behavior when deflation sets in. Why buy, if you think the price will be less in the future.

The was surprised how straight forward he was. I seen his bus stop sign over the past 15 years. He has been selling in the area for a long time. I was even more shocked to hear that our renting for a past few years was a good idea.

Must be an off day or the kool aid pitcher ran out for the Realtor to talk like this.

#83 debtified on 02.01.15 at 6:56 pm

#71 honeybooboo on 02.01.15 at 6:26 pm

Sounds like you have a DB pension
***********************************************

Nope. And I have nothing against those with DB pension. Good on them.

I have worked for 20 years in this great country, practically as soon as I got off that plane that brought me here. My first job was at a fast food where I had to travel 1.5 hours (3 buses) one way to work a 3-hr lunch shift. My second job was at another fast food where I worked my way up as the closing supervisor. Sometimes, I had to ride my bicycle at 2AM in the middle of winter to get home because there were no more buses and I couldn’t afford to buy a car.

I finally found a job 6 years ago that offer defined contributions and I am very grateful for the company’s contribution. I never considered it to be their job to worry about my savings and my future so I consider their contributions to be above and beyond.

I have no debt. I rent the house I comfortably live in. My net asset (including real estate) is closing in on a major milestone in value. I follow Garth’s rule of 90. Highly liquid and diversified. I own a sail boat. I love nature and I travel extensively (almost one country for every year I am in this world). I value experience more than properties.

It’s not what you earn. It’s how you spend. I know people who are like me. That is why I never understand it when other people complain about entitlements (or lack thereof).

#84 April on 02.01.15 at 6:56 pm

I am entertained that the picture for this Hate-The-Lazy-Boomers post is of three boomers who have been a wealth-generating force for a lot of people, perhaps an entire nation. Selfish and perverse, maybe. Lazy and unproductive, no.

#85 Millenials >me on 02.01.15 at 7:01 pm

I’m sure he’ll refund the titanium at the end.. it’s only borrowed. We know he doesn’t like metals.

#86 Lillooet, BC on 02.01.15 at 7:03 pm

Yes, Garth, I agree, there is a growing divide between the Boomers and everyone else.

“You start to see OAS clawed back when you make $72,000 a year. It’s all gone when your income hits $115,000.”

Why not start clawing back OAS after $25,000 and eliminate it after $35,000? Because many more wrinkly Boomers vote than basement-dwelling Millenials and Harper knows how to play the odds.

#87 Ret on 02.01.15 at 7:08 pm

#53 -Undeclared student room income

Lots of undeclared income from student rooms around McMaster U. This has gone on for decades. Some of these student slumlords have 4-10 properties with 6-9 rooms in each property.

You would think that when a kid gets handed a $10,000 Canada Student Loan, someone might ask for a SIN number and address of who they will be paying the $4000 in rent (for the year) to.

CRA gets more glee from harassing honest taxpayers over clerical errors than taking on real tax cheaters.

#88 Vanecdotal on 02.01.15 at 7:08 pm

#60 Andrew Woburn

“…how are the Protestant work ethic hardliners going to deal with the hordes of permanent unemployables and career part-timers that lie just over the automation horizon?”

+1

Well said. Automation (and next, AI) is already right now, rapidly replacing millions of workers, globally as we speak. Fast forward 10-20 years and how will all these additional humans (our kids, grand kids) find enough work to feed and house their families, much less prosper? Meanwhile world population keeps increasing yoy for the forseable future. Hmmmm… serfs / feifdoms anyone? Fascism? Socialism? Communism? Capitalism? Conservatism? So far none of these are working well, if at all. Some better than others, others have proven disastrous. Maybe it’s time to try something new, whatever THAT may be?

Going forward we need a completely new form of collaborative government at every level, neither “left nor “right” in the archaic sense, who is actually capable of planning more than 4 years ahead (past getting re-elected) if we want move towards a more peaceful, balanced, and equitable future as a species imho. There in lies the conundrum. I fear “Idiocracy The Movie” is unfolding as we speak. “Wait – no, that goes in the OTHER end”… sigh.

#89 Smartalox on 02.01.15 at 7:08 pm

Correct me if I’m wrong, but as I understand it, income from a TFSA is NOT counted towards the clawback limits for OAS.

So if your TFSA provides you with tax free income, that income is not considered toward the $72k at which OAS is clawed back. The reason for this is that if your income is not taxable, the government has no way to count it.

Pension income, however is fully taxable. That’s how we’re going to get our revenge on all those with gold plated defined benefit pensions: they’ll pay the taxes while the rest of us plump up our TFSAs and fly under the radar as we collect fat, tax free income cheques, CPP, OAS, and if you can, GIS.

And who do we have to thank for making all this possible?

Thanks, GT!

#90 Joe Smith on 02.01.15 at 7:08 pm

I was just reading my great grandfather’s manuscript. He was born in 1879. Sounds like interest in England back then was 5%. That was it, 5%, and it didn’t change.
In the Canadian West settlers paid 7% mortgages because they were considered a higher risk. Didn’t sound like rates went up or down at all.

#91 Roland on 02.01.15 at 7:11 pm

There are a number of pretty serious factual errors and logical fallacies in this piece, Garth.

1. Most people do indeed pay into OAS, because most people pay taxes.

2. OAS is not really ageist because it is not a one-time transfer of wealth from one cohort to another. The great majority of Canadians can expect to live past age 65/67 and will thus both into the system in taxes, and collect as seniors.

3. The cost of OAS is less than the cost of the preferential tax treatment given to certain kinds of income, e.g. dividends, capital gains.

Garth, you should remember that every wage-earner in the country is heavily subsidizing your preferred ways of getting unearned income. However, to paraphrase a lot of investment ads, “present political systems might not resemble future political systems.”

#92 John on 02.01.15 at 7:11 pm

“Unfortunate that you cannot make an argument without descending to an insult. — Garth”

Geez…talk about calling the kettle black

#93 Flying circus on 02.01.15 at 7:13 pm

No way today’s post doesn’t end up here..

https://www.youtube.com/watch?v=Xe1a1wHxTyo

#94 Cici on 02.01.15 at 7:16 pm

I agree with everything here, well almost…OAS should not be done away with, but rather limited to people in dire need who for health reasons were able to remain actively employed.

Also, the picture at the bottom is funny, but not 100% true. Gen Xers and Millenials have helped priced themselves out of the market by agreeing to bid up poor-quality houses and take on enormous debt. Of course, policy is a big part of that problem, but some responsibility should be shouldered by those who are actively participating in their demise.

#95 NoName on 02.01.15 at 7:16 pm

interesting read

http://www.nytimes.com/2015/01/26/nyregion/to-collect-debts-nursing-home-seizing-control-over-patients.html

#96 Goldie on 02.01.15 at 7:16 pm

That’s a very unfair picture. Most of those older folk are not house flippers. Many of them have owned the same house through the entire boom. Speculators, foreigners, and the young fools are just as much to blame, perhaps even more so.

#97 Cici on 02.01.15 at 7:16 pm

Oops, meant “who were NOT able…”

#98 Calgary Retiree on 02.01.15 at 7:17 pm

“Unfortunate that you cannot make an argument without descending to an insult. — Garth”

Really? I was called an “Old retired snort”, a “wrinkly”, who should be ashamed to be on govt dole and who failed to prepare. You fail to see the insult? Consider my response on behalf of all who collect OAS.

I think my comment about you carrying some of your net worth in you leg is pretty funny though. Admit it.

#99 Randy on 02.01.15 at 7:18 pm

Since reality, common sense and fundamentals mean nothing anymore…I don’t give a crap.

#100 GeorgeSoonToBeRetired on 02.01.15 at 7:27 pm

Sorry Garth, when you are in a hole, the best thing to do is stop digging.

Or as Ronald Reagan once said, “if you’re explaining, you’re losing”.

Your commentary really has blinders on it this weekend, I am afraid.

You ignore all the ways the footballs are deflated to help the few.

What about all the other perverse tax incentives that have only helped create the 1%? Why focus on the OAS using the same old, same old, neoconservative narrative?

Capital gains on shares, particularly for execs and others who get them as part of a job package? Tax them fully as income.

For that matter, there is excellent evidence that there is absolutely, unequivocally no correlation whatsoever between executive compensation and company performance. None.

So tax top earners like we used to, like that great communist Dwight Eisenhower who built a middle class we can now only dream of.

Your company hires TFWs? Fine. Your tax rate is doubled. Maybe tripled.

You flip properties without declaring the income? Tax them at 100% plus penalties. Plus all the other scams people try.

Take out the incentives for the few in our system, and most problems go away. Be assured the non-Harper parties will be offering this and more, in elections to come.

Garth, I can’t figure whether you just don’t grasp the bigger picture, or just don’t care that your comments are just more of the narrative that has lead to this downward spiral and the creation of huge wealth disparities.

Change the lens on your camera, my friend.

You need wide angle.

And take off all the filters. They’re clouding your view.

#101 Macrath on 02.01.15 at 7:29 pm

#35 Pre-retiree

Would be happy to hear any opinion on this subject.
____________________________________________

http://www.cbsnews.com/news/why-you-should-avoid-preferred-stocks/

#102 charles on 02.01.15 at 7:33 pm

Hope the windows in that office tower open.

#103 West Coast on 02.01.15 at 7:41 pm

Having a grumpy day are we Garth?? As KAC #46 says, ‘Even the smartest people can make poor investment choices and end up penniless in old age.’
NOTHING is guaranteed.
Obviously you have done well and will not be collecting OAS. Bravo. It certainly helps to be born with a silver spoon in your mouth. Think carefully about the numerous advantages you were granted in your youth (schooling, connections etc.), your obvious intelligence and formidable energy and be grateful rather than miserly. It doesn’t suit you.

#104 Freedom First on 02.01.15 at 7:44 pm

Interesting Post today.

Regardless of the ageism and generational warfare happening today, 1 message comes very clear to me. It is very very important to look after yourself in every way. Takes discipline in every area of ones life. I have been fortunate and blessed following 3 simple guides. 1) Karma. 2) look after myself. 3) help others.

Best to focus on what I am doing, and not what others are doing or not doing. As always, my freedom first, from everything. I enjoy living out of control, and in a very good way. Peace all.

#105 Cow Man on 02.01.15 at 7:44 pm

Sir Garth:

You are totally correct in all that you say here. Especially the part that such a stance would never get you elected.

#106 Ralph Cramdown on 02.01.15 at 7:47 pm

#83 April — “I am entertained that the picture for this Hate-The-Lazy-Boomers post is of three boomers who have been a wealth-generating force for a lot of people, perhaps an entire nation.”

Oh yeah, I’ve been a fan since “Tax Exile on the Damrak.”

The Rolling Stones have paid just 1.6 per cent tax on their earnings of £242million over the past 20 years, it has emerged.http://www.dailymail.co.uk/tvshowbiz/article-398648/Stingy-Stones-avoid-tax–163-240m-fortune.html

#107 Bruce on 02.01.15 at 7:51 pm

Gee you make it sound like I shouldn’t collect the OAS next Aug. because I’m turning 65. Well FYI, my Canada Post Pension will be reduced by roughly the $560 OAS so I won’t be getting any further ahead. As well, while I was working for 40 years, the Liberals (in power for most of the time) didn’t really care to look down the road and see this problem happening. PISS POOR PLANNING is why the Gov’t doesn’t have the $$$$. Just kick the can down the road and leave it to future generations to solve. No political party will ever have the stones to address this issue. So I won’t feel too guilty about collecting the OAS that I PAID MY TAXES FOR 40 YEARS to have. I can’t help it if useless politicians pissed it all away on stupidity. BTW just a curious question, does the Pension Plan for federal politicians permit the collection of their pension + OAS, because mine doesn’t. Mine is reduced, to eliminate the double dip.

#108 Next up - banked sick leave on 02.01.15 at 7:53 pm

Yeah baby….. gorge gorge gorge.. can you collect OAS while on sick leave? inquiring minds need to know

http://www.calgaryherald.com/business/energy/Public+servants+have+million+days+banked+sick+leave/10778720/story.html

#109 RayofLight on 02.01.15 at 7:54 pm

I am a retired engineer, and have tried to be responsible for myself and family. We did not live lavishly; instead I started early investing in RRSPs, TFSAs and teaching myself how to invest. I resent having to support Boomers who never took the time to even think about the future, which lived large, and accumulated huge debts. I resent having to support those gadflies who still don’t understand what the problem is. (I have to keep reminding myself to mind my own business, because I get so pissed when I start to think about the financial idiots who never gave a $hit )

#110 kothar on 02.01.15 at 7:57 pm

I have to laugh at Money Sense magazine I got in mail. In it there was a debate on what was better Mutual funds or ETF’s. Another debate was TFSA vs RRSP. Two tenants came down, a)your current income b)FUTURE TAX RATE IN RETIREMENT WILL BE LOWER. Overall the RRSP in that scenario won out over TFSA, only those making 30k or less would benefit from RRSP they said. I can 100% gurantee that tax bracketts for retirees in the future will be higher than now and that RRSP will be a tax bomb.

#111 Slip sliding away on 02.01.15 at 7:58 pm

We’re taking you all down… addicted to the transfer payments are ya.. looooong slide

http://www.theglobeandmail.com/report-on-business/albertas-real-estate-woes-threaten-the-rest-of-the-country/article22739292/

https://www.youtube.com/watch?v=5_H-LY4Jb2M&list=RD5_H-LY4Jb2M&index=1

#112 NetCentric on 02.01.15 at 7:59 pm

Well, Ayn Rand ain’t got nothin’ on you does she? Sure your facts are correct but blaming people who are not the cause is just mean spirited and smacks of logical fallacies.

Then again I suppose you’re just doing what everybody else, including trolls like Ann Coulter, in this age does to get attention.

Disappointing though Garth.

#113 Here there on 02.01.15 at 8:07 pm

Oh Garth, stop trying, you won’t be able to beat Julian for a chance to be a poster child for consciensus objector societies or pro-choice groups. It is futile. And comments backlash could be very hard. Akin, as if trying to save city hall some money, by suggesting to stop the practice of city garbage men (sorry, sanitation engineers) picking up garbage containers from Rosedale’s home backyards. Aka, like washing that wealthy proprietors’ derrières with rose water.

#114 David on 02.01.15 at 8:07 pm

Amazing how fast bad news spreads.

http://wolfstreet.com/2015/02/01/oil-bust-socks-it-to-canada-job-losses-pile-up-housing-bubble-banks-at-risk/

#115 David on 02.01.15 at 8:07 pm

Amazing how fast bad news spreads.

http://wolfstreet.com/2015/02/01/oil-bust-socks-it-to-canada-job-losses-pile-up-housing-bubble-banks-at-risk/

#116 dogman01 on 02.01.15 at 8:09 pm

87 Vanecdotal on 02.01.15 at 7:08 pm

Just read ” Our Final Invention

Crazy stuff.

http://www.amazon.ca/Our-Final-Invention-Artificial-Intelligence/dp/0312622376

Been in IT 15+ years; this stuff is coming. Already Robo-Advisors are near horizon reality.
Scary when code can replace the economic value of your labour – by labour It no longer just means physical work.

http://www.theglobeandmail.com/globe-investor/funds-and-etfs/etfs/robo-advisers-have-arrived-and-may-be-just-what-your-portfolio-needs/article20585868/?page=all

I do not understand where people will work in the future. Healthcare?

I do not know whose quote this is but:

“At times like the present, when the evils of unsound finance threaten us, the speculator may anticipate a harvest gathered from the misfortune of others, the capitalist may protect himself by hoarding or may even find profit in the fluctuations of values; but the wage earner – the first to be injured by a depreciated currency – is practically defenseless. He relies for work upon the ventures of confident and contented capital. This failing him, his condition is without alleviation, for he can neither prey on the misfortunes of others nor hoard his labour.”

#117 Be happy on 02.01.15 at 8:12 pm

https://www.youtube.com/watch?v=wvUQcnfwUUM

#118 Mr. Happy on 02.01.15 at 8:14 pm

https://www.youtube.com/watch?v=E2VCwBzGdPM

#119 Brew on 02.01.15 at 8:14 pm

@86 RET

“You would think that when a kid gets handed a $10,000 Canada Student Loan, someone might ask for a SIN number and address of who they will be paying the $4000 in rent (for the year) to.”

————————

Provided that info to CRA for my Mac U daughter last year. They asked for it.

#120 Chrisoff on 02.01.15 at 8:15 pm

#76 Uh Oh Canada

Na, EDM music is as good as anything that has come before it or that will follow it. Musicians don’t get better or worse in different generations… And everyone thinks theirs was best… And they don’t make them like they used to. People just get old and most people’s neural pathways harden after a while.

#121 Help for the Boomers on 02.01.15 at 8:18 pm

https://www.youtube.com/watch?v=bRzKUVjHkGk

#122 rory on 02.01.15 at 8:18 pm

OAS is just one part of this discussion. Public service pensions and benefits are what is going to kill us…just sayin’.

Where is the real discussion about this. All I ever get is angry union denials or crickets whenever it is mentioned.

#123 Daisy Mae on 02.01.15 at 8:21 pm

21 Niclas Wrenlake: “Well, if the Seniors get OAS, where do they spend that money….pumped right back into the economy.”

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

This is true. And a good point.

The governments — all levels — can lead by example.

#124 Mean Gene on 02.01.15 at 8:23 pm

CPP maximum pensionable earnings for 2015 is $53, 600, this figure is based on the average industrial wage.

Therefore, it would seem reasonable to start the OAS claw back in line with the CPP figure.

Oh yeah, CPP replaces only %25 of the pre retirement earnings (Industrial wage)

#125 DisgustMadeMePost on 02.01.15 at 8:25 pm

#29 pinstripe on 02.01.15 at 4:32 pm

So does that mean since you expected to get money from the government (other canadian citizens… Including your own kids/ grand kids ) that you CHOSE not to organize your own finances for your retirement years? Telling in itself. Did you live well? Did you live irresponsibly? Do you also need the rest of us to subsidize your cardiologist? Just wondering.
If you’re ok financially and STILL want other Canadians to work to pad your bank account, you’re coming off as a greedy jerk.

Times have changed. It’s not the 50’s or 60’s anymore … Where a family could live on dad’s pay cheque alone. Changes have to be made and you or me might have to EXPECT less of our fellow Canadians’.

#126 Daisy Mae on 02.01.15 at 8:26 pm

#24 Catalyst: “Since your in such a fiesty mood…”

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

Aren’t we all? There’s no easy/quick fix and this debate will go on….f o r e v e r.

#127 Bill Gable on 02.01.15 at 8:27 pm

Wow – talk about the open discussion of the unspoken “dark side” of Boomers, and retirees.

The system is already close to Bankrupt – as the Government watches that Oil money seep away, like Justin Trudeau’s popularity.

My bet is that the Gov. will legalize weed and tax the hell out of the stuff. (*Where else are they going to raise money? – except, with, gulp, by raising TAXES).

Kids – what Mr. Turner has pointed out in a polite way – is that a ton of our cohort have been MORONS with their money.
Maybe it was house craziness – or the “wait ’til I inherit Dad’s wealth”, that has lulled them into the stew they find themselves in now.
Sadly, many of my Boomer friends are in deep clam dip. Very upsetting.

#128 Daisy Mae on 02.01.15 at 8:28 pm

#25 1drs: “The idea that the boomers would bankrupt the country has been in play for many years.”

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

The governments are unable to foresee…anything.

#129 Irish Stew on 02.01.15 at 8:29 pm

People only worry about themselves and grab what they can.

The govt should be looking out for its constituents, but in the end they are like the above – looking out for themselves only.

#130 Cow Man on 02.01.15 at 8:30 pm

#99GeorgesoonToBe Retired

In a perfect world you would be absolutely correct. Unfortunately the CEO of the Insurance Company is a best buddy of the Finance Minister etc. Not only does big money talk, it also votes and sponsors the ROM etc. That is where the wheel gets greased.

#131 Linda on 02.01.15 at 8:33 pm

#23 – CRA website has the tables to let those born 1958 & later know how much longer they have to wait to collect OAS. For someone born in June 1958, they have to wait to September of the year they turn 65 before they can collect OAS.

Anyone born before March 1958 can still collect as soon as they turn 65.

#132 gut check on 02.01.15 at 8:34 pm

Intergenerational finger pointing is just another distraction from the real problem.

We all know that, right?

85 individuals own something like half the world’s wealth. There’s your trouble.

Also, what is with this habit people have of wanting to pull others down? “Public Service pensions are the problem because I get less” “Teachers get paid too much” blah blah blah. Bulls#it. Pull each other UP. Believe me, the money’s out there for ALL OF US.

Stop fighting over crumbs. Take back the pie.

#133 Daisy Mae on 02.01.15 at 8:35 pm

#29 Pinstripe: “At my age one can of sardines lasts me for two full meals, whereas in my younger years two cans were mandatory for each meal.”

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

You’re kidding? LOL There are recipes out there that require sardines?

#134 Stuck with the Boomers on 02.01.15 at 8:37 pm

They gave us great music…. I can forgo them the OAS..party on.

https://www.youtube.com/watch?v=DohRa9lsx0Q

You call that ‘great music’? — Garth

#135 Mike on 02.01.15 at 8:39 pm

“In Fact, this is the biggest bill the government pays in terms of social spending – about $40 billion this year, expected to rise to more than $100 billion annually in 2030, as the Boomers lap it up.”

Here we go again with the scary numbers devoid of any context.

Assuming a conservative rate of inflation of 10% from year between now and 2030 – the whopping 100 Billion will be worth today’s 26 Billion. If you are a millennial, don’t worry by 2030 you’ll be pulling well into the six-figures annually even as a Starbucks Manager. If you are a boomer, gen x in 2030, with no additional savings or income streams in retirement – you might just have to sell your $4.4* Million Freehold in the 416 to see you through the rest of retirement . Assuming today’s $900K freehold appreciates at an ultra conservative 2% annually (after 10% real inflation, every year) until 2030. There – problem solved.

O yea – interest rates will be going up, just not enough to matter.

#136 I'm stupid on 02.01.15 at 8:41 pm

I can’t agree more with what you’re saying Garth. Lets also add that welfare should not be a career. I agree that welfare is needed as a safety net but a perfectly healthy person on welfare for 10-15 years is total B.S.

#137 Stuck with the Boomers on 02.01.15 at 8:44 pm

You call that ‘great music’? — Garth

haha
Now you’re really gonna open a can of sardines…

Clowns to the left of me, jokers to the right… seems to hit the spot!

#138 KAC on 02.01.15 at 8:45 pm

I often hear younger people complaining about supporting CPP, OAS and the GIS and then, in the next breath, whining about how older workers who don’t retire are stopping younger workers from getting hired or getting promoted.

Maybe if those benefits were increased, a lot more older folks could afford to retire and free up those jobs for you.

As for the older folks having lived through some kind of “Golden Age”, nonsense!

For most of the boomer generation life was not as easy as a lot of youngsters seem to think. Sure, we bought houses for a lot less, but we didnt demand granite counters, SS appliances and walk-in showers. also, we earned a lot less, paid higher taxes than today and had mortgage rates that ranged between 10% and 20%.

If you are amongst the few who had wealthy parents who really did benefit from that imaginary “Golden Age” don’t you think it’s only fair to introduce a 100% death tax to redistribute their unfair gains to the entire population rather than just to you?

#139 John Prine on 02.01.15 at 8:48 pm

I’m 63, my wife is 55, I am retired, she still works at a job she loves. We own a house, paid weekly mortgage payments when we did have one.

Saved a few hundred thousand, stocks, mutuals and term deposits. We don’t borrow money, pay our credit cards off every month and helped our 2 kids get an education.

Most of my friends are in the same situation, I know very few with big trucks, RV’s and boats, everybody travels a bit but most would never consider being in debt at our age.

I guess statistics don’t lie but not all boomers are broke and wasting all their money living shallow and thoughtless lives…….Just sayin’

#140 How to stretch yer sardines... on 02.01.15 at 8:49 pm

Nothing wrong with sardines…

http://www.chow.com/food-news/47126/7-things-to-do-with-canned-sardines/

#141 kommykim on 02.01.15 at 8:50 pm

RE: #41 Naughty aughties on 02.01.15 at 5:04 pm
And if I’m employed by whole life, why can’t I get an EI refund at 65?

What does the “I” in EI stand for? That’s right. Insurance.
No refund if you’d don’t crash your car, burn down your house, etc…

#142 Daisy Mae on 02.01.15 at 8:53 pm

#32 Linda: “Also you have to have lived in Canada at least 40 years between ages 18 & 65 to get the full amount.”

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

…and for those 40 years all seniors contributed to the economy one way or another. They may not have been astute when it came to economics. But they DID pay their ‘due’.

#143 Marquis de sale on 02.01.15 at 8:55 pm

Wealthy coffin-dodgers do not spend their OAS, they squirrel it away in their tax-free savings accounts. They don’t need it. Drop the clawback threshold to $30,000 and get offa my cloud!

#144 a prairie dog on 02.01.15 at 8:57 pm

#100 Macrath on 02.01.15 at 7:29 pm

#35 Pre-retiree

Would be happy to hear any opinion on this subject.
____________________________________________

http://www.cbsnews.com/news/why-you-should-avoid-preferred-stocks/

– – – – –

Being a U.S. story, much of that is not applicable here.
Different countries have different laws and tax issues.

The U.S. doesn’t have a dividend tax credit for individuals on preferred shares. Canada does.

A quality ETF holding preferred shares gives you more diversity, as you are not risking everything on individual shares in 1 or 2 companies. An ETF could hold shares in dozens of companies.

Generally speaking, U.S. based stories are not a good primer for Canadian investing advice.

#145 Marco on 02.01.15 at 9:02 pm

@Pinstripe.

A baby sardine
Saw his first submarine
And cried as he looked through the peephole,
‘Oh, come, come come,’ said the sardine’s mum,
It’s only a tin full of people!!

~Spike Milligan

#146 jean on 02.01.15 at 9:03 pm

46 / KAC: “…I still think that an inheritance tax seems fair. What have younger folks done to deserve an inheritance? When my wife and I depart this mortal coil it would be okay with me if the government took all our assets as a death tax (or inheritance tax)…”

Inheritance tax is highly unfair. Those assets have already been taxed once. If you would like to leave money to the government when you pass away, all you have to do is name the CRA and/or political party of your choice in your will.

On the other hand the me-me-me generation of spoiled entitled kids who overstretched on their mcmansions and are now watching mom and dads pennies lest they overspend what the kids think is theirs is shocking and revolting. Mom and dad should be out living large, taking nice vacations and spending their money however they like because its their money.

The solution is to tell the kids they shouldn’t expect a penny and to bugger off if they offer “advice”. The solution is not “inheritance tax”.

#147 Kokuzi on 02.01.15 at 9:03 pm

Just a note to say that the OAS sum of $560/month is limited to ‘full pension’ recipients, as defined below. I’m Canadian, but have lived outside of Canada for about 17 years, so qualify for only ‘partial’ pension’. I was told by a gov’t rep who checked my account that I’ll receive around $300/month in OAS from age 65. It’s fair that I receive less, as I’m non-resident, and so pay taxes where I live…
This may be of interest to other non-resident Canadians.
(http://www.servicecanada.gc.ca/eng/services/pensions/oas/pension/calculate.shtml)

“Full pension
You may qualify for a full Old Age Security pension in one of two ways:

You resided in Canada for at least 40 years after turning age 18, or
You were born on or before July 1, 1952, and
on July 1, 1977, you resided in Canada, or
on July 1, 1977, you did not reside in Canada but after turning 18, you did reside in Canada for a period of time, or
on July 1, 1977, you possessed a valid Canadian immigration visa.
In addition, you must have resided in Canada continuously for the 10 years immediately before the approval of your OAS pension. If you were absent from Canada during that 10-year period, you may still qualify for a full pension if:
you resided in Canada for at least one year immediately before the approval of your OAS pension, and
you had periods of prior residence in Canada that were equal to at least three times the period of absence during the 10-year period (i.e., three years of residence for every year of absence). For example, an absence of two years between the ages of 60 and 62 could be offset by six years of residence in Canada after age 18 and before age 55.

Partial pension
If you do not qualify for the full Old Age Security (OAS) pension, and do not want to wait until you do, you may qualify for a partial OAS pension.

A partial OAS pension is calculated at the rate of 1/40th of the full OAS pension for each complete year of residence in Canada after age 18.

The minimum period of residence in Canada you need to qualify for a partial OAS pension is 10 years after your 18th birthday (as long as you reside in Canada when you receive your OAS pension). For example, if you resided in Canada for 10 years after your 18th birthday, you may qualify to receive 10/40ths or one-quarter of the full OAS pension.”

#148 Andrew Woburn on 02.01.15 at 9:04 pm

The future of OAS?

“Paying everyone a basic income would kill off low-paid menial jobs”

http://www.theguardian.com/commentisfree/2015/feb/01/paying-everyone-a-basic-income-would-kill-off-low-paid-menial-jobs

#149 Daisy Mae on 02.01.15 at 9:09 pm

#38 Canned salmon for me: “They are coming for you, pinstripe. The sardines bit was funny.”

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

I don’t this Pinstripe is kidding…. LOL

#150 Slim on 02.01.15 at 9:14 pm

Seniors actually spending money at MacDonalds and Tim Hortons? You got to be kidding. I’ve seen it where they’ll buy one cup of coffee. Then make it last several hours by loading up on refills.

#151 4th Yorkshireman of the apocalypse on 02.01.15 at 9:20 pm

Slim: “Seniors actually spending money at MacDonalds and Tim Hortons? You got to be kidding. I’ve seen it where they’ll buy one cup of coffee. Then make it last several hours by loading up on refills.”

LOL
Frugal bastards ain’t they…

#152 Herf on 02.01.15 at 9:21 pm

Hey Garth! You and your blog site got honourable mention in the article posted by #111, and in one of the comments following the article. Congrats!

P.S. Your blog engine doesn’t like UK/Canuck spelling of some words (i.e. “honourable” vs. “honorable”).

#153 Herf on 02.01.15 at 9:25 pm

#112
“I do not understand where people will work in the future. Healthcare?”

As euthanizers and undertakers. (If you have a choice, take the latter – your customers won’t complain).

#154 Blobby on 02.01.15 at 9:25 pm

Can I stop paying into CPP then if i’m not going to get any of it?

#155 Fzzzz on 02.01.15 at 9:26 pm

We have to set it right for the younger generations. Soon, we boomers will be totally dependant on the charity of those we have so far screwed. Some of what we are blamed for happened on the watch of those before us but we had the chance to correct it.

Fantastic article Garth!

#156 Next PM ? on 02.01.15 at 9:32 pm

Election time coming soon in Canada. Can’t count the number of people I’ve heard lately say that Mulcair would make the best PM but since he is NDP he has no chance of winning.That leaves Trudeau and Harper. Trudeau’s continuously in the news for wanting to legalize weed and insisting his party members be pro abortion . Harper, when not playing with his house band just doesn’t know that he has far outstayed his welcome. Bottom line is , the choices for the upcoming election might be the worst we’ve ever had in a long time. What to do?

#157 pinstripe on 02.01.15 at 9:32 pm

#121 DisgustMadeMePost

So does that mean since you expected to get money from the government (other canadian citizens… Including your own kids/ grand kids ) that you CHOSE not to organize your own finances for your retirement years? Telling in itself. Did you live well? Did you live irresponsibly? Do you also need the rest of us to subsidize your cardiologist? Just wondering.
If you’re ok financially and STILL want other Canadians to work to pad your bank account, you’re coming off as a greedy jerk.

Times have changed. It’s not the 50’s or 60’s anymore … Where a family could live on dad’s pay cheque alone. Changes have to be made and you or me might have to EXPECT less of our fellow Canadians’.

———————————————————–

In the 1960s the government social policies were changing for the betterment of all Canadians. At that time I was vocal that the programs were not attainable long term and most of all they were not sustainable. I was told to lighten up and was offered a chocolate bar to stifle me.

The social programs included free healthcare, education, pensions, jobs, etc. Everything was FREE and paid by the taxpayer from cradle to grave.

In our household we lived within our means. Saved for the rainy day. Paid whatever tax I had topay. I did not use the system and wouldn’t even think to abuse the system. I was a Responsible Canadian Citizen.

I was never unemployed. did not use sick days.

when I retired at age 65, I enquired into some of the senior benefits only to learn in short order that most were not available to retirees above a certain income, and entitlements have been going downhill since.

I DEMAND what was promised me and what I paid taxes for. No more. No less.

I am NOT Greedy. I Demand what is mine and I don’t give a rip what someone else does.

At my age WHY am I being punished, whereas the non savers are being rewarded?

#158 Macrath on 02.01.15 at 9:34 pm

140 a prairie dog
———————————
That`s the only article on the internet that isn`t a sales pitch.
Prefs are the same here as they are in the US and issued with the same features and for the same reasons. They have the same asymmetric risks.

Unless you have one of Garth`s financial savants working for you I`d pass and stick with good quality dividend paying common share index etfs.

Check the chart for ZPR– http://tinyurl.com/q3sfmow

Nice dividend but you don`t have much capital left !

Exaggerate much? And why would you buy ZPR when much better alternatives exist? XPF pays 4.9% and has dropped marginally as the US rate increase approaches. Bank prefs are on sale, and should form a hunk of a balanced portfolio, without the volatiiity of commons. — Garth

#159 Sydneysider on 02.01.15 at 9:34 pm

#143 Kokuzi

Thanks for the information. It seems that the OAS is a form of compensation for putting up with Canadian weather. O well, I will have my memories of days in the sun, if not my OAS.

#160 Smoking Man on 02.01.15 at 9:37 pm

Seahawks by 3 my call

#161 Marco on 02.01.15 at 9:37 pm

“Gimme shelter” with cheap interest rates even if it becomes a “beast of burden” “You can’t always get what you want” but with low interest rates it sure is easier. “Start me up”and I’ll never stop taking on cheap debt.
“Let’s spend the night together” and tomorrow it’s only debt and “time is on my side.” “It’s all over now I’ve reached my debt ceiling “paint it black”. ” I can’t get no satisfaction” that’s a “Bitch” but I’m still “Happy”
I’ll take the “Good times, bad times” “I’m free”

A debt to the Stones.
Gen X

#162 April on 02.01.15 at 9:41 pm

Ralph: I wasn’t actually thinking as far as the taxes. I was thinking of concerts and T-shirt sellers and big-lip sticker sellers and roadies and scalpers and wardrobe people and TV crews and hotels (maybe not for the band, but for everyone who came to town for the concert) and the restaurants/bars and City Halls who tax the venues and record stores and iTunes and the cleaning staff who get the yuck off the dressing room walls and and and and. Even if the Stones themselves had never paid a cent of tax, the flurry of activity around them certainly plumped up the economy. There’s no trickle-down, there’s only ripple-out.

#163 Leo Tolstoy on 02.01.15 at 9:42 pm

I find it amusing when people talk about doing ‘jobs they love’. 99.999% this is demonstrably false. If they really ‘loved’ it, they would volunteer to do it for free.

Since it comes with a price tag, it’s not love. Sorry.

#164 Dwilly on 02.01.15 at 9:43 pm

Garth, please write a post with your thoughts on some of the guaranteed minimum income proposals.

#165 Its OVER for the Canadian oil sands on 02.01.15 at 9:44 pm

Look at Oil drop yet again after the end of month dead cat / short covering bounce. Oil headed to under $40. We are having an orderly shutting down of the Oil sands. Alberta is finished.

#166 Leo Tolstoy on 02.01.15 at 9:47 pm

Let’s be blunt. If you need OAS, you’re poor.

Nuff said

#167 Raleigh on 02.01.15 at 9:51 pm

#142 Jean: “Mom and dad should be out living large, taking nice vacations and spending their money however they like because its their money.”

Like my parents, one of whom has no pension nor CPP and the other who took the full non-spousal option at 60 despite having awful health, leaving the other potentially destitute… They take two trips a year to sunny destinations and firmly believe that magical money fairies will pay for the next 15 years of decline on their modest fixed income. They inherited their house after a lifetime of financial profligacy, so at least there’s that. When I explained it would have to be sold to pay for their old age care they were shocked. When I was concerned they’d run out of money and asked them to reduce their spending, they had the audicity to propose moving in with my spouse and I — note, we rent a one bedroom apartment. I laughed and laughed.

#168 J. Goebbels on 02.01.15 at 9:51 pm

Your blog posts are really starting to sound like propaganda. Turning people into caricatures and blaming them for societies ills.

“Is there risk here? You bet. But it sure beats waiting around to see what the government hands over. Especially when [Jews] are eating your lunch.”

Prejudice bordering on hate speech. A sad turn.

This kind of thing is always self-serving, as it is in your case. It does not help but only fosters evil and it always leads to the same ends.

I’d say we’ve reached a new low in comments to this pathetic blog, if that’s possible. Not being able to debate public retirement income policy for fear of being called a Nazi leads to one inescapable conclusion. Maybe it’s time I just left people to their own prejudices and devices. Life’s too short. Time too precious. — Garth

#169 KAC on 02.01.15 at 9:54 pm

Jean #142, my inheritance tax suggestion was slightly tongue in cheek, intended to remind the youngsters who expect a nice inheritance that perhaps they shouldnt be complaining about how easy they think their parents had it.

I am appalled by the attitude of some of my friends children who are very open about expecting a big windfall when the old folks croak. One such worthless lump of spawn angrily told an aging friend mine that he shouldn’t replace his 8 year old car with a new one. The self-centered little maggot then complained loudly and bitterly “you’re peeing away my inheritance”.

These are often the same selfish, heartless bunch, who would be content to see other peoples parents living in dire poverty.

After the maggot left I suggested to my friend that he should liquidate all his assets and buy a lifetime annuity with no residual value. Much to my delight, he appears to be considering it.

With kids like that, the rest of society is more deserving of profiting from the inheritance by having it go into general revenues.

#170 John in Mtl on 02.01.15 at 10:00 pm

I’ve had to put up with buying planes that can’t shoot and can’t fly,

second hand submarines that can’t swim and catch fire at the flick of a switch,

countless bridges and roads to nowhere,

billions of dollars into IT projects that never worked (ie: gun registry),

many millions (or billions over the years) lost from tax evasion and “sending the elevator” back to party friends & lobbyists, poor planning,

the feds stealing hundreds of millions of the EI fund (our collective money),

I could go on and on, you get the idea. I feel “entitled” to a “refund” for all that bad management. For all the years of gov’t bumbling, wasting, gifting, I deserve that OAS cheque when I’ll get it.

#171 millennial cowboy on 02.01.15 at 10:00 pm

#34 and #52 you guys nailed it.

#172 The real Kip on 02.01.15 at 10:03 pm

The thing about those 9-million Boomers who are going to retire is, they vote. And, we are more likely to vote as a block than disenchanted up and coming generations.

OAS will be around for long enough for the Boomers to retire. The gen-whatever generations will just have to deal with it..

#173 Keep on keeping on on 02.01.15 at 10:10 pm

Yer a charmer pinstripe. Life’s a bitch ain’t it. Ya win some u lose some.

#174 John in Mtl on 02.01.15 at 10:10 pm

A “reprint” from a blog or comment (sorry, don’t know the author, I take NO credit for this comment) from April 2014:

nice thought for gen Y – the Boomers still support all of you whichever way you look at it:

If the Boomers keep working & keep all the ‘best’ jobs then they will be paying for themselves, because they will also be paying the most taxes. Plus if the Gen Y’s can’t get a job, they are presumably being either supported by Boomer parents OR by social assistance paid for by – you’ve got it – working Boomers. Bonus for the next generation is that if Boomers work until they die then they presumably won’t cost the next generation a cent in social support in their turn:)

#175 Andrew Woburn on 02.01.15 at 10:15 pm

“Now that oil prices have fallen below $46, any euphoria over cheaper energy will be tempered by losses that are starting to show up in investment funds, retirement accounts and bank balance sheets. The bear market has wiped out a total of $393 billion since June — $353 billion from the shares of 76 companies in the Bloomberg Intelligence North America Exploration & Production index, and almost $40 billion from high-yield energy bonds, issued by many shale drillers, according to a Bloomberg index.”

Cheap Oil Burns $390 Billion Hole in Investors’ Pockets

http://www.bloomberg.com/news/articles/2015-01-30/oil-plunge-puts-390-billion-hole-in-investors-pockets

#176 NoName on 02.01.15 at 10:17 pm

How about this

http://rt.com/business/228311-croatia-erases-debt-poorest/

#177 CalgaryRocks on 02.01.15 at 10:23 pm

#128 gut check on 02.01.15 at 8:34 pm
Also, what is with this habit people have of wanting to pull others down? “Public Service pensions are the problem because I get less” “Teachers get paid too much” blah blah blah. Bulls#it. Pull each other UP. Believe me, the money’s out there for ALL OF US.

Yes, you’ll notice that when someone is drowning (the private sector) and you (public servants) sit there by the side of the pool, enjoying your margarita (golden pension plans), while going through the drowning guy’s wallet, he will have this unexplained reflex to reach out and grab you by the leg in an attempt to wake you the F up.

#178 Frustrated Kiwi on 02.01.15 at 10:26 pm

Agree 100%. Here we have a similar plan except it’s not means tested and the current government refuses to move the age from 65. Needless to say, as gen-X, it is not part of my retirement plan! The argument “I paid taxes all my life so I deserve it” really bugs me. I will have paid fire insurance all my life too and hope not to use it – same idea. I certainly don’t expect a payout at the end of my life because my house didn’t burn down! A civilized society has safety nets for the needy, but we should all strive not to need them.

#179 Pre-retiree on 02.01.15 at 10:27 pm

Sorry if I offended some about my question about preferred shares.
I realize the topic was about OAS. My late grandmother needed help from the gvt to make ends meet although she had worked hard all her life. Then, she was penalized because the social worker noted she had a color TV (that was in the 70’s). I understand perfectly well the point of the discussion today, and I wear my heart on my sleeve for older people with no means.
However, what do you expect from this blog? This is a financial blog, not a social service blog. Those of us who have had the good fortune to have a minimum of education/income come here to get enlightened about financial matters. Hopefully, this will result in less of us needing gvt assistance in the future, and more of us paying taxes for those who need it. I have no issue with paying taxes to help the less fortunate but I want to pay only my fair share because my taxes do not always go to those who need it the most (see above). I prefer to help directly.
But what about those who could also save themselves, and who don’t, and then look at the gvt to help them? Those are the same who are angry at everyone else, and like to think it is easier for other people.
I never heard my grandmother feeling sorry for herself. She had nothing, and was still grateful.

#180 Yyc not retired on 02.01.15 at 10:28 pm

If housing, daycare, schooling, and other kid related activities were affordable- people might have more than one or two! Then there would be a few extra taxpayers around.

#181 Trojan House on 02.01.15 at 10:29 pm

Communism/Marxism = state runs everything = we’ve seen how that has worked out.

Socialism = take money from someone to give to someone else = taxes = oops, not enough, borrow money to pay that someone the difference = debt = we’re seeing what is happening to this concept right now.

People on this blog advocate for more and more taxes – tax this, tax that, tax this and that. Tax the rich, they don’t pay enough. By the way, what is the definition of the rich in Canada? You’d be surprised how little people have to make to be defined as “rich.” Statistics also show that the “rich” in fact pay “their fair share.” But hey, let’s tax them more and more. They tried exactly that in France and look what happened.

How much tax do you want to pay? 50%? 60%? 70%…100%? It really does not matter because no matter how much you take from someone to give to someone else, it is never enough = government debt.

Forget about consumer debt. Government debt is the real killer. A thousand people going bankrupt won’t be as bad as say the government of Ontario going bankrupt. A good example, albeit on the municipal side, is Detroit. How did that work out for them? How about Greece? How’s it working out for them. Beware government debt.

It’s not okay for me or you to make a promise we can’t keep, however, it is more than okay for a politician to make a promise they can’t keep just to be elected apparently.

#182 Sean on 02.01.15 at 10:30 pm

PM, PM, PM! Of course at this rate, you will only get the young, above average income, Millenial and Gen-Y voters… so about 1% of the vote. Nonetheless, I am particularly enjoying the recent posts. Keep it up!

#183 Sean on 02.01.15 at 10:37 pm

#11 The 1%

One solution. Tax Dividends and Capital Cains at same rate as Income taxes.

Problem solved. But sheeple can be easily persuaded.

=========

Brilliant! Go Canada! We will double tax any activity that is actually productive enough to succeed and make money. With it, we will redistribute to an assortment of needy failures. This land is my land… wait a sec…

#184 SWL1976 on 02.01.15 at 10:39 pm

#57 crowdedelevator

My parents recieve govt employee inflation indexed pensions

—————————

That explains a lot.

Now I understand

#185 Millmech on 02.01.15 at 10:46 pm

Just curious as to how much everyone on this blog puts towards their own retirement as a percentage of their gross pay(not including DB/DC plans).I’m running about 30% of gross as I expect nothing from government and employer plans(seen lots of reductions in these).Not curious as to what you’re in and also what do you hope to have when you retire,my numbers are in line for a very high six figure/low seven figure if all goes well for the next 12-15 years.I’m hoping for the best but planning for the worst .

#186 More HAM Please on 02.01.15 at 10:47 pm

Lure more working class “HAM” to Canada will safe our RE, OAS, GIS, OHIP, etc bacon. I am not a realtard.

#187 AlsoDrivenbyDisgusttoPost on 02.01.15 at 10:47 pm

“Unfortunate that you cannot make an argument without descending to an insult. — Garth”

Umm . . . #77 post was much more articulate and much less insulting than anything you have said today. You are an admitted 1% who basically divided the population into “the haves who deserve and rightfully ‘earned’ all the wealth they possess” and the “moronic leeches of society whose sole purpose is to feed off the ‘truly deserving’ among us.” WOW. You have really betrayed your BIG C neoliberal ideologies today haven’t you?

There are those of us “socialists” who may read your blog for financial insights (and responsibly save our pennies) BUT are still able to see the evidence how this capitalist deck you so idolize is heavily stacked in the favour of upward not downward income redistribution.

We know that they are many in our society who work all day for 1 percenter capital masters and still don’t make enough to make ends meet, let alone save for a cushy retirement.

My “socialist self” will happily pay my taxes to support a dignified old age for those who have been victims of increasing income disparities – the kind of right-wing propaganda you are spewing is designed to propagate.

Absolutely, there are privileged money morons among us – but acting like they are the root and singular cause of the social challenges we are facing is just as silly as walking around with blinders on.

#99 says: You ignore all the ways the footballs are deflated to help the few.

Garth, you really need to read #99 post. It will give you a much needed education.

Actually my post was balanced and factual. If you need the government to support you, something went wrong. — Garth

#188 DisgustMadeMePost on 02.01.15 at 10:47 pm

Pinstripe, you can DEMAND whatever you want. Some people can’t even get the life they were promised when they left their mother’s womb… so demand away. Presumably some act of Parliament put that OAS into effect and another act can just as easily remove it! It’s not a Universal Law of Physics. (I know, I know political suicide)

In the 60’s we were a family of 6 living in our own house. Dad worked, mom stayed home. Of course we weren’t wealthy but we were never hungry. For a couple of immigrants who came to this country with the clothes on their backs and a whopping $2 each given to them when they landed, my folks did ok. They never expected anyone, much less the government to support them. Is it the same now?

And frankly, if you KNEW it wouldn’t be sustainable then pat yourself on the back. You were right.

Ps. Sardine recipe?? just eat ’em straight out of the tin! Yum

#189 GOODNEWS on 02.01.15 at 10:48 pm

DELETED

#190 Tony on 02.01.15 at 10:49 pm

Re: #23 takla on 02.01.15 at 4:24 pm

I remember reading about it a couple of years ago in the newspaper. I think it’s around the middle of the year, so he won’t have to wait. Anyone born around the second half of the year 1958 will have to wait a short amount of time.

#191 Captom on 02.01.15 at 10:53 pm

Mike Shedlock is calling a Canadian recession on his blog: https://www.google.ca/search?q=cameron+diaz&client=safari&hl=en&source=lnms&tbm=isch&sa=X&ei=N7nJVMa3Dci0ogTvsIGQAQ&ved=0CAcQ_AUoAQ&biw=320&bih=460#imgrc=ZaxzUHhJ7b-CCM%253A%3BJ1KM9K9kSZlMWM%3Bhttp%253A%252F%252Fwww.hawtcelebs.com%252Fwp-content%252Fuploads%252F2014%252F04%252Fcameron-diaz-at-the-other-woman-premiere-in-westwood_1.jpg%3Bhttp%253A%252F%252Fgossipmagazines.net%252Fcameron-diaz-plastic-surgery%252F%3B1200%3B1823

Dude. Shorten the link. — Garth

#192 LurkerAlsoDrivenbyDisgusttoPost on 02.01.15 at 10:56 pm

Anybody who thinks social spending is the #1 problem driving government debt still doesn’t understanding how banking works – and the running con that has national governments borrowing from private banks.

I rest my case. I think I’ve gained much financial wisdom from Garth – but this post today wades into territory that upholds neoliberal propaganda that is very distasteful.

It’s too bad we can’t have financial gurus who also understand the real complexities of our ongoing social challenges and adopt a humanist perspective. Ahhh the socialist libertarian – I’m off to find that guy/girl’s blog.

Tonight I’ve been accused of being a neoCon and a neoliberal. I’m obviously perfect. — Garth

#193 Krusty on 02.01.15 at 10:56 pm

Do you really believe that TFSA will always remain tax free? Would not surprise me if someday the government looks at all that money sitting there tax free and decides they want some of it. The only sure thing in life is death and taxes.

Yes, it will remain tax-free. — Garth

#194 W on 02.01.15 at 10:56 pm

Save yourself.

#195 Macrath on 02.01.15 at 10:56 pm

No disrespect intended Garth . I just think they are much too complicated for the average DIY investor and require proprietary professional expertise to trade and manage.

Warren Buffett ~ “Never invest in a business you can’t understand.”.
For me that applies to preferred shares in general and preferred share ETFs in particular. YMMV

Then don’t DIY. — Garth

#196 bigtown on 02.01.15 at 10:57 pm

In most major cities in Canada renting is taking up over half of the household income. Salaries have been frozen for decades and many sectors like plants in Ontario have cut wages by 30% from before the great financial wake-up. We are now getting close to nothing return on our savings in the banks. If housing was available and if we could make more than nothing on our savings we might be able to survive in Canada in old age.

Then don’t save your money. Invest it. — Garth

#197 economictsunami on 02.01.15 at 11:04 pm

Roubini: An Unconventional Truth:

“Simply put, we live in a world in which there is too much supply and too little demand. The result is persistent disinflationary, if not deflationary, pressure, despite aggressive monetary easing.”

http://www.project-syndicate.org/commentary/unconventional-monetary-policies-and-fiscal-stimulus-by-nouriel-roubini-2015-02#tJ4cuihDekhwLazx.99

Unfortunately extend & pretend is waning for CBs.

(unfortunate because it may actually force more politicians to become directly involved with misguided policies.)

Rates can’t go much lower in western economies to make much of a real difference & QE cannot supplant aggregate demand.

Japan has tried ultra low rates, QE, stimulus spending and now structural reform.

The results are invariably the same.

When you take your foot off of the gas, you just coast…

#198 Ronaldo on 02.01.15 at 11:05 pm

#21 Niclas Wrenlake on 02.01.15 at 4:22 pm

”The Seniors aren’t going to save this money if they haven’t saved before. Once a spender, always a spender!”

Acutally, most of it will go into the Bingo Parlours, the Casino’s and Lottery Tickets. A further tax on the poor.
The gov will get most of it back.

#199 Rick on 02.01.15 at 11:06 pm

re#24 That’s exactly what is causing and will cause this country (and in particular Ontario) to go bankrupt – the astronomical wages teachers/cops/firefighters are paid – no wonder property taxes keep on going through the roof year after year (their unions expect 5% salary increase yearly …in 5-10 years time you’ll have teachers making 200k/year!)

#200 KAC on 02.01.15 at 11:08 pm

Pre-retiree 171, I’m a little confused.

You stated:
“My late grandmother needed help from the gvt to make ends meet although she had worked hard all her life. Then, she was penalized because the social worker noted she had a color TV (that was in the 70’s). I understand perfectly well the point of the discussion today, and I wear my heart on my sleeve for older people with no means.”

Then you wrote:
“I have no issue with paying taxes to help the less fortunate but I want to pay only my fair share because my taxes do not always go to those who need it the most (see above). I prefer to help directly.”

And finally, you ended with:
“I never heard my grandmother feeling sorry for herself. She had nothing, and was still grateful.”

The reason for my confusion is that your grandmother had at least one grandchild (you) and presumably her own child or children too. Why did her family abandon her to social services? Weren’t family members able to offer some kind of financial help, or were they all on government support themselves at the time?

In response to your comment:
“This is a financial blog, not a social service blog. Those of us who have had the good fortune to have a minimum of education/income come here to get enlightened about financial matters.”

CPP, OAS and GIS involve all of us, either as taxpayers or as recipients. With a promised handout of around $1,500 per month, most average workers are likely to be interested in that when planning their retirement.

The merits of such benefits are open to debate but they are certainly valid topics on a financial blog. And remember, it was our blog master and financial guru who raised the subject.

#201 kommykim on 02.01.15 at 11:09 pm

RE:#148 Herf on 02.01.15 at 9:21 pm
P.S. Your blog engine doesn’t like UK/Canuck spelling of some words (i.e. “honourable” vs. “honorable”).

Garth’s blog has nothing to do with it. Change the dictionary on your browser.

#202 devore on 02.01.15 at 11:18 pm

#40 Disappointed

“Worse, the more money the state gives to people, the less they’ll look after their own needs. ”

Sometimes, Garth… I wonder why you didn’t get along with Stephen. You seem to have more mercy for dogs than humans. Not that both aren’t deserving. But still.

One-time, mythical miracles of self-multiplying food notwithstanding, that’s how incentives and subsidies work. Sorry to break it to you.

#203 unbalanced on 02.01.15 at 11:20 pm

This government let the Bronfman family leave with a little cash, so I don”t mind getting some either

The arguments here are getting bizarre. — Garth

#204 45north on 02.01.15 at 11:22 pm

pinstripe: At my age one can of sardines lasts me for two full meals

OAS = one additional sardine

#205 Old timer on 02.01.15 at 11:22 pm

46 KAC

http://www.dailymotion.com/video/xm9sv9_i-m-old-gimme-gimme-gimme_fun

#206 Kolbie on 02.01.15 at 11:22 pm

Just curious on your thoughts about a system similar to that in Australia, whereby your employer would be required to contribute an additional percentage of your income (9% currently, set to go up over the long term) to an investment fund that is unable to be touched until you reach retirement age.
It forces investment, not just savings, it transfers the burden of retirement to employers rather than government, while still being a part of an overall salary package that is much better managed (and less accessible) than an RRSP. It could be phased in over a decade, and completely removes the need for formal pension plans, CPP, and OAS, as it’s an individual pension based on how long/how much you work, not how long you work for a particular company. It also allows for individual retirement planning with your investment fund, rather than trying to predict your CPP from the government and getting a generic value paid back. Why don’t we develop a system like this?

#207 HJD on 02.01.15 at 11:37 pm

HJD: “Let’s not ignore the fact that “sticky fingers” include those on the grasping hands of beneficiaries of our rigged tax system. For a start, the government could prepare for its future OAS funding problem by starting to tax investment revenue using the same yardstick it applies to salaried employment. But of course that would be grossly unfair to the wealthy.”

“When not enough people invest in the economy already, why would you discourage it?” — Garth

Garth, The tax system isn’t fair to those who rely primarily on employment income. We’d be far better off if the country’s wealth was more equitably shared, and tax reform is probably the only way to achieve this goal. Arguments over OAS are a red herring. The wealthy have achieved their 1% status because profits on investments are inadequately taxed.

Raising taxes on capital gains, for example, would drive investment to less-taxed jurisdictions, like the one next door. With it would go jobs. Nobody wins. — Garth

#208 Smoking Man on 02.01.15 at 11:39 pm

Tonight I’ve been accused of being a neoCon and a neoliberal. I’m obviously perfect. — Garth

Ha, good one..

#209 Ya well that's how it goes on 02.01.15 at 11:43 pm

45North:
pinstripe: At my age one can of sardines lasts me for two full meals

OAS = one additional sardine
———————————–
LOL
Not even a whole extra can. No soup for you.

#210 Walter Safety on 02.01.15 at 11:44 pm

Seniors should arrange their lives to get OAS and all other entitlements.
You can trust seniors who have a surplus to help the needy seniors.
If you give the government more money they will help their friends too .. Want the list?

#211 Queen of Versailles on 02.01.15 at 11:51 pm

Everyone’s always got problems.. even the 1% ers !! actually I have no idea what they ..it’s a bizarro world.. pumped up!!

http://en.wikipedia.org/wiki/The_Queen_of_Versailles

#212 AB Boxster on 02.01.15 at 11:51 pm

Garth,

The interesting thing about your blog today is that everything you say regarding OAS can equally be applied to the Canadian health care system. The only difference is that rather than getting $560 per month, the benefit is universal health care.
No difference really, as I expect that the amount that each person in Canada will use in health care over a lifetime will be vastly more than spent on OAS.

Specifically,
‘In decades to come fewer people will be paying taxes to support the health care system.’
‘There’s no doubt the boomers will bankrupt this system as well.’
‘The health care system will become ageist and patently unfair to younger generations.’
‘As health care burden mushrooms over the next decade it assures governments will go further in debt, or hike taxes. or both.’
‘ It’s a tough future unless people start feeling less entitled and more responsible for their health.
‘Fortunately, staying healthy ain’t that hard’

Are you saying then….
1. that our health care system should be fully means tested.
2. Those who are unfortunate and need more of the health system are ‘health failures’
3. People need to take more responsibility for their health and rely less on the state.
4. The social safety net is unaffordable

It seems, as a boomer yourself, you take delight in putting the boomer generation down.

We’re all getting old and will suck up all our (OAS) health care dollars and bankrupt the government.
All we do is whine about their entitlements. (OAS, Health Care, CPP)
We keep working forever and don’t give younger workers a chance.
We retire too early and its so unfair to others.
Some of us have pensions, and that so unfair to everyone else.

Thanks, we appreciate your support.

I’ve always believed it’s easier to tear something down than to create and build something up.
So rather than having a conversation on how to address the coming demographic challenges of aging boomers:

Health care
Elder care
Income support
Housing

Easier to just complain about the ‘wrinklies’ as you call them, sucking up all the goodness in the world.

There are a lot of complex issues in the world.
A ‘balanced and diversified’ portfolio may address some things, but it is a simple solution to complex problems.

Unless, what you really support is no social programs whatsoever with every person on their own.

No social safety net.
No universal health care.

It’s not an uncommon perspective, and it doesn’t make you a bad person.

It’s just doesn’t represent the country I want to live in.

#213 My House is my Friend on 02.01.15 at 11:54 pm

If the bank of Canada would fund our debt the way they did before 1971, we would have more than enough to fund our social programs. As it is now, that money is pizzed away to the big private banks.
http://www.webofdebt.com/articles/canada.php

#214 West Coast on 02.01.15 at 11:54 pm

http://www.theglobeandmail.com/report-on-business/at-heart-of-new-euro-crisis-germanys-obsession-with-debt/article22740448/

imagine what the Germans must think of us (if in fact they think about us at all) …read this and weep!

#215 devore on 02.01.15 at 11:56 pm

#131 Mike

Here we go again with the scary numbers devoid of any context.

Assuming a conservative rate of inflation of 10% from year between now and 2030 – the whopping 100 Billion will be worth today’s 26 Billion

Estimates like these are in current dollars, and not adjusted for inflation, so it doesn’t matter. And 10% is not a conservative rate of inflation, that’s very high.

This does offer one way to reduce them in real terms, of course, by not increasing them as quickly as inflation.

#216 Guy on 02.01.15 at 11:57 pm

Garth, I think most Canadians are aware of the problem. The media’s have been talking about that for the last couple of decades. Putting the elderly out on the ice pack to freeze to death or be eaten by a polar bear is not a solution either.

So lets talk about solutions. You have been very good at giving us very good advice, and I do appreciate it. Thank you. But we can not keep kicking the can down the road and hope for a miracle.

What I am going to sagest is that we look to other countries who’ve had grave economic difficulties and made changes that helped out in the long run. New Zealand comes to mind.

Should our economy collapse, for what ever reason, we will have to make changes. Why don’t we start making those changes now?

Guy

#217 Capital One on 02.01.15 at 11:58 pm

# 65 Bruce

I’ve run into many people who receive DB with the same view (“OMG – I turned 65 so I don’t get CPP or OAS anymore”). Did no one explain to you what your bridge benefit was?

http://www.cpcpension.com/files/Bridge%20Benefit%20%20English%20acrobat.pdf

A Bridge Benefit is a temporary pension that is designed to fill the financial gap
between early retirement and age 65 (when unreduced C/QPP is available).

DBs have to die.

CO

#218 Ronaldo on 02.02.15 at 12:00 am

#29 pinstripe on 02.01.15 at 4:32 pm

I do not believe for one minute that you are who you claim to be. You’re an imposter coming onto this blog impersonating an old geezer to try and rattle the dogs who are falling for your charade. You are either one of Smoking Man’s multiple personalities, or a basement dwelling parent hating GenXer who trolls around websites looking for attention. The more you post the more you reveal yourself. Especially this post. Get out of the basement and stop making a nuisance of yourself.

#219 gut check on 02.02.15 at 12:02 am

“#172 CalgaryRocks on 02.01.15 at 10:23 pm
#128 gut check on 02.01.15 at 8:34 pm
Also, what is with this habit people have of wanting to pull others down? “Public Service pensions are the problem because I get less” “Teachers get paid too much” blah blah blah. Bulls#it. Pull each other UP. Believe me, the money’s out there for ALL OF US.

Yes, you’ll notice that when someone is drowning (the private sector) and you (public servants) sit there by the side of the pool, enjoying your margarita (golden pension plans), while going through the drowning guy’s wallet, he will have this unexplained reflex to reach out and grab you by the leg in an attempt to wake you the F up.”

hey man, I’m self employed. I get big fat ZERO in terms of ‘security’ handed to me by the government. Or anyone at all, for that matter.

Have you got a better answer now that you know the facts or are you sticking with the insult/threat/non answer which you based on erroneous assumptions?

I’m a ‘lift all boats’ kind of person. You strike me as the torpedo type.

#220 Old timer on 02.02.15 at 12:04 am

OK here is some real music

https://www.youtube.com/watch?v=z3Or7huOK7o

#221 800 RMK on 02.02.15 at 12:09 am

Great post Garth. Enjoy reading your blog.

The concept of personal responsibility is lost upon most people of all ages in this country. There are far to many people in this country who are free loaders no matter which way you look at it.

I just wonder when the people footing the bill for everything are going to say enough is enough .

#222 Matt Gamon on 02.02.15 at 12:10 am

My mother-in-law came to Canada from Hong Kong 20 years ago when she was in her 60’s, did not work a single day, living by herself now and collecting over $1000 a month government money.

#223 Rosholt on 02.02.15 at 12:14 am

I was thinking of starting a business selling low cost food (read human grade cat food) and such to seniors.

Sounds like a better idea now. Maybe a dragon will back me?

#224 Capital One on 02.02.15 at 12:15 am

Pinstripe:

The things that were promised to you were made by governments in the 60s when we (the boomers) were about to enter the workforce en masse. It appears they wrote a cheque that is about to bounce.

Another way to look at it – you’re DEMANDING things from people who weren’t even born when the promise was made on their behalf.

CO

#225 LOL Canada on 02.02.15 at 12:16 am

Here is an idea. Tax capital gains on housing. This will eliminate speculators and tax cheats.

#226 CPG on 02.02.15 at 12:17 am

Garth. Congratulations on making the big leagues by getting quoted in an article which was posted on Zero Hedge.

http://www.zerohedge.com/news/2015-02-01/canada-mauled-oil-bust-job-losses-pile-–-housing-bubble-banks-risk

#227 earlybird on 02.02.15 at 12:23 am

Great post and great comments! In 20 years OAS wont buy you anything, it will be there, but the purchasing power wasn’t promised….BTW, the Zeroguy quoted you this evening, ironically. Very thankful for your blog, its been quite helpful.

#228 Bottoms_Up on 02.02.15 at 12:24 am

#379 chapter 9 on 02.01.15 at 3:17 pm
——————————————————-
You quote 68% net debt to GDP ratio for all 3 levels of government in Canada.

That’s like saying family income of $100,000 and owing a total of $68,000 (for example, total owing student loan, car and mortgage debt).

Not bad!

You also quote $61 billion as the interest servicing cost. Apple (the company) sold $61 billion worth of phones last quarter. Just to shed some perspective on the ‘billions’ number.

I’ll repeat Garth’s words, government debt is not meant to be repaid.

#229 Ronaldo on 02.02.15 at 12:40 am

#32 Linda

”So if one does qualify for full OAS plus full CPP at age 65 (not too many but some will) the combined amount of the two pensions will be just over $19,000 per annum before tax. Try living on that anywhere in Canada. GIS will be in your future for sure.”

Unfortunately Linda, at the moment a single person is not eligible for the GIS once their income (excluding OAS) exceeds $17,100. If a person was to retire with no CPP or any other income whatsoever except the OAS they would receive OAS $563.74 and GIS $764.40 for total of $1328.15 and would be allowed to earn around $3500 per year additional from job income without affecting the GIS. Total of $15,937 & $3500 = $19437. So you see, this amounts to the same number that you come up with for OAS and max CPP. The gov will ensure a person who has not worked will receive same as someone who has paid into CPP their entire working life. You can see why investing in RRSP’s for persons with low income at retirement turns into a tax trap since any money they were to redeem from their RRSP would reduce their GIS by 50 cents for every dollar redeemed. This would represent a 50% tax on their RRSP plus they would have to pay tax on top of that. The other thing is that the additional RRSP income could affect any other means tested benefits such as MSP, subsidized rent, prescriptions, bus fares, etc. You can see why there is not a lot of incentive for some people to save. One of the reasons that the gov came up with the TFSA. To prevent some of the inequities created by investing in RRSP’s by those on low income. Unfortunately most will not take advantage of the TFSA’s and so they end up being the same as the RRSP’s. A tax deferral or tax shelter for high income earners. Such is life.

#230 Nemesis on 02.02.15 at 12:43 am

#Garth’sNightJustGotWorse… #QuotedByZeroHedge!…

…”John Garth Turner, former Member of the House of Commons and now best-selling author in Canada, explained it this way:”…

http://www.zerohedge.com/news/2015-02-01/canada-mauled-oil-bust-job-losses-pile-–-housing-bubble-banks-risk

#231 Different Sean on 02.02.15 at 12:43 am

Regarding the Stealers Wheel song… a few years back I worked with British group The Strawbs. Apparently the drummer was a session musician on that song. To this day he occasionally gets large royalty checks in the mail when it is used in some commercial. Think what you want of the song itself, it always gives me a smile to think that at least one old prog rocker (or folk rocker depending how you look at it) isn’t eating cat food because of it.

#232 Ronaldo on 02.02.15 at 12:47 am

#37 Ray Skunk on 02.01.15 at 4:42 pm

Ray, your post reminds me of an old boss of mine that was complaining that he had never ever collected Employment Insurance benefits. In response to his whining I said, “I suppose you would complain as well if you didn’t collect on your life insurance, right?”

#233 industrial Guy on 02.02.15 at 12:48 am

I guess we’re all going to find out why killing off the unions was a stupid mistake. Unions were the only effective tool working men and women have for negotiating wages, working conditions and benefits like pensions ..

Income distribution is now the crisis of our decade. It’s foolish to think otherwise. The political right may not believe this but all this concentration of wealth will eventually be hurting them too.

Kill off the Middle Class and who will buy what you manufacture? The closing of Target, Future shop stores and others is like the canary in the coal mine. Everyone rich and poor better listen to it’s warning.

The Middle Class was the cash cow that government depended on for taxes. Without a thriving Middle Class, Governments are doomed to chronic deficits. If all 500,000 automotive and related jobs lost in Ontario returned tomorrow, the Government would still have problems balancing the budget. Automotive assembly jobs now pay $12.50 per hour with a top end of $18 per hour after five years. Not the $28 per hour they used to pay. Benefits have been slashed and in some places eliminated. Pension plans? …. are you kidding ……

I highly recommend reading …. “The Price of Inequality” by Nobel Prize winning economist Joseph Stiglitz. Or watch Robert Reich’s “Inequality for All”, https://www.youtube.com/watch?v=0NdDupITDv8

Roughly, 30% of Canadian workers are unionized. Are all the other 70% at risk? No ….some of them are quite wealthy but within this group are a large percentage of the “Newly Poor”. These are middle class workers who were abandoned by the Harper Government and now find themselves officially poor and seriously out of luck.

Desperate times lead to desperate actions. How many have cashed in RSPs to pay for the tires on the 5 year old Chevy Cobalt or medical bills? Employment benefits have become a footnote in Canadian Labour history.

It’s time we all agree that it’s a rigged game. Even the well educated, who did everything right can find themselves eating Friskies on a cracker in their retirement. Who knows how much retirees will have after Real Estate Zombie Apocalypse.

When my generation started working, $35,000 was a comfortable salary for a single person, houses were $60,000 and rent was $500 per month all inclusive. The average industrial salary in Canada (Nov 2014) is $48,911. Houses are now $800,000 and rent is $1,500 per month and you pay utilities

Investments are a great idea but the average working stiff in Canada can’t make ends meet and they’re not living this mythical excessive lifestyle.

A lot of LOC and credit card debt grew from paying for food, utilities and not new cars and stainless appliances.

Wages have simply not kept up with productivity. Someone is benefiting, but it isn’t the workers who make all the widgets or who provide all the services.

If The OAS, is unsustainable then so is the state of taxation in Canada. One good area to look at is capital gains and dividends ….. Tax them as income, after all that’s what they are.

#234 Setting the Record Straight on 02.02.15 at 12:52 am

“http://www.cbc.ca/news/business/richest-1-will-soon-own-50-of-all-wealth-oxfam-warns-1.2917564

One solution. Tax Dividends and Capital Cains at same rate as Income taxes.

Problem solved. But sheeple can be easily persuaded.”
******

So you think Canada could emulate the U.S. and force Canadians to file taxes regardless as to whether they online to live in this country.

#235 breadlines on 02.02.15 at 12:54 am

“The more that’s offered by the state, the less personal responsibility people take. ”

So i suppose you fix your own car, computer and plumbing right? You wrote all the code to this website and don’t pay anyone to maintain it.
No? Well why don’t you get some personal responsibility and be more self sufficient!
You are saying everyone should fixate their lives around money, constantly adjust their portfolio and never make a mistake! Otherwise they deserve nothing from society and should be begging for scraps from the ones who got “real” jobs, in financial services. People are all experts in different things. That does not mean some deserve to starve and die on the street because they made some life choices you don’t personally agree with.

The correct answer is that like medical care, the state provides old age security to protect us all from the random luck of life. That is what I pay taxes for, not foreign wars and fighter jets. We are canadians!

If we need to raise taxes, so be it. The taxes are the lowest they have ever been on corporations and the rich. People moving money around, accumulating money and letting their money make more money simply by the mass of their pile of it, are not contributing anything to this society. Its cute garth that you are an expert at these sorts of machinations, and so obviously would champion them, but all of society shouldn’t have to be complicit in this kleptocracy to avoid eating catfood in a freezing apartment when they become unemployable near the end of their lives.

If anything, we should be raising OAS and equalizing care for all of the elderly. Yes even the entitled, spoiled and wasteful baby boomers.

Otherwise cut to the chase and provide them all suicide booths at 65. The poor always die young anyways right? those stupid poors! getting what they deserve for not believing money is the most important thing in life!

#236 kommykim on 02.02.15 at 12:56 am

RERaising taxes on capital gains, for example, would drive investment to less-taxed jurisdictions, like the one next door. With it would go jobs. Nobody wins. — Garth

Now if people could move freely across borders to chase better jobs (Just like corps chase lower taxes and incentives), then the playing field would be level. I doubt this would be good for workers in the western world though.
On a global economic scale this is happening with jobs being lost in North America to cheaper labour elsewhere in the world.

#237 Jonathan on 02.02.15 at 12:58 am

I laughed at the pictures tonight, thanks.

But your main is still off in my opinion. A bad judgment call on your part.

Kind of like being on the one yard line with the best running back in the league and deciding to try a slant pass to get in the end zone instead.

Oops.

#238 Ronaldo on 02.02.15 at 1:00 am

History of Old Age Security in Canada.

http://www.historymuseum.ca/cmc/exhibitions/hist/pensions/cpp-a28-wcr_e.shtml

One of the problems we have with the OAS is that we are living much longer than when this pension was introduced and up til 1941 the average life expectancy was just less than 65 yrs. Today, that is around 81. So I guess we can blame part of the problem on our great medical system which is responsible for keeping us alive so long. It would seem that not many people in the early years ever got to collect their pensions.

#239 observer on 02.02.15 at 1:04 am

http://www.theglobeandmail.com/report-on-business/albertas-real-estate-woes-threaten-the-rest-of-the-country/article22739292/

They figure the housing will either be a soft landing or a crash…

They forgot water boarding. Imagine 20 years of slow decrease. Just like in Japan. Now that is torture…

BTW I notice your blog has been lighting up lately. Over 300 replies yesterday. It only show one thing. There is excitement in the air, good or bad, its still excitement

#240 Macrath on 02.02.15 at 1:11 am

#173 Pre-retiree
Sorry if I offended some about my question about preferred shares.
————————————————
I don`t think anyone has been offended . There is a lot of action (volatility) going on in the Canadian preferred shares lately. It`s supposed to be a relatively stable market.

James Hymas of prefblog.com says there are a lot of low
quality (credit rating) preferreds in the etfs and if your investing you want good quality.

Garth recommends top quality well selected bank preferreds . There are also closed end managed preferred funds (CEFs)

My QAS cheque is almost in the mail and my 7 year adventure with these ETFs (CPD) netted me 2.6%. That is my experience, the way it is and I`m off to greener pastures. Perhaps a GIC at the Poloz Memorial Ukrainian
Credit Union.

#241 Don on 02.02.15 at 1:12 am

#167 The real Kip on 02.01.15 at 10:03 pm

The thing about those 9-million Boomers who are going to retire is, they vote. And, we are more likely to vote as a block than disenchanted up and coming generations.

OAS will be around for long enough for the Boomers to retire. The gen-whatever generations will just have to deal with it..

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

If it collapses…which it is bound to… You will have to worry as well. You just can’t imagine the flip side of the coin – where the whinny generations in your rear view mirror come together and vote with self interest. It’s a massive bill for us and we are getting new recruits (potential voters) everyday. And with their attention solely devoted to social media sites…I think it would be rather easy to unite them.

Maybe the seniors/boomers could vote in more qualified individuals instead or voting, blue, red, orange. Try independents for a change, proportional representation. Something would be better than the current scheme. Make a point with that voting power to right the course for the future. You maybe old but life and learning are still available as is making a difference.

Oh the magic that could be!

This would be really appreciated…what a legacy the boomers could leave!

#242 kommykim on 02.02.15 at 1:19 am

RE:The OAS, obviously, is unsustainable. That’s why the feds are starting to pare it back.

This is a meme that is perpetuated ad nauseam so that people will just accept it and roll over when the time comes.
What is unsustainable is tax cuts every election cycle. If the CONs had left the GST, corporate, and income taxes the way they were, there would be no deficits.

#243 Karlhungus on 02.02.15 at 1:27 am

Exaggerate much? And why would you buy ZPR when much better alternatives exist? XPF pays 4.9% and has dropped marginally as the US rate increase approaches. Bank prefs are on sale, and should form a hunk of a balanced portfolio, without the volatiiity of commons. — Garth

I thought the capital didn’t matter just the juicy preferred dividend

#244 HJD on 02.02.15 at 1:42 am

“Raising taxes on capital gains, for example, would drive investment to less-taxed jurisdictions, like the one next door. With it would go jobs. Nobody wins.” — Garth

So, let’s retain Canada’s inequitable tax system and just accept its consequence, a serious income distribution problem? The powerless majority always loses on this tax issue, while a powerful and rich minority endlessly and increasingly wins. HJD

#245 Russel wilson on 02.02.15 at 1:46 am

#9. What you are really advocating for is consumption taxes over income taxes. This has many benefits as the entire black market economy (I.e. Drug dealers) would also have to pay tax any time they bought anything.

This is actually the one way to level the playing field for millenniuls vs. boomers. Abolish income tax and replace it with a 25% consumption tax. Folks would continue to spend as they would have more $$ from less income tax. It promotes producing income (younger workers) rather than going on the dole ( or OAS by a different name).

Ps: I didn’t want to throw that last pass. I wanted to give the ball to Marshan.

#246 chapter 9 on 02.02.15 at 1:47 am

So,do you think it is a good idea to give governments more revenue?

By 2008 the Employment insurance account had a surplus of $57 billion.The Supreme Court ruled the federal government DID NOT have to return the money back to it’s contributors (you and your employer).
The court ruled the former Liberal government illegally collected premiums for 3 years 2002,2003,and 2005 a thing called “unconstitutional error” or taxation without representation as parliament sets tax laws.
In 2010 Jim Flaherty closed down this account and rolled the $57,859,571,696 to be exact into general revenues, Presto gone!! That was replaced with an imaginary $8 billion EI deficit. Wonder why your premiums have been going up ever since.

The “great unwashed” or “shepple” just got sheared!!

#247 Ulsterman on 02.02.15 at 1:52 am

This type of discussion always bring out the boomers arguing that they too were wage-slave schmuks, paying taxes, suffering away in the trenches, and somewhat missing the point.

The point is of course that the young workers of today are wage-slave schmuks slaving away in wet, muddy trenches, in the dead of winter, with the good ole dose of trench foot. And no light at the end of the tunnel.

Some differences to consider:

1) Decent jobs right out of high school. This was a realistic possibility for many that basically doesn’t exist now.
2) Job a union and make a living wage – dream on.
3) Go to uni and pay the modest tuition with a summer job. Have you seen tuition today?
4) Get a job and not have it outsourced to India or China
5) Buy a house on 3.5 times one salary and have one person stay home to raise the kids. Ha ha ha ha ha! They used to do that?
6) Think about everything that now has a user fee that was free 30 years ago. You’ll be thinking for quite a while – it’s a long list.
7) Many workers supporting each retiree. I’d be happy to do so knowing that I had 9 other people paying the old codger’s pension. Knowing that it’s just me and the guy besides me paying the pension of the guy with a paid-off house pisses me off.
8) Watching the guy with a gov pension and a paid off house he bought for three times salary get a seniors’ discount, well…

#248 biker222 on 02.02.15 at 1:53 am

Are we really having this discussion? We’re talking about cutting or clawing back someone’s OAP of $500 a month? Seriously? A wealthy nation like Canada can’t provide a basic pension for the elderly? A lot of those folks never had the benefit of CPP due to circumstance or bad luck which makes cutting the OAP doubly cruel.

Completely agree with #202 HJD. We’ve been tricked by the neo cons into arguing amongst ourselves over the crumbs, like pensions, while the 1% make out like gangbusters with the nation’s wealth. Divide and conquer- the oldest strategy in the book. We need to raise the corporate tax rate by a modest amount, and there will be no need to cut anyone’s pension.

And no, I’m not a senior. But someone who sees the value of the social contract and who feels the worth of a society can be judged by how it treats its most vulnerable.

#249 nobody on 02.02.15 at 1:57 am

” For a start, the government could prepare for its future OAS funding problem by starting to tax investment revenue using the same yardstick it applies to salaried employment. But of course that would be grossly unfair to the wealthy. ”

When not enough people invest in the economy already, why would you discourage it? — Garth

Raising taxes on capital gains, for example, would drive investment to less-taxed jurisdictions, like the one next door. With it would go jobs. Nobody wins. — Garth
_______________________________________

So, tell us again Garth, what percentage of your portfolio is now in the Canadian market? Your argument about keeping investments in Canada is full of bowine excrement. As an investor you don’t give a flying F. Cut the crap. Stop making stuff up to defend the indiffensible.

#250 Ronaldo on 02.02.15 at 2:00 am

Ok, time out. Time for a good laugh.

http://www.grownmanstuff.com/construction-equipment-gone-wild/

#251 fisheman on 02.02.15 at 2:00 am

An accomplishment getting both sides contributing. Studies show that people overwhelming like to read blogs that agree with their prior convictions. How about this joke from Russia, “The Bolsheviks lied to us about Communism & told the truth about Capitalism.”

#252 industrial Guy on 02.02.15 at 2:01 am

“Raising taxes on capital gains, for example, would drive investment to less-taxed jurisdictions, like the one next door. With it would go jobs. Nobody wins. — Garth”

Even next door in the USA, they are proposing increases in Capital Gains. It’s simply an unsustainable tax give away. I always enjoy reading about how businesses in the USA scream about their 30% business tax and yet how many actually pay only 13%. They don’t want a reduction of the US business tax. They want a complete elimination of the tax. A famous US based cell phone maker paid no US businesses taxes in 2013 thanks to some nifty accounting and an Irish numbered company.

The end game here is …. investors are a special breed of superhuman. We shouldn’t tax their income because it’s bad Karma. In return, their benevolence will trickle down to us like beams of sunshine.

We should be grateful.

#253 Chaos on 02.02.15 at 2:01 am

Take a walk in any military cemetery, and then understand the why and how.
Promise made, promise kept.
When all the people, that this country was built for are dead, then you knuckle heads can do whatever the hell you want.

#254 Nothing Surprises on 02.02.15 at 2:17 am

From a 70 year young citizen, I’ve enjoyed reading a number of the responses tonight as I sit in the southern climes listening to the gulf waves.

It may be prudent for our government of the future to pay greater attention to the argument on global warming in case it may have to implement the policy of putting citizens on ice flows when a certain age is reached and pushing them into the Arctic Ocean to alleviate the financial strain on the OAS.

#255 Oceanside on 02.02.15 at 2:22 am

People who will be getting no inheritance would like to see them taxed, people that have no capital gains would like to see them fully taxed, people with small private pensions would like to see the OAS supplement taxed. seems we are all interested in one thing….Ourselves, sad…..

#256 Pete on 02.02.15 at 2:40 am

“Unfortunate that you cannot make an argument without descending to an insult. — Garth”

Garth, you’ve described a large portion of your own writing with that statement.

#257 Andrew Woburn on 02.02.15 at 3:03 am

#139 Marquis de sale on 02.01.15 at 8:55 pm

Wealthy coffin-dodgers?
=================

I assume you are:

1. Under 50
2. Immortal

#258 Observator on 02.02.15 at 3:17 am

People need to make a plan for themselves or they simply must be part of somebody else plan.
I found this video documentary very compelling.
https://www.risemovie.com/rentview.html?h=oeAXDXplPMSuziXCBCASrQ&id=8536

#259 jane24 on 02.02.15 at 3:18 am

Garth the fact is that Boomers vote and young people often choose not to. So the politicians respond to their customer base – the boomers. Easy. Boomers have a shorter time perspective.

All it would take for politics to be run by and for younger folk with more of a longer term perspective, is for said folk to get off their butts once every four years and vote.

It is the same story all over the Western world. Young people complain about the system but do not vote and until they become a powerful voting block then yes politicians will ignore them. So they do deserve what they get – nothing.

#260 busted out on 02.02.15 at 3:18 am

So a few months ago I mortgaged the house to go 50% into a swiss franc short, and 50% into a 3x leveraged long crude oil etf. lost all my money.

Still, I look like a total genius compared to whoever called that last seahawks play!

#261 Jerry Mandering on 02.02.15 at 3:46 am

More liberal green glob garbage and misdirection. This ‘seniors are the bad guy argument is straw and feathers.

If we clear the courts and allow Canada’s huge potential revenue from our resources flood the system there will be hikes in OAS and CPP…and plenty to go around for infrastructure and butterfly funding for every flake and crumb in the country. This countries charities will run over with milk and honey. Taxes could be cut in half….with no cut backs in services.

What is making this country poor is the idiots who rampage over the idea that Canada should be great. These same people support higher taxes for the status quo because they can’t think of allowing Canadians to grow rich and benefit from our fantastically abundant geography.

The people who grouse about paying seniors pensions are the same dupes who drink the drivel of Canada’s industrial competitors…the Obama’s and Rockefellers of the world who are directly funding the green blob/political interference war on Canada.

Folks…there’s plenty of money…trillions ready to gush through the streets…it could raise union wages…..employ our children…build new schools and hospitals and put two chickens in every pot….if we can just get over the idea that the enemy isn’t us….it’s them. We’re being duped by those who’d have eat scraps while they take the pudding.

We should realize as Canadians that our future is bleak if we don’t get these union liberal socialist anti everything green blob goons off our backs……or the streets could be paved with gold…..you have to decide from your country…..an elite union civil service lording over you…..or a country of poverty stricken wages slaves who pay 100% in taxes so that elites, propagandists, traitors and foreign potentates can live high on the hog.

http://www.albertaoilmagazine.com/2014/07/vivian-krause-great-green-trade-barrier/

#262 markymark on 02.02.15 at 3:48 am

There are lots on this blog that think they know so much about policy,where its going in the future,max out that tfsa…….yes we could very well get taxed on it in a decade…….then again these are the same ones saying housing will crash and oh ya interest rates are going up…..we know how that ended!!

#263 only smart people please on 02.02.15 at 4:26 am

@#11 The 1%
One solution. Tax Dividends and Capital Cains at same rate as Income taxes. Problem solved. But sheeple can be easily persuaded.

=========

Have you ever actually done the math to know how dumb you sound when you say tax dividends like income taxes?

Try it — compare two scenarios:
1) You earn 150K salary as a regular person.
2) You earn 150K profit as an incorporated small business. You then pay out all cash (after corporate taxes) as dividends to yourself.

The tax code is designed so that #1 and #2 are the same. If they are not the same, then there will never be a reason to incorporate.

So you sir, are calling everyone a sheeple, when what you are essentially advocating is the elimination of all corporations.

#264 Smoking Man on 02.02.15 at 7:11 am

Gartho makes it to the Zero guys page.

http://www.zerohedge.com/news/2015-02-01/canada-mauled-oil-bust-job-losses-pile-%E2%80%93-housing-bubble-banks-risk

#265 macduff on 02.02.15 at 7:40 am

Garth, I read this piece yesterday written by Barry Mckenna from the Globe and Mail:
“The Canadian market is different in a number of important ways. Very few Canadians are at risk of going underwater on their mortgages because they generally have more of their own money invested. On average, Canadians have 74 per cent equity in their homes, and for those with mortgages, it’s 49 per cent, according to a November, 2014, report by the Canadian Association of Accredited Mortgage Professionals. Three per cent of homeowners have less than 10 per cent equity, and 1 per cent are underwater.”

Given how indebted Canadians are, those numbers seem really high. The average Canadian with a mortgage has 49% equity in their home? Please comment.

I read that, too. The numbers are not credible, and inconsistent with CMHC data that I have referenced here. – Garth

#266 CalgaryRocks on 02.02.15 at 8:07 am

hey man, I’m self employed. I get big fat ZERO in terms of ‘security’ handed to me by the government. Or anyone at all, for that matter.

Have you got a better answer now that you know the facts or are you sticking with the insult/threat/non answer which you based on erroneous assumptions?

I’m a ‘lift all boats’ kind of person. You strike me as the torpedo type.

Who cares about your personal situation. Not me!

I thought the metaphor was a pretty good, not to mention accurate.

A drowning private sector. An oblivious public sector enjoying their exclusive benefits at the drowning guy’s expense while simultaneously picking his pockets.

And finally, the fat public sector whining that the drowning guy is making too much noise and thus stopping them from enjoying their margaritas (exclusive pension plans).

It’s a classic. I should write for Hallmark.

#267 George S on 02.02.15 at 8:09 am

#201 Kolbie: You are referring to a self managed defined contribution pension (DC) plan with locked-in contributions that can only be used to purchase a life annuity at retirement in most cases. We have that here already and it is what most DB pension plans convert to when they get into financial trouble by mismanagement or when the business is sold or privatized. The benefit of DC plans is that they are portable and there is a lot less paperwork when you change jobs (or retire). The downside is that individuals generally pay much higher management fees than large groups so if a non-financially sophisticated individual is charged a 2.2% management fee and a group is charged 0.22% for the same thing there is a lot of money being transferred to the financial industry. This is one of the reasons that the financial industry really pushes to get rid of large group pension plans, they don’t make as much or any money from them.
One other point I would like to make is that DB pension plans are deferred salary. When you start a job with a DB pension plan you know from the first day of work what salary you will be paid on whatever day in the future you want to know. You are given a book with all the rules and in almost all cases you have no choice, you must accept it. Some employers even provide you with an online calculator so you can find out what your pension will be at different times in the future. The reason you take the job with a DB pension plan and get paid less, sometimes much less than people with similar jobs is because of this security. Benefits like a DB pension plan are part of the salary and you pay for them with deductions from your salary.

#268 Joe on 02.02.15 at 8:20 am

OAS is unsustainable but it’s here to stay for one very simple reason: widespread financial illiteracy which is only going to get worse as time goes on. That and tehe fact Canadians won’t let grandma become homeless and starve… I guess some things are worth going into debt over.

#269 debtified on 02.02.15 at 8:36 am

Today’s comment section will break the Internet.

The boomers are also responsible for this.

#270 Fortune500 on 02.02.15 at 8:38 am

As a millennial family, we often try and explain to our parents how much we have to save to guarantee a similar OAS style payout by the time we are their age. We have assumed for a long time that we wont get it. They stare blank faced at us when we quote the numbers needed to generate even $550 indexed for 30+ years.

Sadly, most boomers have never had to deal with the realities of this new age, and most Gen y’ers still have their heads in the sand … or snow.

#271 Basil on 02.02.15 at 9:33 am

A glimmer of hope for Canada?

https://www.youtube.com/watch?v=40Jz0LPQAQY

Break out the tinfoil. — Garth

#272 rosie "moving forward" in the knowledge that, "this won't end well" on 02.02.15 at 9:39 am

Seems Americans have decided to save more for retirement, or a rainy day. Not good for sales though, according to these stats.

http://www.marketwatch.com/story/consumer-spending-posts-biggest-drop-since-2009-2015-02-02

#273 gut check on 02.02.15 at 9:55 am

“#261 Fortune500 on 02.02.15 at 8:38 am
As a millennial family, we often try and explain to our parents how much we have to save to guarantee a similar OAS style payout by the time we are their age. We have assumed for a long time that we wont get it. They stare blank faced at us when we quote the numbers needed to generate even $550 indexed for 30+ years.”

——————————–

At least you just get a blank faced stare. I cannot broach the topic at all without them throwing a tantrum. They have truly bought into the generational warfare propaganda to the point where, even though they have 4 kids and 3 adult grandkids to observe, they believe that all Gen Xers and Millenials are lazy and stupid, entitled and unwilling to compromise. I asked dear old mom one time, “Don’t you feel for the kids today with the cost of their education, the terrible job market & the cost of housing?” She said no, not a bit. If they would get off their Iphones and learn to work they’d be fine, she says.

I’m done explaining it to her, but it does really bother me that she feels more aligned with what talking heads tell her is true than she does with all the real world individuals that she personally knows. Our stories – our lives – are nothing to her. We are all liars, we are all lazy, we are all fooling ourselves.

sad.

#274 Sky on 02.02.15 at 10:02 am

@ breadlines – # 226

“If anything, we should be raising OAS and equalizing care for all of the elderly. Yes even the entitled, spoiled and wasteful baby boomers.

Otherwise cut to the chase and provide them all suicide booths at 65.”

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

Yikes ! Now I’m scared. Will the suicide booths be el cheapo models along the lines of BYOB ( bring your own bullet )… registered gun provided? Or will they provide us with a high end version whereby a terminator from the Ministry of Dementia Mitigation (better known as Senior Snuff) is dispatched and ready to come to your aid with a hot shot especially for one of your decrepit veins?

If we’re looking at the deluxe model, you can count me out. I see the ” humane ” way the USA chooses to execute their death row inmates lately. High tech – via lethal injection – has devolved into nothing short of barbarism. All that expertise and a cornucopia of pharmaceuticals at their disposal but they somehow can’t get a simple lethal injection mix right? It’s not rocket science. Better call in the junkies to help out the govt experts.

Personally,I will need to see the competent face of my veterinarian in my suicide booth before I think this is any sort of a good plan. But I harbor little optimism. Pentobarbital is reserved for our pets these days in our enlightened western culture.

Poll after poll has shown the vast majority of Canadians are pro euthanasia. But the Neanderthals in office don’t want you slipping quickly and peacefully away. That would negatively impact their stock portfolios. Prolonged and needless suffering before you die is BIG business. Only a govt mandated death will do.

Glimmer of hope : brought to you by none other than our enlightened Quebecois

ww.cbc.ca/news/canada/will-the-end-of-life-care-bill-turn-quebec-into-a-euthanasia-tourist-destination-1.2667383

#275 Ronaldo on 02.02.15 at 10:05 am

#269 Fortune500 on 02.02.15 at 8:38 am

”They stare blank faced at us when we quote the numbers needed to generate even $550 indexed for 30+ years. ”

That’s a good point. The money one would have had to stash away in order to obtain the equivalent of the $764.00/mo. GIS at todays savings rates of say 2% would be $458,400. If you throw in the OAS of $563/mo. it works out to $796,800. How many can do that?

#276 Holy Crap Wheres The Tylenol on 02.02.15 at 10:21 am

#159 Smoking Man on 02.01.15 at 9:37 pm

Seahawks by 3 my call

______________________________________________

Stick to your shtick Smoking Man. Football is definitely not your thing.

#277 Getting old on 02.02.15 at 10:22 am

Then don’t save your money. Invest it. — Garth

Crime without punishment: Canada’s investment fraud problem

http://www.theglobeandmail.com/report-on-business/crime-and-no-punishment-canadas-investment-fraud-problem/article13938792/?page=all

Need I say more Garth. I understand we can’t paint all with the same brush, but these are incidences that will keep the elderly away in droves for good reason.

Where did I ever suggest investing in a pool of dodgy private mortgages? I give up. — Garth

#278 David Hawke on 02.02.15 at 10:30 am

I am really disappointed in Garth for this rant where he skews the real facts (as provided by #56) to fit his hypothesis.

#7/47 spot on

#61 good question

However one of the biggest wastes of money isn’t OAS but MP’s/Senator’s pensions which they collect upon being booted out, no waiting until 65/67 for these elite trough feeders.

I would think anyone complaining about OAS would do the right thing and return their MP’s pension from 9 yrs feeding at the taxpayer’s trough! Member of the Canadian Parliamant for nine years,

I have donated my $26,000 annual pension since receiving it (without asking for it). Now, tell what part of my blog a rant. Then you can apologize. — Garth

#279 Kenchie on 02.02.15 at 10:32 am

“My crime on the weekend was saying anyone who reaches 65, and needs $560 a month from the government to get by, has failed financially.”

If that’s a crime, I’m guilty as well.

For a period of time, when I was younger, I thought pensions should be severely curtailed in both the private and public sector so people are forced to start saving for their retirement. But we all know the majority of people are too myopic to do that.

#280 Daisy Mae on 02.02.15 at 10:39 am

“VANCOUVER — The federal government paid a financial settlement — reportedly one of the largest in Canadian history — to a former Vancouver businessman after accusing his Delta, B.C., company of dealing in goods that could pose a threat to national security, and then abandoning the charges a year later.

Steven de Jaray filed a civil suit, claiming he lost millions in personal wealth….”

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

A successful businessman trying to plan for HIS retirement, screwed over by our inept government….

#281 Bob Copeland on 02.02.15 at 10:48 am

In case anybody financially successful is starting to feel guilty:
https://m.youtube.com/watch?v=Y5Ut7qBt1mc

#282 Yyc not retired on 02.02.15 at 10:52 am

Apparently the calgary real estate board was unhappy with the 80% rise in active listings so now they just have it listed as N/A. How nice. What wonderfully transparent data. Creb.com

#283 Daisy Mae on 02.02.15 at 10:52 am

#37 Ray Skunk: “While you’re at it, any tips on claiming disability benefits even though I’m perfectly able-bodied would be great too.”

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

Yes, there’s plenty of abuse happening…more wasted tax dollars.

#284 Victor V on 02.02.15 at 11:00 am

http://business.financialpost.com/2015/02/02/nearly-one-in-five-canadian-energy-companies-eyeing-jobs-cuts-as-oil-plunge-bites/?__lsa=0023-d3b2

Nearly one-in-five Canadian oil and gas companies says it may have to cut staff as commodity prices slide, according to a survey published Monday by Mercer LLC, a human resource consultancy.

One-in-four Canadian companies said they won’t be “buying” as much new talent from outside their organization, while one in six plans to freeze or cut compensation. A third of the companies said it was “too early to tell” whether the price decline will impact their operations.

Mercer surveyed 154 companies in North America, including 97 based in Canada, between Dec. 11 and Jan. 15, on the impact of falling prices on hiring intentions.

#285 Victor V on 02.02.15 at 11:01 am

http://news.nationalpost.com/2015/02/02/canadas-public-servants-have-15-million-days-in-banked-sick-leave/

Canada’s public servants have socked away nearly 15 million days of unused sick leave, which would disappear under the Conservative government’s plan to introduce a new short-term disability plan.

#286 Mick on 02.02.15 at 11:12 am

Been paying into CPP for 45 years and expect to get just over $1,000 a month from it if I work till 65 (another 3 yrs). I need that OAS. Sure I have some savings but what with the great meltdowns of 1982 (the beginning of the end of manufacturing in Ontario): the huge meltdown from 1987-1992: the dot com bust of 2000, the GFC of 2008-2009 and the continuing ravaging of the economy to this day I don’t have as much as I probably should.

#287 leafsfaninyvr on 02.02.15 at 11:18 am

Let them eat cake. – Garth

Actually we’re all doing that. Your kids get the crumbs. — Garth

#288 Smoking Man on 02.02.15 at 11:21 am

#275 Holy Crap Wheres The Tylenol on 02.02.15 at 10:21 am
#159 Smoking Man on 02.01.15 at 9:37 pm

Seahawks by 3 my call

______________________________________________

Stick to your shtick Smoking Man. Football is definitely not your thing.
………

If it wasn’t for the interception on the goal line,last minute of the game, it would have ended with Seahawks by 3.

It was my own fault, I assumed they had it, so I went out for a smoke, turned off my telepathy for a second..

Boom.

#289 NoName on 02.02.15 at 11:24 am

@#280 Bob Copeland

funny how Bill Whittle speech is very similar to this speech from many years prior. AC he sad!

http://youtu.be/IvveZr0D_9Y

#290 Ray Vasquez on 02.02.15 at 11:25 am

I think since the government is going to need more tax revenue, it should tax all income the same, capital gains, dividends, interest etc. as ordinary income.

It should not give tax credits for donations over $1,000 and it should not allow tax deductions for interest paid to buy investments.

I know people will not like this but I am not running for office either! Dole comes in many forms.

#291 Ray Vasquez on 02.02.15 at 11:26 am

The Chretien liberals knew this too and just like they reformed C.P.P, they should of done the same with OAS.

#292 gut check on 02.02.15 at 11:28 am

@ #265 CalgaryRocks on 02.02.15 at 8:07 am

if you don’t care about other people’s personal/work situations then the rest of your post is moot.

#293 Apocalypse2015 on 02.02.15 at 11:30 am

Don’t be fooled by what might look like a US recovery. It’s a dead cat bounce and nothing more.

5 Sure Signs the U.S. Economy is Finished

http://moneymorning.com/ext/articles/rickards/5-signs.php

It’s clear Canada and other places will face a world of pain this year, and real estate will be crushed.

But almost no one seems to bother to think of how much worse it will all be if the US joins them.

That’s why it is so much more likely it will happen, imo.

The US economy is growing, not collapsing. Bad choices by a ton of middle class families – devoting the bulk of their net worth to real estate – have seriously impacted their futures, but not that of their country. We’ll know what this means here in Canada before long. — Garth

#294 Apocalypse2015 on 02.02.15 at 11:30 am

More layoffs.

http://business.financialpost.com/2015/02/02/canaccord-genuity-group-inc-to-cut-4-of-its-workforce-in-capital-markets-business/

#295 Vangrrl on 02.02.15 at 11:33 am

#46:
‘I still think that an inheritance tax seems fair. What have younger folks done to deserve an inheritance?’

Geez, why did you have kids? You brought them into the world. The least you can do is help them along their way!

#296 CalgaryRocks on 02.02.15 at 11:34 am

#289 Ray Vasquez on 02.02.15 at 11:25 am
I think since the government is going to need more tax revenue, it should tax all income the same, capital gains, dividends, interest etc. as ordinary income.

Dividend income is after tax income. It’s taxed at a lower rate at the personal level because the corporation that distributes the dividend has already paid taxes on that income (in theory).

So, in theory, the tax that the corporation has paid + the lower tax that you will pay = the equivalent personal income tax.

#297 industrial Guy on 02.02.15 at 11:35 am

“I have donated my $26,000 annual pension since receiving it (without asking for it).” — Garth.

I applaud your extraordinary generosity.
If anyone deserved that pension it was you for enduring the wrath of the Supreme Leader and his hoard of neutered minions.

#298 Sardines for breakfast on 02.02.15 at 11:36 am

I have donated my $26,000 annual pension since receiving it (without asking for it). Now, tell what part of my blog a rant. Then you can apologize. — Garth
———————————-
Good on ya to be sure. That’s actually amazing it is that much for only 9 yrs and before 65…

Still in the big picture small beans… and this OAS stuff ain’t really the big issue …..health care costs are.. those are going to the stars in the next 10 yrs.. the boomers ain’t going to the good night without a mighty fight

#299 Kilby on 02.02.15 at 11:41 am

93 Vangrrl on 02.02.15 at 11:33 am
#46:
‘I still think that an inheritance tax seems fair. What have younger folks done to deserve an inheritance?’

Geez, why did you have kids? You brought them into the world. The least you can do is help them along their way!
___________________________________________
Well said, we also love our children and an inheritance will help them a little at what is usually a time in their lives where they will make good decisions and good use of what they may receive..

#300 Ralph Cramdown on 02.02.15 at 11:44 am

Where did I ever suggest investing in a pool of dodgy private mortgages? — Garth

As far as I know, you haven’t. I wouldn’t suggest it either.

But you do know that these predators are out there, on a continuum from brokers who put their clients in high fee mutual funds and provide little advice, through the private placement, syndicated mortgage and high commission RESP salesmen, all the way to the outright ponzi schemers and embezzlers. As pointed out in the article referenced in #276, enforcement in this country is lax.

You also know from your work as an investment advisor how lousy many peoples’ portfolios are before they seek ethical and competent professional advice.

You say people should be more responsible, individually, for their retirement savings. We know that a percentage of them — especially the poor, the gullible and the intellectually inferior — are going to get skinned.

I don’t think it’s good enough to say that adequate advice is available from many reputable investment advisors or your local library. It’s true, but any student of the human condition can tell you that many won’t take it, because of sloth, avarice, ignorance or the cunning of others. Many people NEED forced savings (“tax,” to some) and legally mandated professional management. Even for those who don’t, low management fees, pooled risk and pooled funds’ long time horizons are a tremendous boon. Most personal investors overestimate their skill and their returns, and they underperform the market. And those are the ones who dedicate time and resources to it…

How, exactly, is society as a whole improved if we allow or force more average investors to manage more of their own retirement money?

More people have been skewered by the real estate industry, I would surmise. Your argument that most people cannot be trusted with their own financial futures is actually stunning. If true, society has failed. — Garth

#301 jess on 02.02.15 at 11:47 am

Here are some more examples of greedy entitled weenies with a nice map of the abuse of anonymous company ownersip around the world. it reveals a shocking picture.

From: Stories involving anonymous companies
Anonymous companies have been involved in the laundering of billions of dollars, in crimes ranging from ‘modern day slavery’ to fraudsters stealing from ordinary investors.
http://greatripoffmap.globalwitness.org/#!/explore/companies
http://greatripoffmap.globalwitness.org/#!/explore/companies/US-NJ

e.g. Americans sold fake health insurance plans-

“Imagine if you bit the bullet and bought a healthcare plan, only to have a legitimate claim rejected by a fake company when you needed it? …That’s what happened to the 17,000 Americans who were the victims of an alleged $28 million health insurance scam made possible by anonymous companies incorporated in Delaware, Mississippi, New Hampshire and South Carolina.

…. alleged to have sold the fake health care plans and then turned down claims submitted by their victims.[1] Between 2008 and 2010 they are alleged to have used the web of American companies to sell the plans to individuals and employer groups in various states, and to launder their gains and blow the premiums….”

Millions stolen from Ohio school children

“Using anonymous companies opened in the name of trusts for their children as shields, they were able to cover up multi-million dollar crimes and launder the proceeds.[1]
Education is fundamental to all Americans getting a fair chance in life. One government official denied Ohio school children their dues by setting up a web of fake companies which he then paid millions of dollars for non-existent services.[1]

Joseph Palazzo was responsible for managing his school district’s IT Department. Between 2007 and 2011, he and his associates set up a number of shell companies that enabled them to steal at least $3.4 million,[2] by submitting fake invoices for IT products and services they never delivered.

According to court documents, the companies were simply shells established to “conceal the illegal nature of such funds and to avoid detection by law enforcement.”[3] Palazzo then authorized the District to pay the invoices by issuing checks to the shell companies. The nominee owners of the shells kept approximately half of the money and gave the other half to Palazzo for his personal enrichment.[4]

#302 jess on 02.02.15 at 11:53 am

inheritance –the step-up of basis

Census says 16m US children are living on food stamps, double the number in 2007
Census bureau finds about 16 million – or one in five – US children lived in families that received food stamps in 2014
===
the step-up of basis explained

The Tax Loophole (Almost) Everyone Should Want to Close
Step-up in basis for capital gains explained

James Kwak

Shared Auditors in Mergers and Acquisitions
When M&A Actors Share Auditors, Targets Get The Short …
https://medium.com/…/when-m-a-actors-share-auditors-targets-get-the-sh…
4 days ago – A new study, Shared Auditors in Mergers and Acquisitions, documents a novel auditor conflict of interest. The data sugge…

#303 HD on 02.02.15 at 11:53 am

#37 Ray Skunk on 02.01.15 at 4:42 pm

Garth,

How would one go about claiming EI even though one is gainfully employed?

I’ve contributed into the pot for years, and I feel I’m entitled to it. I’m happy to structure my finances in a way that makes me look worse-off in order to claim my EI, even though I make more than enough money and don’t really need it.

While you’re at it, any tips on claiming disability benefits even though I’m perfectly able-bodied would be great too.

Cheers!

How would one go about claiming CAR INSURANCE even though one hasn’t been involved in a Car accident?

I’ve contributed into the pot for years, and I feel I’m entitled to it. I’m happy to structure my finances in a way that makes me look worse-off in order to claim my CAR INSURANCE, even though I make more than enough money and don’t really need it.

While you’re at it, any tips on claiming disability benefits even though I’m perfectly able-bodied would be great too.

Cheers!

Best,

HD

#304 Ray Vasquez on 02.02.15 at 11:57 am

OAS are taxable but welfare, social assistance payments are not.h

This is a big difference and OAS pays less than monthly welfare, social assistance payments like here in Ontario, welfare payments start at $605 a month versus maximum OAS is $568 a month.

#305 Josh in Calgary on 02.02.15 at 12:03 pm

The problem with this issue is it always descends into a blame game.

It’s not a blame game, it’s a numbers game. When the idea of retirement came around the average life expectancy was well below 65. So only a few even made it that far, and if you did then you likely only had a few more years left. The burden on the system was tiny.

Fast forward a couple hundred years and now life expectancy is in the 70s. If you make it to 65 you can probably expect to live another 20 years (some more, some less). Layer onto that the baby boom effect and you are set up to have fewer tax payers to support more people than ever before. This is not just the Harper Conservatives doing this. Listen to some international news and you will know that nearly every country is dealing with this in some way shape or form.

It’s not a question of who deserves what, it’s a question of what can be afforded. Going further into debt to pay all sorts of entitlements is taking money from future generations (not to mention the debt we already have).

I have nothing to complain about with regards to the Boomers in my life since my parent have given me many things, the most valueable of which is good financial sense and the expectation that I should look after my own future and not expect the government to do it for me.

#306 HD on 02.02.15 at 12:12 pm

#41 Naughty aughties on 02.01.15 at 5:04 pm

And if I’m employed by whole life, why can’t I get an EI refund at 65?

And if I never got into a car accident my whole life, why can’t I get an insurance premium refund when I sell the car and decide not to drive anymore?

Best,

HD

#307 Daisy Mae on 02.02.15 at 12:12 pm

#118 Brew: “You would think that when a kid gets handed a $10,000 Canada Student Loan, someone might ask for a SIN number and address of who they will be paying the $4000 in rent (for the year) to.”

————————

Provided that info to CRA for my Mac U daughter last year. They asked for it.

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

Years ago Feds issued students cash up front…and students took trips overseas. Why not? The students never did pay back the taxpayers-financed loans. More government stupidity.

#308 CalgaryRocks on 02.02.15 at 12:13 pm

#291 gut check on 02.02.15 at 11:28 am
@ #265 CalgaryRocks on 02.02.15 at 8:07 am

if you don’t care about other people’s personal/work situations then the rest of your post is moot.

But then what makes YOUR attitude different than mine?

You don’t care about my opinion because I don’t care about your personal situation.

I don’t care for unions because they don’t care about anyone but their members at the expense of everyone at large.

See, we’re all the same. You just think you’re better. You’re not. kumbaya

#309 Ralph Cramdown on 02.02.15 at 12:21 pm

Your argument that most people cannot be trusted with their own financial futures is actually stunning. — Garth

Not most. But enough that we can’t ignore them as being an insignificant few. If I had to guess, I’d say 30%. Even the remaining 70% will muddle through, most of them with suboptimal results. Just look at the library’s or Amazon’s section on investing (over 50% crap), or the crackpots who show up here and post.

#310 Victor V on 02.02.15 at 12:25 pm

http://finance.yahoo.com/news/rbc-canadian-manufacturing-pmi-drops-143000944.html

TORONTO , Feb. 2, 2015 /CNW/ – January data indicated a sharp slowdown in the Canadian manufacturing sector, with overall business conditions improving at the weakest pace since April 2013 , according to the RBC Canadian Manufacturing Purchasing Managers’ Index™ (RBC PMI™). The latest survey signalled that output and new business volumes grew, but at much slower rates than in December, while employment numbers dropped for the first time since the start of 2014. Manufacturers recorded softer input cost inflation during the latest survey period, while factory gate charges increased at the slowest pace for almost a year and a half.

#311 Oot Der Hoos on 02.02.15 at 12:26 pm

To #40 Disappointed’s comment and link.

Your image of Jesus Christ and the loaves and fishes miracle is correct regarding generosity.

However, government is not God. Abundance comes from God and to those who fast and pray and ask God for help.

The athiests and pagans and the disconnected from God received nothing. They were not attending the visit with Jesus Christ.

#312 Two sardines for breakfast on 02.02.15 at 12:31 pm

Good read.

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/part-time-work-past-65-a-necessary-reality-for-jim/article22719467/

#313 Three sardines for lunch on 02.02.15 at 12:33 pm

Ok Out Der Hoos…. out the door with you…. long live the atheists and pagans

#314 G on 02.02.15 at 12:37 pm

Garth – there was no TFSA when I was 30, there was no TFSA even when I was 40. I got RRSP – with headache how to melt it down.

Just saying, without arguing about the basic concept.

#315 Rat free and PST free on 02.02.15 at 12:38 pm

http://calgaryherald.com/news/politics/prentice-sticks-a-fork-in-his-own-pst-trial-balloon

#316 Ralph Cramdown on 02.02.15 at 12:39 pm

I won’t get into all the reasons why many people are TERRIBLE at managing their financial futures, but here’s a few:

http://en.wikipedia.org/wiki/Hyperbolic_discounting
http://en.wikipedia.org/wiki/Risk_aversion
http://en.wikipedia.org/wiki/Anchoring
http://en.wikipedia.org/wiki/Endowment_effect

Plenty more here:
http://en.wikipedia.org/wiki/List_of_cognitive_biases
http://www.minyanville.com/special-features/random-thoughts/articles/12-Cognitive-Biases-that-Endanger-Investors/1/17/2013/id/47441?page=full

Reading the comments on this blog every day, you have to conclude that either a lot of people (not the majority, perhaps, but a lot) make bad saving/investing decisions, or that this blog attracts a worse-than-average subset of investors.

#317 gut check on 02.02.15 at 12:43 pm

@ #307 CalgaryRocks on 02.02.15 at 12:13 pm

you’re misunderstanding me.
I do care about your personal opinion which ought to be clear since I’m engaged with you in this discussion.

What I was objecting to in the first place was your devaluing of *my* opinion based on your assumption that I was a public worker. When I said I was self employed you responded by telling me my personal situation was none of your concern. Do you not see how you’re moving the goal posts?

On the one hand you are deriding a group of people based solely on their personal situations and on the other you insist that the personal situations of others are meaningless to you.

I know a circular argument when I see one.

#318 gut check on 02.02.15 at 12:45 pm

I’d like to go on record as stating that any ‘forced savings’ plan is objectionable in the extreme. I would never want to see that happen.

#319 Cici on 02.02.15 at 12:50 pm

So apparently, according to the MSM, the Americans have wised up and instead of spending the gains induced from gasoline’s downward spiral, are hoarding them for savings:

“Americans cut spending in December by the largest amount since 2009, buying fewer cars and trucks and devoting less money to energy amid a deep plunge in oil prices, defying expectations that consumers would spend more in the face of cheap oil. Instead, consumers saved their windfalls from lower gasoline prices, pushing savings rate to the highest rates since midsummer.”

http://www.marketwatch.com/story/us-stocks-futures-higher-ahead-of-consumer-spending-ism-data-2015-02-02

#320 Marco on 02.02.15 at 12:51 pm

@KAC

“Ever since I was a spotty teenager I paid taxes to support the wrinkles who were around then. Government Pensions were a relatively new idea and most of that generation of old folks had never paid a nickel into the plan but were happy to collect.” Absolutely no respect to the “greatest generation who lived through a depression and lived and fought through a world war. People that settled in this great country and helped build it. Many who came with nothing and started from scratch. Did you get an inheritance from this generation? Or like many of your generation did you buy a cheap house and watch it appreciate and felt like you won the lottery?
Cheers.

#321 Bottoms_Up on 02.02.15 at 12:53 pm

#310 Oot Der Hoos on 02.02.15 at 12:26 pm
—————————————————
Given that God is a concoction of the human imagination, an ‘abundance from God’ is a misnomer and in fact ‘abundance’ then would actually come from Nature, or Government, or your kind God-fearing neighbour.

#322 Ollie on 02.02.15 at 12:58 pm

#46 – have you asked yourself if the royals pay inheritance tax? Look it up. Inheritance tax is where the tax idea shows its full monstrosity, if it was needed anymore. Why would you bust your ass anyway. You are not taking anything with you. You want to perpetuate your genes, it’s only natural. The inheritance tax goes directly against this natural right. Because of geniuses like you we are where we are.

#323 HD on 02.02.15 at 1:12 pm

#315 Ralph Cramdown on 02.02.15 at 12:39 pm

I won’t get into all the reasons why many people are TERRIBLE at managing their financial futures, but here’s a few:

http://en.wikipedia.org/wiki/Hyperbolic_discounting
http://en.wikipedia.org/wiki/Risk_aversion
http://en.wikipedia.org/wiki/Anchoring
http://en.wikipedia.org/wiki/Endowment_effect

Plenty more here:
http://en.wikipedia.org/wiki/List_of_cognitive_biases
http://www.minyanville.com/special-features/random-thoughts/articles/12-Cognitive-Biases-that-Endanger-Investors/1/17/2013/id/47441?page=full

Reading the comments on this blog every day, you have to conclude that either a lot of people (not the majority, perhaps, but a lot) make bad saving/investing decisions, or that this blog attracts a worse-than-average subset of investors.

Fascinating stuff indeed.

Reading about this truly changed my perspective on so many things.

I would kindly recommend those books if one wishes to learn more about the subject:

The Art Of Thinking Clearly Paperback by Rolf Dobelli

Thinking, Fast and Slow Paperback by Daniel Kahneman

Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics by Gary Belsky and Thomas Gilovich

@Devore seems to know a lot about this. Perhaps she/he can recommand other books?

Best,

HD

#324 Bottoms_Up on 02.02.15 at 1:12 pm

#32 Linda on 02.01.15 at 4:36 pm
——————————————–
What is happening and what will continue to happen is retired couples living together. A 2-bedroom, 2-bathroom rental in a small community might run about $800/mo ($200 per person). While not ideal, this is the present and the future….also, we might start to see more generations living together.

#325 Deb on 02.02.15 at 1:21 pm

Although Canada introduced the OAS in 1952, Germany was the first to put the idea into legislation 63 years earlier. In an effort to take some of the wind out of the sails of the Socialists, Chancellor Otto von Bismarck established the OAS in 1889 as a public pension plan for all German workers who had reached the age of 70.
Bismarck knew a lot about economics, the art of diplomacy and compromise, and the importance of the role of life expectancy when crafting public policy.
Life expectancy of Germans in 1889? 70.

#326 Ray Vasquez on 02.02.15 at 1:22 pm

To #13 JacqueShellaque

I agree with you. I don’t know why Paul Martin former Canada’s finance minister is helping with this.

Besides that he is a Liberal but it does does sound like a good idea to me.

I would not be surprised that most Ontario ORPP contributors will get some pension when they are 72 to 75 instead of 65 or 67 years old.

#327 sue on 02.02.15 at 1:26 pm

I was born in 1968 and am currently in the age 62 OAS plan. If the govt chooses to cut back again, will my age group be spared and have it affect the younger generation?

#328 ponerology on 02.02.15 at 1:26 pm

I agree 100%. But lets think about it another way: say the federal government were to scrap OAS tomorrow… wouldn’t that simply shift burden over to existing provincial programs (although i suppose the provinces could cut as well).

#329 kim on 02.02.15 at 1:27 pm

too bad we killed all our kids…

#330 Lessons for Millenials on 02.02.15 at 1:35 pm

http://business.financialpost.com/2015/01/30/the-11-worst-money-habits-of-20-somethings-and-how-to-fix-them/

#331 Setting the Record Straight on 02.02.15 at 1:36 pm

@#223 Capital One on 02.02.15 at 12:15 am
Pinstripe:

The things that were promised to you were made by governments in the 60s when we (the boomers) were about to enter the workforce en masse. It appears they wrote a cheque that is about to bounce.

Another way to look at it – you’re DEMANDING things from people who weren’t even born when the promise was made on their behalf.

CO
*******
But before boomers were voting let alone significant participants. And we’re probably not even aware of these promises.

Of course the problem is the government making promises to redistribute income.

#332 Setting the Record Straight on 02.02.15 at 1:47 pm

@227

at 3:17 pm
——————————————————-
You quote 68% net debt to GDP ratio for all 3 levels of government in Canada.

That’s like saying family income of $100,000 and owing a total of $68,000 (for example, total owing student loan, car and mortgage debt).

*****
No it’s not!
GDP is not the government’s income.

#333 Henry Rearden on 02.02.15 at 1:53 pm

Here’s the truth, so listen in:

1) You can spend your whole life worrying about things outside of your control. Don’t. It will just make you angry. Instead, focus on what you can control. Invest in good companies, lower your expenses, live a minimalistic lifestyle. Read some Harry Browne for some good old-fashioned common sense.

2) Most problems in society are created by government. Income inequality seems to be the focus of the leftists today. Tax corporations they say! But who created income inequality? Governments and Central Banks through the creation of cheap money. Cheap money is great for the wealthy because they are asset owners and cheap money leads to inflated asset prices.

3) I am not a socialist because I prefer a voluntary and peaceful society over those that must use violence to compel citizens. Socialists think short-term regards economics and forget about knock-on effects. People are not stupid. Tax inheritance and people will not pay inheritance taxes – they will simply pay out the money as gifts before they croak. Tax dividends more heavily and people will invest outside of Canada. Socialists seem to think these decisions are made in a vacuum – they are not.

#334 Setting the Record Straight on 02.02.15 at 1:53 pm

@231
#37 Ray Skunk on 02.01.15 at 4:42 pm

Ray, your post reminds me of an old boss of mine that was complaining that he had never ever collected Employment Insurance benefits. In response to his whining I said, “I suppose you would complain as well if you didn’t collect on your life insurance, right?”

******
Wrong!
A Life insurance contract you enter in voluntarily. You are not coerced and your income is not taken. And if it happens to be whole Life , I believe it does have a value
Which can be monetized for your own benefit.

#335 Rob on 02.02.15 at 1:56 pm

Looks like the basement dwellers are wrong again http://www.thestar.com/business/real_estate/2015/02/02/condo-market-bounces-back-across-gta-after-2013-slump.html

#336 Waking Up on 02.02.15 at 2:02 pm

Garth, This post makes me believe that you are not looking to go back in public service. Sad.. Or hopefully there are enough sensible Canadians out there!

#337 Ray Vasquez on 02.02.15 at 2:09 pm

Since governments are strapped for cash, all government workers including politicians that got such sweet deals with their contracts and unions, put a surtax on their government pension income and benefits.

Paul Martin did a surtax on incomes to reduce the deficit in the 1990’s.

A 25% surtax is a good start. This is part of the excess dole too.

I know they will not like this but they did get much, much better benefits, pensions that 90% of the Canadian population would dream of.

#338 Victor V on 02.02.15 at 2:16 pm

Chinese President Xi Jinping just made his first move against Wall Street China

http://www.businessinsider.com/xi-has-just-his-first-move-against-wall-street-china-2015-2

Chinese President Xi Jinping is engaged in a crackdown on corruption in China. He has just made his first move against a major Chinese bank.

Over the past 72 hours, the youngest bank CEO in the country has stepped down, become embroiled in the government’s wide-reaching corruption crackdown, and seen his company’s stock tumble more than 10% on Hong Kong’s stock exchange.

Mao Xiaofeng was the CEO of China Minsheng Bank, a $300 billion company that touts its place as China’s first privately controlled bank. At 42, he was a party secretary in China’s ruling Communist Party with ties to former President Hu Jintao.

Therein, some say, laid the problem.

#339 Jeff on 02.02.15 at 2:21 pm

I see one solution of this mess. Make inflation 20% + a year (make a QE of many billions per month to achieve that). Declare inflation below 3% (cheat on figures if necessary). Keep interrest rates very low.

In 2030, our 500 billion debt will be a joke (after that huge inflation). Winkles pension of $560 a month (with 3% adjustment yearly) will now be worthless.

#340 Apocalypse2014 on 02.02.15 at 2:32 pm

Again, I respectfully disagree with you Garth about the US and its bleak prospects.

“Billionaire Tells Americans to Prepare For ‘Financial Ruin'”

http://www.moneynews.com/Outbrain/Trump-Aftershock-American-Economy/2012/11/06/id/462985/

(Plus, The Donald has better hair than you, Garth. Just sayin…)

You mean the guy who wants to run for president and has a vested interest in trashing the status quo? Most credible. — Garth

#341 Vamanos Pest on 02.02.15 at 2:39 pm

I support providing for the basic needs of those who cannot provide it for themselves. I support caring for the sick. I support investment (yes, investment) in the health, education and welfare of children.

I’m also a one percenter. In personal income taxes, I contribute to our ability to pay for these things at FORTY TIMES the amount the average adult contributes. (not complaining, happy to do it, just stating a fact)

But here’s a hard truth: if an economy does not reward hard work, innovation, investment, and productivity, then these things will disappear from that economy. And all of a sudden, it doesn’t matter if you believe in educating a child, or caring for the elderly, you won’t have an economy strong enough to do either.

At the end of the day, income distribution is not a zero sum situation. You can’t discuss how to “split the pie”. The distribution of wealth is not independent of how much wealth there is to distribute.

Those who complain about unfair wealth distribution aren’t arguing for the provision of basic needs. Their protesting others having more than they do. Those are very VERY different arguments (although they’d have you believe they are one and the same). The former is a moral imperative, the latter is just petty jealousy.

#342 gut check on 02.02.15 at 2:47 pm

side question:

Can anyone explain why Niagara-on-the-Lake is so expensive? Is the availability of a hosted high tea THAT valuable? I don’t get it.

#343 Holy Crap Wheres The Tylenol on 02.02.15 at 2:48 pm

#287 Smoking Man on 02.02.15 at 11:21 am
#275 Holy Crap Wheres The Tylenol on 02.02.15 at 10:21 am
#159 Smoking Man on 02.01.15 at 9:37 pm
Seahawks by 3 my call
_____________________________________________

Stick to your shtick Smoking Man. Football is definitely not your thing.
………

If it wasn’t for the interception on the goal line,last minute of the game, it would have ended with Seahawks by 3.
It was my own fault, I assumed they had it, so I went out for a smoke, turned off my telepathy for a second..
Boom.
_________________________________________
No it was a bad judgement call by Seattle coach Pete Carroll, he made it based on New England’s defensive formation which he massively misread plus two errors that gave the Patriots the yardage to get them out of the end-zone.

#344 Victor V on 02.02.15 at 2:56 pm

http://blogs.wsj.com/economics/2015/02/02/the-u-s-economy-will-soon-see-its-best-years-in-a-decade-federal-forecasters-say/

The White House, Congressional Budget Office and Federal Reserve unanimously see the nation on the cusp of the best years for the economy in a decade or more.

In its latest round of economic forecasts, released Monday with the president’s budget, the White House sees the unemployment rate falling below 5% by the end of 2016, the lowest since before the recession. The White House sees growth of 3% this year and in 2016–the best back-to-back years since 2004 and 2005.

“The U.S. economy has substantial room for growth, although there are factors that could continue to limit that growth in the year ahead,” the White House report said. On the positive side, the report noted declining unemployment, support from Federal Reserve policy, and pent-up demand as consumers regain confidence after nearly seven years of economic doldrums. On the negative side, the report sees lingering effects of the credit crisis and continued weakness in European and Asian economies.

#345 Holy Crap Wheres The Tylenol on 02.02.15 at 2:58 pm

#283 Victor V on 02.02.15 at 11:00 am

http://business.financialpost.com/2015/02/02/nearly-one-in-five-canadian-energy-companies-eyeing-jobs-cuts-as-oil-plunge-bites/?__lsa=0023-d3b2

Nearly one-in-five Canadian oil and gas companies says it may have to cut staff as commodity prices slide, according to a survey published Monday by Mercer LLC, a human resource consultancy.

One-in-four Canadian companies said they won’t be “buying” as much new talent from outside their organization, while one in six plans to freeze or cut compensation. A third of the companies said it was “too early to tell” whether the price decline will impact their operations.

Mercer surveyed 154 companies in North America, including 97 based in Canada, between Dec. 11 and Jan. 15, on the impact of falling prices on hiring intentions.
_____________________________________________

Have we reached bottom? Oil can’t stay that low too long.
http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic

#346 HJD on 02.02.15 at 3:05 pm

The government could significantly help the 99%, and the economy, by simply eliminating taxation on OAS and CPP payments.

#347 HD on 02.02.15 at 3:07 pm

#333 Setting the Record Straight on 02.02.15 at 1:53 pm

@231
#37 Ray Skunk on 02.01.15 at 4:42 pm
Ray, your post reminds me of an old boss of mine that was complaining that he had never ever collected Employment Insurance benefits. In response to his whining I said, “I suppose you would complain as well if you didn’t collect on your life insurance, right?”

******
Wrong!
A Life insurance contract you enter in voluntarily. You are not coerced and your income is not taken. And if it happens to be whole Life , I believe it does have a value
Which can be monetized for your own benefit.

————————

Actually, I believe that Ronaldo’s analogy is correct.

Ronaldo was most likely referring to a term life insurance which is a fair comparison in my opinion.

Would you consider that you are being coerced into insuring your vehicle when you choose to purchase one and drive on the road?

Best,

HD

#348 Getting old on 02.02.15 at 3:08 pm

More people have been skewered by the real estate industry, I would surmise. Your argument that most people cannot be trusted with their own financial futures is actually stunning. If true, society has failed. — Garth

Garth, I am afraid to some extent you are correct.
Education is key to financial success, no substantial effort has been made by government, credit institutions or the educational system to teach students about finances. You would think its a parents role to teach their children, but in more then some cases the parents need to be taught so did the grandparents. Generational financial illiteracy is alive and well in Canada. When will governments put education budgets to good use instead of ivory towers and bloated pensions.

#349 Mister Obvious on 02.02.15 at 3:10 pm

#289 Ray Vasquez

“I think since the government is going to need more tax revenue, it should tax all income the same, capital gains, dividends, interest etc. as ordinary income.
————————————

Think about it Ray. First, interest IS taxed as income as are foreign dividends. People who still have the nerve to invest in Canadian equities deserve a dividend tax credit for their patriotic bravery.

The only reason most Canadians ever had a job is because some entrepreneur was taking a capital risk while others pulled a down weekly paycheck they could take home to their families.

Did you ever risk significant capital so that others could be employed? If you did you would probably be less inclined to scrap the 50% CG exemption.

#350 It's apocalypse hair day on 02.02.15 at 3:11 pm

Yeah I’d trust this idiot any day….

http://uncyclopedia.wikia.com/wiki/File:Donald_Trump_hair.jpg

#351 Holy Crap Wheres The Tylenol on 02.02.15 at 3:12 pm

The USD is going to be in for a hard time as the rest of the world falls to its feet. Try buying good old American equipment and goods with and currency other than USD right now. Just booked for ESARS 2015 International Conference in Germany. In doing so I have had conference’s with about a half a dozen strategic business partners here we all conclude USA manufacturing is really going to suffer with the high USD. Every one of us have now put capitol purchasing plans on hold for the year. The lower CAD hurts us and the USA. Par is fine with all of us here!

#352 Holy Crap Wheres The Tylenol on 02.02.15 at 3:16 pm

#341 gut check on 02.02.15 at 2:47 pm

side question:

Can anyone explain why Niagara-on-the-Lake is so expensive? Is the availability of a hosted high tea THAT valuable? I don’t get it.
_____________________________________________
Pretty Scenery, near water, lots of golfing, sailing and yacht clubs, proximity to the USA, retirees, tourists, sheeple, and drunken gamblers that made a wrong turn after leaving the Casinos in Niagara Falls.

#353 happity on 02.02.15 at 3:16 pm

$52k a year, 35 years from now?

By the way, USA deflation surges to level last seen in Oct 2008, and it’s only January with a long deflation to go.

#354 Holy Crap Wheres The Tylenol on 02.02.15 at 3:21 pm

#2 3rd Wheel on 02.01.15 at 3:42 pm

Millennials eat the Boomers – welcome to the future.
__________________________________________
The future is what was dictated by the past!
Well I’m a Boomer so start by eating my @SS.

Probably will be deleted!

#355 industrial Guy on 02.02.15 at 3:23 pm

News from the U.S. Energy Information Administration
Commercial crude stocks at refineries and tank farms almost 407 million barrels. Highest since August 1982, the year the E I A started collecting data. That’s 44 days of production if you’re wondering.

The highest recorded in US History? 545 million barrels in 1929 !!!

Oh yeah, price of oil in 1929? $1.29 (us) per barrel. It drops to $0.65 cents a barrel two years later.

#356 Bottoms_Up on 02.02.15 at 3:44 pm

#347 Getting old on 02.02.15 at 3:08 pm
++++++++++++++++++++++++++++++
Actually, Ontario does have a financial curriculum for educating grade school students:

http://www.edu.gov.on.ca/eng/document/policy/FinLitGr4to8.pdf

#357 Alex on 02.02.15 at 3:44 pm

Excellent entry Garth … you mirrored my exact thoughts. The problem is most Canadians are concerned with what they are eating tomorrow and not next year, let alone 5-10 years from now. They are spending tomorrows earnings today ! not realizing that tomorrows earnings may not be what they anticipate ! Its a crazy society – its the exact opposite of reasonable – people generally approach finances the same way they approach the issues with the environment – they think it won’t be their problem. I just know there is a major storm coming and there is nothing I or anyone else can do about it – its like watching a train wreck in slow motion AND you told everyone to get off at the stop before – no one did – all you can do is sit back, pop some popcorn, and watch the show !

#358 Kenchie on 02.02.15 at 3:45 pm

“How Americans are spending their Windfall from cheap gas”

http://www.bloomberg.com/news/articles/2015-02-02/how-we-re-spending-our-windfall-from-cheap-gas

#359 maxx on 02.02.15 at 3:47 pm

#48 Trailer George on 02.01.15 at 5:12 pm

“The sense of entitlement in this country is mind boggling. Whether 20 or 60 years old, the majority of the population thinks the government should always be there to manage their finances.”

Agree. The trouble with an obese sense of entitlement, is that far too many rely on someone other than themselves to satisfy it (the “company”, the government, mummy and/or daddy). All too often, it’s the result of over-indulgence and a nearly complete lack of self reliance.

#360 Holy Crap where's the sardines on 02.02.15 at 3:50 pm

But yer better than NY.. yer #1 in the world!

http://www.thestar.com/business/real_estate/2015/01/19/gta-structural-challenges-pushing-housing-prices-out-of-reach.html

#361 Keep em in vodka on 02.02.15 at 3:53 pm

Things are getting serious…

http://www.washingtonpost.com/blogs/worldviews/wp/2015/02/02/russias-economy-is-so-bad-it-has-cut-vodka-prices/?hpid=z10

#362 Bottoms_Up on 02.02.15 at 3:55 pm

#346 HD on 02.02.15 at 3:07 pm
—————————————
Paying into EI is the same as paying health tax or any other government spending that could be classified as providing a social safety net.

I want all my tax dollars back for all the health care I didn’t use!

I want all my tax dollars back for all the firefighters that didn’t have to come to my house!

I want all my tax dollars back for all the roads I haven’t driven on!

Thinking that you deserve to get your EI premiums back because you never used EI is the epitome of self-righteousness.

In Canada we pride ourselves on our social support systems (the US has much of the same social structure…they just don’t use the word ‘social’ cause it’s ‘dirty’). EI is just one such system to mitigate the risk of getting mugged for food money, and to support those in their time of need.

#363 Maurice on 02.02.15 at 3:58 pm

hello Garth,

I have been following your blog, and find it very interesting, funny and educational.

One thing that I have trouble understanding is the following:

When the public buys stocks from a public corporation, say, Apple stock, in the secondary market, which is where most people can buy stock, not a cent reaches Apple company itself. We call it investing but Apple is not getting a cent. We are just transfering a title, i.e. the stocks, from one person to the other. When all the money of the public is chasing after Apple stock, its price can go up, but its not because Apple has invested that extra money and made a profit and sent us dividends, but because there is demand for Apple stock. Why would Apple care about returning on their investments, when the common stockholder is not present in their Board, not even represented well.

https://finance.yahoo.com/q/mh?s=AAPL+Major+Holders

This is the problem, Securities and Exchange Comission and the Canadian equivalent is supposed to police these companies to maximize profits for owners, but the Board and top executives are a revolving door and they pay themselves exorbitant amounts of money.

Suppose that everyone with a stock investment has a bit of Apple stock in it, because its a popular company, but all this money is chasing a fixed number of common stocks, and Apple does not even access this money to grow.

I think its a common misconception that when we buy ETF and mutual funds and stocks, that the money is “invested”. Its just a title changing hands, and it can be also a big bubble, just like the same house changing hands over and over again, with no real investment in the real economy.

The investment bankers do get to be middlepeople in every transaction, so who cares if the bubble is growing, they are making money.

I guess my question is if top executives in a firm don´t even own 5 % of the company, why should they care about returning investment when they can just raise their own compensation to the sky, most of their wealth comes not from stock price increases but from their salary and benefits.

Thoughts?

Thank you,
Mauricio

#364 gut check on 02.02.15 at 4:00 pm

@ #340 Vamanos Pest on 02.02.15 at 2:39 pm

Great post.

Regarding your thoughts on wealth inequality, I agree with your outlook on it if I understand you correctly, however I do have a caveat.

I think that there comes a point when wealth crosses over into obnoxious money hoarding rather than reward for labour / smarts etc. I’m talking about VAST, VAST wealth here, not the 1% club, but the .001% club.

Right now I believe that the .001% are swallowing up the opportunities, ruining the Earth and keeping basic needs away from entire swaths of the population of Earth. As they consolidate it just gets easier for them to eventually have all of it, including yours.

I just wonder what your thoughts are on that, since you say that intervention in personal wealth accumulation amounts to putting the brakes on reward for hard work.

To me there’s a difference between wanting to bust unions because you’re envious of your neighbour who seems to make ‘too much money’ and wanting to see some sort of justice for these money hoarders whose short-sighted greed is literally destroying humanity.

Maybe there’s something I’m missing.

#365 gut check on 02.02.15 at 4:01 pm

lol.. I said ‘Earth’ too many times in my last entry. Makes me sound like I’m not from here.

#366 Victor V on 02.02.15 at 4:02 pm

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/2015/02/02/calgarys-housing-market-under-pressure-as-new-listings-inventory-soar&pubdate=2015-02-02

The Calgary Real Estate Board said Monday January new listings were up 31.7% from a year ago while the inventory of homes rose 113.4% during the same period. A year ago, based on market conditions at the time, there was 1.52 months of supply in the system. At the end of last month, that number was 5.29 months.

The average price of a home in the city dropped 0.51% from a year ago to $460,933 while median price was up 1.08% to $422,000.

The board’s chief economist Ann-Marie Lurie said while listings are climbing with people looking to get out of the housing market, there is no panic selling happening.

“Sales are also down to levels we have not seen in a long time and a lot of that is due to consumer confidence,” said Ms. Lurie. “I wouldn’t say there is panic because people would be fire-selling their houses.”

#367 Pre-Retiree on 02.02.15 at 4:08 pm

#340 Vamanos Pest

His comment is right on the money (no pun intended).
And it sums up more eloquently what I wanted to say.

This applies to all the comments about 1) bloated pensions, 2) tax capital gains, 3) I demand this and that.

Looking forward to reading more comments from Vamanos Pest.

#368 Smoking Man on 02.02.15 at 4:09 pm

#347 Getting old on 02.02.15 at 3:08 pm
More people have been skewered by the real estate industry, I would surmise. Your argument that most people cannot be trusted with their own financial futures is actually stunning. If true, society has failed. — Garth

Garth, I am afraid to some extent you are correct.
Education is key to financial success, no substantial effort has been made by government, credit institutions or the educational system to teach students about finances. You would think its a parents role to teach their children, but in more then some cases the parents need to be taught so did the grandparents. Generational financial illiteracy is alive and well in Canada. When will governments put education budgets to good use instead of ivory towers and bloated pensions.
…..

It’s by design… The dumber the Herd, the better it is for the economy.

Problem is, they’ve been dumbed down so much that it’s actually going to hurt the economy..

#369 Nemesis on 02.02.15 at 4:12 pm

#’HotPot’Seasonings…

[FT] – Austerity bites into China’s new year perks

…”In past years, many employees received grocery store gift cards or expensive foods as gifts. But 60 per cent of respondents in the Zhaopin survey say they will receive nothing from the boss this year, in cash or in kind. The other 40 per cent expect only the lowliest of presents, ranging from bacon to hotpot seasonings, to “a box of condoms and three tablets of Viagra”. …

http://www.ft.com/intl/cms/s/0/8632b6c6-aac5-11e4-91d2-00144feab7de.html?siteedition=intl

#PaganTemples&VikingSacrifices…

[G&M] – A new guard for Asgard: Iceland building first temple to Norse gods in 1,000 years

“I don’t believe anyone believes in a one-eyed man who is riding about on a horse with eight feet,” said Hilmar Orn Hilmarsson, high priest of Asatruarfelagid, an association that promotes faith in the Norse gods.

http://www.theglobeandmail.com/news/world/a-new-guard-for-asgard-iceland-building-first-temple-to-norse-gods-in-1000-years/article22743857/

#HalfTimeExtravaganzas,Or… #AnElevenMinuteLessonIn… #YanquiCulturalMorphology

[NBC] – Katy Perry Super Bowl Halftime Show 2015

http://youtu.be/ZCJiko9vOSY

#TheEschatologyOfFrozenChicken&OutlawDentists…

[LAT] – Dentist arrested on suspicion of trying to burn rival dental practices

http://www.latimes.com/local/lanow/la-me-ln-dentist-arrested-arson-20150201-story.html

[LAT] – Big rigs collide: Frozen chicken scorched, bees flying ‘everywhere’

“Two semis – one carrying frozen chicken, the other hauling crates of bees – collided on the 10 Freeway in Coachella on Monday and caught fire, creating all kinds of complications for morning commuters.”

http://www.latimes.com/local/lanow/la-me-ln-bees-chicken-coachella-crash-20150202-story.html

#370 Bottoms_Up on 02.02.15 at 4:15 pm

#340 Vamanos Pest on 02.02.15 at 2:39 pm
————————————————
It is true the rich pay a lot.

And you’re right, we need to grow overall wealth (that ‘rising tide’ analogy) as part of the answer. But we also have to be sure the bills get paid.

A healthy economy needs a thriving middle class, and guess what? Median income is basically at the poverty line these days. Median income is not middle class.

These people are not able to pay their bills. That’s scary.

#371 Star stuff on 02.02.15 at 4:18 pm

No one’s from earth.. we are star stuff

I hope health care costs are up next.

#372 Bottoms_Up on 02.02.15 at 4:20 pm

#353 Holy Crap Wheres The Tylenol on 02.02.15 at 3:21 pm
——————————————————
That’s OK, Garth’s a boomer so he’ll appreciate the joke and let it be.

It is quite disturbing that generations like to pick on each other. Makes no sense. We’re all in this boat together.

#373 NewworldpartyDotOrg on 02.02.15 at 4:24 pm

This is only one way that the previous and current generations are Stealing from Children. See:

Screwing the Young, Over and Over Again
http://www.newworldparty.org/2012/09/screwing-young-over-and-over-again.html

#374 HD on 02.02.15 at 4:28 pm

@ #361 Bottoms_Up on 02.02.15 at 3:55 pm

We actually agree on this. See my previous posts at #302 and #305. I basically argued that EI is insurance and that we can’t expect to get the money back if we never make a claim.

Best,

HD

#375 rosie "moving forward" in the knowledge that, "this won't end well" on 02.02.15 at 4:53 pm

Take from this what you will.

http://www.freep.com/story/news/local/michigan/oakland/2015/02/01/james-roberston-detroiter-commute-fundraiser/22701087/

#376 Timing is Everything on 02.02.15 at 4:57 pm

#190 Captom

Here ya go Garth. Nice and short. Just the way you like ’em.

“Canada in Recession, US Will Follow in 2015”

http://tinyurl.com/okyaa4h

A recession is two quarters of negative growth. It has not yet happened. Mish is wrong. — Garth

#377 My House is my Friend on 02.02.15 at 4:58 pm

269 Fortune500 on 02.02.15 at 8:38 am

There is one major flaw in your figures. When a OAS pensioner dies there is no principle for him to leave to his estate.

#378 TurnerNation on 02.02.15 at 5:02 pm

400th?

Mike, son, how are your oil shorts doing? I hear it’s going to $20. Get on it.

#379 Three jobs are enough on 02.02.15 at 5:06 pm

Rosie: Well at least he doesn’t have to walk to three jobs every day.

https://www.youtube.com/watch?v=HFsqI5Mkfsk

#380 Incubus on 02.02.15 at 5:16 pm

“A recession is two quarters of negative growth. It has not yet happened. Mish is wrong. — Garth”

Be patient it will happen.

That may be. But this is still incorrect. — Garth

#381 Things could be worse.... far worse. on 02.02.15 at 5:17 pm

https://www.youtube.com/watch?v=DEbZqvMu2cQ

#382 BigM on 02.02.15 at 5:32 pm

Update for the Cowtown Death Watch:

http://business.financialpost.com/2015/02/02/calgarys-housing-market-under-pressure-as-new-listings-inventory-soar/

#383 Setting the Record Straight on 02.02.15 at 5:36 pm

@346
Would you consider that you are being coerced into insuring your vehicle when you choose to purchase one and drive on the road?

*******
Actually you donot have to insure your vehicle. But you do require third party liability. ( in some cases I believe you can self insure)

Certainly there is coercion. One difference is that you can choose to bear the risk of damage affecting you, but you cannot force others to bear the risk of your errors if an accident is your fault.

I do not think term insurance is a better analogy than whole life. Term insurance can be taken in any year you wish it and discontinued thereafter. Whereas UI premiums continue long as you work.

Actually we could do away with third party liability by buying insurance to cover accidents and damages caused by third parties. Uninsured drivers insurance and no fault are examples of this.
Cheers

#384 Setting the Record Straight on 02.02.15 at 5:45 pm

@361
In Canada we pride ourselves on our social support systems (the US has much of the same social structure…they just don’t use the word ‘social’ cause it’s ‘dirty’). EI is just one such system to mitigate the risk of getting mugged for food money, and to support those in their time of need.
$$$$$$$
Why can’t you buy it if you think you need it? You do not have to buy fire insurance or life insurance?

Of course we know with UI there is moral hazard and we know the govt has used UI to subsidize regions and industries.

#385 Rebecca on 02.02.15 at 5:47 pm

I consider myself a liberal and vote accordingly, but Garth’s objections to OAS make perfect sense to me. I want my tax dollars to support the disabled and the very poor who struggle despite their own best efforts. I don’t want to support a perfectly healthy person with a steady job just because they’ve reached the magical retirement age of 65/67. If they can support themselves in retirement, go for it, but I don’t see why age alone gives anyone the right to idleness on another person’s dime.

#386 My House is my Friend on 02.02.15 at 5:48 pm

Jeff on 02.02.15 at 2:21 pm

Its called “financial repression” and the government is doing it right now. How much did $563 buy 20 years ago?

#387 jess on 02.02.15 at 5:56 pm

By Neil Macdonald, CBC News
Republicans gutting Dodd-Frank as Wall St. goes subprime again

…subprime car loans with interest rates of 25 or even 35% are repackaged now for foreign investors
http://www.cbc.ca/news/world/republicans-gutting-dodd-frank-as-wall-st-goes-subprime-again-1.2938552

#388 jess on 02.02.15 at 6:03 pm

maurice

Posted on January 30 2015

The Bureau of Investigative Journalism reported this in March last year:

The US government makes vast interest payments to technology giants including Apple and Microsoft on the billions of dollars they shelter from tax offshore.

A trawl of Securities & Exchange Commission (SEC) disclosures shows that Apple, Microsoft, Google and Cisco Systems hold $163 billion in US government debt, earning these companies substantial sums in interest.

This means American taxpayers in effect pay interest to tech giants on their offshore cash which is held there for tax reduction purposes.

– See more at: http://www.taxresearch.org.uk/Blog/2015/01/30/apple-google-microsoft-and-cisco-massive-funders-of-the-usa-at-a-price/#sthash.xuvLtYdG.dpuf

#389 saskatoon on 02.02.15 at 6:05 pm

#384 Rebecca

or…

the government could just not take the money from you in the first place (i.e., stop thieving) and you could give it to whomever you want (i.e., those deserving).

ahhh…but this isn’t very “liberal”.

#390 james on 02.02.15 at 6:16 pm

#385 Rebecca

I don’t want to support a perfectly healthy person with a steady job just because they’ve reached the magical retirement age of 65/67. If they can support themselves in retirement, go for it, but I don’t see why age alone gives anyone the right to idleness on another person’s dime.

—————————————————————-

You are a fine example of indoctrination circa 1980-2015, Rebecca.

Let’s put the old back in factories. If they die on the job, so be it. Same with the disabled.

What a wonderful world you wet-behind-the-ears millennials will create. You richly deserve all the bad crap you will inherit, with attitudes like yours.

#391 Marco on 02.02.15 at 6:18 pm

#371 @Bottoms up.

“We are all in the same boat.”

Are we though?

http://www.investmentreview.com/expert-opinion/how-baby-boomers-ruined-the-world-6061

“When Boomers get anxious, uncomfortable and unhappy, monetary authorities around the world bend over backwards to accommodate them. Moreover, politicians cannot antagonize them or deprive them of their entitlements because those Boomers represent a big voting bloc.”
“I don’t expect this to end well. Had monetary and fiscal leaders accepted higher interest rates and a recession in previous years, and allowed the economy to reset, we may have been in better shape now. And the longer the pain and sacrifice are delayed, the sharper the economic and financial downturn.”

#392 Mike L on 02.02.15 at 6:32 pm

The Gov’t “told us” back in the early 90’s us GenXer’s might not get OAS or CPP, that sucked. But I don’t want it taken away from those who NEED it. Helping each other out is what Canada and Canadians do best. It’s what sets us apart from others it our selfless concern for each other.

Hand up not hand out is my motto, but some need that hand out to survive and I get that. Maybe we can defer some of the money into hand up programs?

* Garth – We really need some data management system in place to sort these comments. 1 page was fine with under 150 comments but over 300-400 it can be a challenge to read them all.

But congrats on the success!

#393 This places really needs audio on 02.02.15 at 6:41 pm

https://www.youtube.com/watch?v=NzlG28B-R8Y

#394 Rebecca on 02.02.15 at 6:45 pm

#384 Saskatoon

or…

the government could just not take the money from you in the first place (i.e., stop thieving) and you could give it to whomever you want (i.e., those deserving).

ahhh…but this isn’t very “liberal”.

Correct, your system is not liberal, nor is it sensible or practical. the idea you posit creates no system by which to guarantee that the right people get the help they need, as it depends on each person’s arbitrary opinion. Nor do I want to spend my off hours personally deciding how much to give and who to give it to. That’s where I see government playing a role, and why we should lobby for non-ageist management of these funds.

#395 Mark on 02.02.15 at 6:46 pm

Wow, almost another 400 comment day. Tells ya something, doesn’t it?

#396 Rebecca on 02.02.15 at 6:47 pm

You are a fine example of indoctrination circa 1980-2015, Rebecca.

Let’s put the old back in factories. If they die on the job, so be it. Same with the disabled.

What exaggeration and misunderstanding. I specifically said that the disabled and unwell absolutely deserve our support. If someone cannot work at 65, or at 80, or at 30, they deserve help. Not, however, at the arbitrary age of 65 for everyone.

#397 gut check on 02.02.15 at 6:48 pm

@ #352 Holy Crap Wheres The Tylenol on 02.02.15 at 3:16 pm

okay thanks. I guess no one who lives there works there. I was expecting maybe a university that I’d never heard of, or some Government Ministry (CSEC perhaps) to be headquartered there at least. Still, your description fits the tiny town of Gananoque very well and yet RE in Gan is a third the price.

#398 X on 02.02.15 at 6:58 pm

‘Garth, The tax system isn’t fair to those who rely primarily on employment income’

Then don’t spend all of your money, invest some, and create your own revenue stream…..

No sympathy here. Too many people are fiscally irresponsible.

#399 james on 02.02.15 at 6:58 pm

Rebecca #396

If someone cannot work at 65, or at 80, or at 30, they deserve help.

—————————————————————–

You are not helping yourself.

What a bitter, condescending, judgmental attitude you have.

So working 40 years until age 65, or 65 years until age 80 means nothing to you.

Work in the factory until you are not fit to work. That is the only point of your life. Time means nothing.

Let me guess – you are the top 1% in income, the bottom 1% in intellect and empathy?

#400 Mr. Monday Night on 02.02.15 at 7:04 pm

Headed for 400 (or will be by the time my post makes it)…crazy.

Lots of sensationalized opinions on why and how we’re screwed and that there’s no way out. It’d be nice to see some suggestions on what the way ahead should look like to pull ourselves out of this mess.

Are we truly screwed? Are we headed towards some kind of ‘Grapes of Wrath’ existence where millions get displaced? Or will it just be harder and more expensive to go to Disney?

I ask because I’ve been getting it done with a family of four on one salary (sub-$100K) for ten years with very little extras. Are the most concerned those who are going to lose everything and be on the street, or those who may have to drop from three to two SUVs?

#401 brokerbyday on 02.02.15 at 7:07 pm

Garth, you are a marketing guru! Averaging over 300 comments per post =’s approximately 30,000 readers. Nice job!
(radio stations say if 1 listener complains there are about 100 listening that want to complain but don’t take time or make the effort).

#402 Can't we all just get along on 02.02.15 at 7:18 pm

James,

Your comments themselves (to Rebecca) aren’t exactly open or inviting to further discussion… just saying.

#403 Vamanos Pest on 02.02.15 at 7:33 pm

#399 james

you’re hilarious. you reposted rebecca saying

“if someone cannot work at 65, or 80, or 30, they deserve help”

Are you saying you disagree with this? they don’t deserve help?

Even if you don’t agree they deserve help (which is all I can assume from your response) it’s hardly bitter, or condescending, or judgemental.

why don’t you just tell us james, what magically happens when we turn 65 that requires that we stop being productive and simply live off of those who are? In your explanation, show us all why this age is not 61 or 55 or 69 or 73. You clearly imply that this is self-evident, but to me, it looks pretty much arbitrary. Maybe it’s my tiny brain, or my black heart, but I beg you, enlighten me.

#404 Rebecca on 02.02.15 at 7:36 pm

So working 40 years until age 65, or 65 years until age 80 means nothing to you.

Work in the factory until you are not fit to work. That is the only point of your life. Time means nothing.

You’re the one claiming that work should be one’s purpose in life until retirement. Work is not a purpose, or a punishment, it’s part of what we do to get by in life. It’s not a prison sentence to get released from after time served. I have empathy for those who can’t support themselves at any age.

#405 polecat on 02.02.15 at 7:36 pm

Really, I’d be happy to live long enough to have someone wipe my butt,then roll me into the abyss.

#406 Steve-0 on 02.02.15 at 7:37 pm

#399 james on 02.02.15 at 6:58 pm
Rebecca #396

If someone cannot work at 65, or at 80, or at 30, they deserve help.

—————————————————————–

You are not helping yourself.

What a bitter, condescending, judgmental attitude you have.

So working 40 years until age 65, or 65 years until age 80 means nothing to you.

Work in the factory until you are not fit to work. That is the only point of your life. Time means nothing.

Let me guess – you are the top 1% in income, the bottom 1% in intellect and empathy?

—————————————————————–

James, If you had that factory job until you were 65, and cannot afford to retire, that means you were living above your means. Today’s youth will not have your generations luxury of many baby boomers supporting supporting a relatively small number of retires.

You might think you are owed a lot, just because you received a lot all your life, but the numbers will not work anymore. I plan on supporting myself in retirement, and anything the government gives me, I will consider myself lucky.

#407 james on 02.02.15 at 7:38 pm

Vamanos to all the entitled 1%ers.

#408 straight six on 02.02.15 at 7:50 pm

politicians don’t want to correct anything.. they just say they do, so they can chow down on free truffles.

something tells me these blokes aren’t collecting.. well ok, maybe Mick.

#409 KAC on 02.02.15 at 8:21 pm

Marco #320 posted:

“Absolutely no respect to the “greatest generation who lived through a depression and lived and fought through a world war. People that settled in this great country and helped build it. Many who came with nothing and started from scratch. Did you get an inheritance from this generation? Or like many of your generation did you buy a cheap house and watch it appreciate and felt like you won the lottery?”

Here is the rest of that comment, the bit you edited out. It kinda changes your interpretation doesn’t it?

————————————————
“And I was happy to pay, it never occurred to me to whine about paying for old folks who had not contributed, I assumed there was a risk that I might also be old one day, hence the pension plan appealed to me.”
———————————————–

BTW, when I said “contributed”, I meant contributed to the pension plan, not the building of the country. As an active political party member and a former Military veteran I dislike your apparent assumption that all contributions to nation building ended prior to the arrival of the baby boomers, it’s still being done by some people. How many years of service have you devoted to our country?

And as for me winning a real estate lottery, my first home purchse was a very modest apartment with no air-conditioning, no granite and no stainless steel – oh! the depravation!

It was an incredible struggle to make the downpayment and just as hard to make the monthly payments, especially when incomes were so low and taxes so much higher than today.

The current unfortunate situation is an obvious bubble and the market will eventually return to a level where, with great difficulty, it will once again be possible for a youngster to scrape together a deposit and make the seemingly impossible monthly payments on a modest home. Just like when I was young.

When that happens I’m sure you will be whining about the high interest rates but please remember that the boomers experienced years of laughably low incomes along with double digit interest rates, and some of us got hit with rates of over 20%.

Yeah, the boomers always had it easy, that’s why you never see a poor one. Jeesh! How irritating is ignorance?

#410 KAC on 02.02.15 at 8:29 pm

Marco #391 posted:
“When Boomers get anxious, uncomfortable and unhappy, monetary authorities around the world bend over backwards to accommodate them. Moreover, politicians cannot antagonize them or deprive them of their entitlements because those Boomers represent a big voting bloc.”
———————————————-

Those evil old Boomers (your parents & grandparents) pay attention to how the country is being run and they go out and vote. Well Jeez, how unfair is that?

They are so self serving in their efforts to conserve as much of their assets as possible, in order to leave it to you. I say the taxman should grab all their assets when they die and put it into general revenues so everybody can benefit from the Boomer’s “life’s lottery winnings”.

#411 Ronaldo on 02.02.15 at 11:48 pm

#347 HD

Thanks HD. Your right, that is what I was hinting at.

#412 nonplused has his eye on space on 02.03.15 at 12:24 am

The Rolling Stones are all shape shifting aliens from space and easily over 1000 years old each. Why else do you thing they dance so funny?

#413 David Hawke on 02.03.15 at 10:39 am

I have donated my $26,000 annual pension since receiving it (without asking for it). Now, tell what part of my blog a rant. Then you can apologize. — Garth

Fine I apologize for assuming you keep your MP’s pension. Of course you still get a tax credit for donating it but that’s CRA’s rules.

The reason I called your blog post a rant is that the pathetic paltry OAS pittance is not a ‘socialist welfare’ payment as you wrote. OAS is a reward for a lifetime of working, paying taxes and contributing to Canadian society. Canada’s pathetic health (un)care system is also socialist, that’s the Canadian nanny state the majority want.

#414 Steve on 02.03.15 at 2:09 pm

#413 David Hawke on 02.03.15 at 10:39 am

OAS is a reward for a lifetime of working, paying taxes and contributing to Canadian society.

——————————————————————-

When did Canadians become spoiled brats? Kids expect presents for easter, and graduation now. And now their boomer parents expect to be take care of by the government as soon as they hit 65, because Canada had the privilege (??) of having them as a citizen their entire life.

This kind of thinking explains why Canada managed to accumulate so much debt. Dont worry, the next generation will handle it (and I have no doubt they will) while you take your senior poggy while living in florida 3 months of the year.

#415 Richard on 02.03.15 at 4:10 pm

All of the productivity gains of the last 30 years in this country have all gone to the top 1% (or maybe it’s the .01%) So what Garth’s solution: blame the oldies and rob them of their pathetic $560 a month. I have a better idea. Why not institute an estate tax (no it’s not a death tax) on the wealthy to pay for OAS. The very wealthy are the ones benefiting most from our economic system; let them give back a bit at the end.
PS: OAS stands for Old Age Security.

Penalize success. Always a great strategy. — Garth

#416 gut check on 02.03.15 at 6:15 pm

People are so blind. It is NOT the guy next door, the young guy, the old guy, the welfare mom, the unionized factory worker, the public employee or the junkie that is to blame for each of us having to struggle so hard.

Read Animal Farm. If you don’t like to read go listen to it for free on youtube.

There are things happening in this country that the media isn’t reporting on.

The media aren’t reporting on these things because they are owned by the people who benefit from the things you don’t know.

These people benefit SO MUCH by keeping information from you that they have bought the politicians, who in turn make it easier for those same people to keep more and more knowledge, money and power for themselves.

Stop pointing a finger at anyone that you can actually speak directly to. It’s guaranteed that those people are not part of the problem. The real problems are created by cowardly people you can’t easily access. Try and remember that.

#417 Kolbie on 02.03.15 at 9:13 pm

#267 – George, no I’m not referring to a defined contribution plan. The difference between the two is that your employer does not get to dictate anything. You choose the fund (self managed if you like, much more similar to an RRSP), you choose how to invest the money, the money is not taken off your salary but is required in addition to your salary (although salary sacrifice and after tax contributions are allowed to set limits). As it’s in your name, it is able to be moved between different funds, banks and the like without penalty. You can choose where your employers contributions go (to a single investment portfolio or several), and the income it generates in retirement is NOT defined, but is individual based on how YOU invested it over your working career. In essence, it’s an RRSP with required employer contributions. Some employers offer additional matching options. Some don’t (most do). It’s treated like any medical benefits, it’s an additional part of your salary package, not to be taken out of your normal pay.

#418 d on 02.04.15 at 10:13 am

All of the productivity gains of the last 30 years in this country have all gone to the top 1% (or maybe it’s the .01%) So what Garth’s solution: blame the oldies and rob them of their pathetic $560 a month. I have a better idea. Why not institute an estate tax (no it’s not a death tax) on the wealthy to pay for OAS. The very wealthy are the ones benefiting most from our economic system; let them give back a bit at the end.
PS: OAS stands for Old Age Security.

Penalize success. Always a great strategy. — Garth

The success of the 1% came from trampling the 99% on the way!

Canada these days isn’t much different than feudal England with the elite living high on the hog at the expense of the serfs. You can see an example of this in the bus industry where the Brit companies control the majority if the buses and have driven the small Canadian operators out of business!