The wall

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Three years ago the feds dropped this budget bombshell:

The age of eligibility for Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS) will gradually increase from 65 to 67 over six years, starting in April 2023. The ages of eligibility for the Allowance and the Allowance for the Survivor will also gradually increase from 60 to 62.

So, if you were born after 1958, you lose – at least compared to those hatched a few years earlier. And this is probably just the start. Millennials, GenXers and whatever you call 45-year-olds will likely face more cuts in retirement benefits in the years ahead. The reason is simple: we can’t afford it.

Giving every person $563.74 just because they get old and have an income of less than $114,815 (the clawback starts at seventy grand) is incredibly expensive. This year Ottawa will dole out $46 billion in monthly cheques to people who did not contribute to the fund (unlike CPP). This represents about 19% of the entire federal budget, and is forecast to swell steadily as the Boomers rock into their final decades.

Raising the age to 67 will slow it a little, but make little lasting difference to a federal government struggling to escape an annual deficit. The enemy is demographics. When the Boomers were swarming the universities there were seven workers for every wrinklie over 65. In another decade or so there’ll be just two workers contributing to the support of each geriatric hippie.

Worse, we’re living longer. In 1970 women could expect to achieve 76 years, and now it’s 83. Those extra seven years are the most expensive of your life. Over 90% of the health care consumed by a person is administered during the period. And with long life comes an epidemic of dementia, often requiring intensive care. I know. My father died in his eighties, had Alzheimer’s for five years, and required $8,000 a month in 24/7 assistance.

Depressed yet? Don’t be. This just means you should concentrate on making the most of the one asset you cannot earn, buy, borrow or steal. That’s time. And some of the best time is when you can stop working, set your own retirement agenda, chuck the career and follow your nose. But this takes more. More than CPP and OAS, which together average about $14,400 a year.

Following on the discussion here yesterday about the federal political parties’ stands on retirement, the ground is getting well staked. The Cons doubled the TFSA and are also responsible for scaling back the OAS. The Libs would slash the TFSA contribution room and restore the OAS. The orange guys also want the OAS taken back to 65, CPP premiums and payments goosed and would give us low-interest credit cards. (Go figure.)

Well, nobody can live a happy life on $14,400. Meanwhile we’re in a world where defined benefit pension plans are dying and matched-contribution RRSPs are as good as most people are going to get. In our society, over-spending is now rampant, confirmed by historic levels of personal debt. Finally, the real estate obsession has concentrated most middle-class wealth in a single asset which, by all measures, is excessively valued and therefore at risk.

Most people have no idea they’re heading for a wall, since they get their financial advice from the bank and their Mom. God help ‘em. But the facts above won’t change. Governments are in no position to save your ass if you fail to save, invest or diversify.

That means it’s up to you. And me. And this pathetic blog.

In short, do what most people are not. Don’t put all your eggs in one basket (real estate). Use low rates to pay off debt, not pig out on more. Open a TFSA and push it. Use RRSPs to maximize cash flow, spilt income with your spouse or shift tax to low-income years. Never buy a GIC or put heaps of cash into the marmalade place. And if you’re nearing or entering retirement, toss out the rulebook your parents went by.

Traditionally old people have wanted stability, minimal risk and income. But the world has changed into a low-yield, low-growth turgid place where those who live on interest could end up dining with their pets. Our demographic surge has helped shove yields lower – as the population ages demand for fixed income increases, pushing bond prices up and yields down. Given slower global economic growth, and the Boomer tidal wave, this isn’t going to change.

So, you need dividends and capital gains to finance a long retirement – twenty years without a paycheque. This is where a balanced portfolio comes in, with about 60% (or at least 50%) in well-diversified growth assets – such as exchange-traded funds with exposure to equity markets in Canada, the US and elsewhere, plus fixed-dividend preferreds and real estate trusts, as well as a few bonds (government, corporate, high-yield, real return) for stability and income.

So far a couple can shelter more than $80,000 of this inside their TFSAs. Six years from now that will have growth to $200,000. Add in annual tax-free growth, and the outcome could be outstanding.

Or, you could wait for the government. Good luck with that.

181 comments ↓

#1 Marina on 05.18.15 at 5:59 pm

Sounds scary, Garth. Came over to Canada 10 years ago from Russia, and now I am thinking about coming back . Life and economy in Russia are getting the way better than in Canada.

#2 Bryan Mendrum on 05.18.15 at 5:59 pm

Garth, what are the risks if our National Debt gets too high? The USA has a much higher debt than we do so if one of the countries was to suffer first wouldn’t it be the USA because they have more debt than we do? Or can we just go and indebt ourselves to infinity and beyond?

#3 Craig on 05.18.15 at 6:03 pm

Garth, time for your prediction. Who will win the October Federal election?

#4 gladiator on 05.18.15 at 6:04 pm

I would learn a captivating trade that will not be physically strenuous on my body so that I work well into my old age years – part time, of course.
This will keep me entertained, lucid (hopefully), and with one more source of income – in addition to my investment portfolio.

#5 Nemesis on 05.18.15 at 6:05 pm

#StillDazed&Confused…

https://youtu.be/Vef03k5i8VI

#6 mitzerboy aka queencity kid on 05.18.15 at 6:11 pm

Thanks again garth for the priceless insight to the money world …

I am forever grateful

#7 LH on 05.18.15 at 6:12 pm

I’m all for abolishing the OAS
Oldsters have enjoyed an incredible 35 year asset bull market and they collectively own most of the wealth in the country. If you are old and haven’t minted millions yet I call tough boogies!

#8 LH on 05.18.15 at 6:13 pm

Silly autocorrect that should have read tough noogies!
Stop robbing the young to feed the old!

#9 kommykim on 05.18.15 at 6:16 pm

RE:So, if you were born after 1958, you lose – at least compared to those hatched a few years earlier. And this is probably just the start. Millennials, GenXers and whatever you call 45-year-olds will likely face more cuts in retirement benefits in the years ahead. The reason is simple: we can’t afford it.

This what the people born before 1958 want those who were born later to believe. What we cannot afford is to support the early boomers (Those born BEFORE 1958)
It’s an old game, tell the lie over and over and then it becomes the truth.
Yea, I was born after 1958 but not yesterday.

#10 HD on 05.18.15 at 6:20 pm

@ Shaun Allen

Is tomorrow the day?

How does it feel to reach the finish line?

Best,

HD

#11 Marlene from Victoria on 05.18.15 at 6:21 pm

Garth, your basic advice is solid as usual.

“Don’t put all your eggs in one basket (real estate). Use low rates to pay off debt, not pig out on more. Open a TFSA and push it. Use RRSPs to maximize cash flow, spilt income with your spouse or shift tax to low-income years. Never buy a GIC or put heaps of cash into the marmalade place. And if you’re nearing or entering retirement, toss out the rulebook your parents went by.”

Agreed!

But some of the assumptions will be proven wrong.

“So far a couple can shelter more than $80,000 of this inside their TFSAs. Six years from now that will have growth to $200,000.”

Nope. The times they are a changin’. The $10K limit is as good as toast. Enjoy it this year while we can.

Millennials and x/y kiddos will be determining our political fates from here on in. Alberta is a forerunner of the rest of Canada for the next two decades.

The TFSA increase will be cut back.

CPP/OAS/GIS will be restored to 65, and new additions to public pensions like Ontario is proposing will become the norm. This HAS to happen, economically, but soon politically, and so it will. The financial services industry, with exceptions such as yourself, Garth, is ripping off people who do save for their futures with high fees and underperformance. That revolt is just around the corner.

“The reason is simple: we can’t afford it.”

Of course we can. We just have to elect leaders with the political will to close loopholes (this should come first) then raise taxes on those benefitting most from the wealth gap.

That is exactly how the younger groups are now thinking and talking.

Don’t be surprised to see major changes to inheritance laws as well.

For boomers like us who don’t like it? Tough. Go move to a tropical coast. Take a gun with you, and hip waders for the climate change just around the corner. See, Canada ain’t so bad :)

Whether anyone likes this is immaterial – it is a political pre-ordained conclusion based on demographics.

http://news.nationalpost.com/news/canada/canadian-politics/new-poll-puts-federal-ndp-ahead-of-tories-and-liberals-suggesting-race-has-changed-drastically-after-alberta-election

But I would still not put it past Harper and his crooked robocall party to try to subvert democracy once again to extend their rule.

http://news.nationalpost.com/full-comment/stephen-maher-it-could-get-ugly-at-polling-stations-this-fall-thanks-to-fair-elections-act

But in the end, the popular will shall win out.

The worm is turning, and we are the greater fools politically if we invest our financial hopes in the thirty year reign of neoconservative stupidity continuing much longer.

That would be just like thinking real estate will always go up!

#12 pinstripe on 05.18.15 at 6:22 pm

as an old geezer, born in 1926, my experience with the government policies is that non-performance is rewarded and performance is punished.

for example, I saved money all my life because that is what being responsible and accountable was all about, no debt and always putting something aside for the rainy day. In the late 60s and early 70s the government policies started covering everything from cradle to grave. those who didn’t save and stayed in debt all their life are now being rewarded with every social benefit available, whereas those that saved are now faced with every cutback thrown at them. Why am I being punished today for saving? Why are the non savers being rewarded with every benefit linked with COLA adjustments?

For the past 30 years the politicians have earned their title as LIARS. Today the politicians are still setting policies to encourage people to not save and go further in debt. all people as savers should take note of the Bail-In law. The politicians force the people to lose ALL trust and confidence in their policies. the politicians are the biggest abusers of the system with the senate being the biggest pigs at the trough. It is time to boot them out the door.

My advice to the milleniels: don’t worry about saving. live the good life TODAY. those with debt will be forgiven, whereas those with savings could have their savings gobbled up with the Bail-In law. Don’t Worry be Happy!

There is no bail-in law. — Garth

#13 Fed-up on 05.18.15 at 6:23 pm

Giving every person $563.74 just because they get old and have an income of less than $114,815 (the clawback starts at seventy grand) is incredibly expensive.

————————————————————————–

And fat and severely under-funded public sector pensions that are 5-10 times that figure, dished out to many as young as age 53 are beyond catastrophic. But we wouldn’t dare touch or rethink that unmitigated disaster.

Party on.

Some public pensions may be generous, but eliminating them all would not pay for a tiny fraction of OAS. Nice diversion, though. — Garth

#14 Pookie on 05.18.15 at 6:23 pm

Meanwhile, in California…

http://www.bloomberg.com/bw/articles/2014-10-15/chinese-home-buying-binge-transforms-california-suburb-arcadia

#15 Randy on 05.18.15 at 6:30 pm

Looks like a great opportunity for the Federal Liberals to expand the free abortion on demand program to include retroactive abortion on demand. A great way to get rid of proven losers.

#16 Randy on 05.18.15 at 6:32 pm

The Ontario Pension Plan will help save you if you live at least another 40-50 years.

Seriously? After 40 years of contributions under the OPP, a worker who averaged $70,000 a year would have a pension of $10,000 from this plan. It is a payroll tax of roughly 2% on workers and businesses. If it gives people the illusion they need not save, it will be a social disaster. I will give you my assessment in 2055. — Garth

#17 Fed-up on 05.18.15 at 6:32 pm

Some public pensions may be generous, but eliminating them all would not pay for a tiny fraction of OAS. Nice diversion, though. — Garth

———————————————————————–

I never once suggested that they should be eliminated. But revising the amounts paid, age of eligibility and having them correctly funded by those who benefit might be worth looking at.

But since when have we allowed logic and common sense get in our way?

#18 Bobby on 05.18.15 at 6:32 pm

All very good points Garth, but I suspect many people won’t get it. I’m continued to be amazed at the lack of financial literacy among Canadians, especially older Canadians. I had one colleague, a retired professional, wonder out loud how his supposed financial adviser got paid as he has never given them any money. He is with a very high fee fund company. Go figure. In the end, when it all goes pear shaped, who will everyone blame, the government.
I’ve focussed much of my effort on making my children financially aware. They all have TFSA’s and RRSP’s and understand how they will best work for them. Yes, save the tax now with an RRSP but withdraw it when you return to grad school or have a family and aren’t working. Credit cards are good but they are to be paid off at the end of the month.
No, this is not going to end well for many.

#19 John Prine on 05.18.15 at 6:34 pm

#7 LH on 05.18.15 at 6:12 pm
I’m all for abolishing the OAS

Pretty sad attitude, we have all been contributing for decades. For every oldster you see in a Maserati or big motorhome there are 9 others with nothing but OAP and the supplement…Just enough for Kitty Treats. This is why Canada, the States and Western Europe are great places to live. Abolishing the OAP would turn us into more of a third world country a lot quicker than our dear leader is already doing…

#20 espressobob on 05.18.15 at 6:36 pm

Take it from a complete asshole like myself, income streams rock!

#21 Nemesis on 05.18.15 at 6:36 pm

…”…the world has changed into a low-yield, low-growth turgid place where those who live on interest could end up dining with their pets.” – HonGT

#ThereWasAMovieAboutThat… #MPAA”R”

https://youtu.be/YkJV19sxKgc

[NoteToGT: Strictly speaking, that narrative actually begins with in a ‘HighYield’ environment… ]

#22 Realtor007 on 05.18.15 at 6:50 pm

From what I see in the political shift ( too far left) I don’t think it will matter in 30+ years what you have as governments will raid it to prop themselves up at all cost.

#23 Sheane Wallace on 05.18.15 at 6:54 pm

This post is great summary of our future:

1. The entitlement – age discrimination is prohibited by law and we still have the ‘lucky’ one retiring early and the rest – screwed with optional retirement (it will become 70, don’t worry)

2. The ‘free’ heath care and ‘social’ country that requires 8,000 a month for the sick old folks that can’t take care of themselves.

——————–
Well, nobody can live a happy life on $14,400.
———————–
Yes one can, go to Greece or Spain once retired, fantastic weather, that will be enough to live a decent life.

Here 14 k won’t be enough to pay the taxes on the house and the insurance on the car,house,…. Ontario debt retirement charge,… you name it…

———————-
Complete disregard by government for the people, there should be mandatory pension system like Europe, leave less money in people’s hand, this will drive inflation down, encourage investment,……

Sorry, forgot that government will have it’s greedy hands all over the pension funds and probably won’t resist temptation to steal it like they steal future revenue by instituting CMHC and other moral hazard policies.

#24 Nemesis on 05.18.15 at 6:56 pm

#TheOtherMovieAboutThat….

https://youtu.be/aPZ87LqYzlM

#25 Investorz on 05.18.15 at 6:57 pm

10-year interest rate is back up today.

I will admit. Few things excite me more than watching rates go up. I so wish they could be 4% on the 4th of July. Of course that’s only a dream.

If rates keep raising in the US, get your popcorn ready for what Poloz will do.

#26 Sheane Wallace on 05.18.15 at 6:58 pm

#19 John Prine

With the fallout of monetary and fiscal policies (aka nirp, zirp, chmc) etc. OAE could be severely diminished anyway.

#16 Randy

Absolutely agree with Garth, Ontario pension fund is useless, they just look for more revenue in a bankrupt province, at some point money will be merged into the budget and the savers will get close to nothing.

#27 Sheane Wallace on 05.18.15 at 7:06 pm

#12 pinstripe

yep, savers are screwed. There won’t be bail-ins, they will just nicely melt our savings through inflation

When being screwed there are two options – either relax and enjoy it, also send Poloz and Joe thank you letter
or
try to fight it and lose with much more pain.

BTW stating that bail-ins are possible is anti-patriotic, is against the stability of our banking system (the most stable in the world thanks to CMHC) and is probably a criminal offence under the recently approved law amendments.

So suck it up and move on, as I was advised.

#28 David McDonald on 05.18.15 at 7:08 pm

The OAS of $563.74 a month is peanuts but it is still too costly for the government. Garth is right; the savings rate must go up.

Speaking of peanuts; the price of all nuts has skyrocketed. I for one see a lot of inflation and that is another big reason for pensioners to keep invested.

#29 Shawn on 05.18.15 at 7:11 pm

Just Who Contributed to the Old Age Fund?

Giving every person $563.74 just because they get old and have an income of less than $114,815 (the clawback starts at seventy grand) is incredibly expensive. This year Ottawa will dole out $46 billion in monthly cheques to people who did not contribute to the fund (unlike CPP).

*******************************************
If the people collecting the Old Age Pension and particularly those that still have enough income to get into the clawback did not contribute to the old age fund, then just who did? and who does?

I think it is both rude and completely wrong to state that everyone collecting old age pension did not contribute.

In fact those getting hit with clawback are still earning over $70k and still paying taxes and still contributing.

You father may have been able to tell you that when the old age pension system started, income taxes were raised and the deal for the young was you pay taxes now and you collect the pension later.

Yes, it’s beyond rude and also wrong to suggest that those getting hitting with clawback are on the dole for whatever old age pension they still collect.

Those who NEVER worked may be on the dole. Those whop had high incomes over their working lives and who paid high taxes and who still have enough income in retirement to get to the clawback are still paying taxes and certainly paid their share for the old age pension. (Who else would have paid it, those who never worked?)

There are no contributions to the OAS fund, as opposed to CPP. The benefit is universal, and not linked to earned income. Therefore my statement is correct. Park your disgust. — Garth

#30 crowdedelevatorfartz on 05.18.15 at 7:12 pm

Debt vs Saving.

Financial illiteracy meets old age……..

#31 Retired Boomer - WI on 05.18.15 at 7:18 pm

I am in the United Snakes, not Canada.

We face similar problems here. Social (in) security which we have contributed about 6% to our entire working lives, plus whatever defined benefit plan -if any- or the 401-K your RRSP equivalent, if you were smart, you participated and the employer matched a portion of the contribution. Later on the ROTH savings account your TFSA came about the smart tried to max out the $4500 a year $6000 after age 50. We did both to what we could afford, though never really HIGH earners.

We were fortunate, both worked both maxed the ROTH and tried to with the 401-K.

At retirement, me at 60 wife at 62 we have no debt, about $20G in checking earning a huge 2.25% a year and about 750K in investments. We suck-off around 20 grand once a year to supplement the pension, and social
(in)- security. So far that has worked out swimmingly!

Yeah, it’s one of those 65/35 stx/bnd things Garth so often speaks.

Further, we transfer about 30 grand a year from the tax-able to the non-taxable without breaching the next higher tax bracket. Growth going forward with no more taxes!!

The brat can have what’s left -if anything-when we hit room temperature. We’re both 64 this year.

Ask me if I give a rats ass about hitting 80 – No!! I smoke, drink, eat meat, and drive a caddy, or a convertible. I spend what I want, on what I want, give where I want and really don’t give a dam about much nowadays.

I am in the US, the largest single threat to world peace the world has ever seen, in my opinion. I pay our minimum taxes after the accountant gets through fiddling, and I just don’t care anymore. Retired, crippled, and happy.

Not hard, but you have to start sometime. I started in 1987 retired in 2012. 25 years is hardly a lifetime, but get smart or, stay broke!! It is ALL your choice! The government gives you ONLY enough for a meager life.

NEMESIS #5 -GREAT CHOICE- I’ll just sing it ‘young man, look at my life, I was a lot like you are’…

#32 Freedom First on 05.18.15 at 7:19 pm

#22 Realtor007

Yes. And I heard they are coming after you first.

#33 Ray Vasquez on 05.18.15 at 7:23 pm

OAS is fully taxable so it is more like $350 to $400 a month.

C.P.P. is also fully taxable as well so every $800 really becomes $500 to $550 a month.

As for the aging population and demographics situation, equities and real estate will likely be vulnerable too because many will be withdrawing money from their non-registered investments and RRSP’s, RRIF’s for desperately needed income plus a reverse mortgage binge is slowly coming.

Don’t forget all the new ORPP and C.P.P and OAS will likely be raised to 72 to 75 over the next 10 to 20 years.

Gradually, this will be done, as they always do it that way.

We may not be Japan but don’t be surprised if we get closer to them everyday!

#34 mike in sleepy Moncton on 05.18.15 at 7:26 pm

Thanks Garth… don’t know if you have a metric or a mandate but you’ve help me. Thank You and possibly others in my circle;/ with some memorization on my part you made me appear SMRT to my isolated audience!! I accept the rest of the country doesn’t care about us down here but we live the good life for a fraction of our countrymen…. bunch of clowns …. yes I’m feeling pretty cocky for not only listening to clowns like you and other bloggers but actually administering my balanced diversified portfolio to something you’d approve , I’m practically godlike , in my small group of friends, for having some discipline and leveraging time to my advantage…… thanks to you and to some of the commenters here… but wow do you ever attract some real freaks here!

#35 visorman30 on 05.18.15 at 7:29 pm

Totally agree that retirement planning should not just be the house and gov’t payments. I have worked in Ontario’s gov’t for the past 8 years and have one of those defined benefit plans but my concerns are very similar to those you raised re: OAS and CPP. Essentially, I have serious doubts that by the time I retire (I’m currently 32) all the contributions I’m making will not be honored (or will be severely cut back).

Do you think this concern is justified? I hate to think that all the money I put in will not be honored but I’m sure this has happened before.

#36 Detalumis on 05.18.15 at 7:36 pm

Except for one thing, boomers are not your old man. LTC 24/7 is a waste of money just like Gillian Bennett said in her piece “Dead at Noon”. Your old man was typical of his generation, unlike Gillian (an honorary boomer) – deny and deny and the problem won’t surface.

“There comes a time, in the progress of dementia, when one is no longer competent to guide one’s own affairs. I want out before the day when I can no longer assess my situation, or take action to bring my life to an end. There could also come a time when I simply must make a decision based on my deteriorating physical health. I would not want a fall, a stroke, or some unforeseen complication to mess up my decision to cost Canada as little as possible in my declining years.

Understand that I am giving up nothing that I want by committing suicide. All I lose is an indefinite number of years of being a vegetable in a hospital setting, eating up the country’s money but having not the faintest idea of who I am.”

Why anybody would suggest we each save 500K to pay for 5 years of diaper changing is beyond me. For 8K you get an extra couple of changes a day or stick with the public home and just take the super absorbent kind.

Instead of wasting 5 years on futility, just take the SAGE dementia test from the University of Ohio available online, take it every year on your birthday. Start at age 55 or 60. At the very first signs, demand your rights under ‘Carter vs Attorney General’ – cost $20 for the barbiturate medication. Spend your 500K earlier on life on something of value and CHECK OUT EARLY. Do what Emmanuel Ezekiel suggested, don’t get pacemakers or cancer screening or treatment after 70 or so then you WON’T end up a feeble dependent person with zero quality of life.

You are banned from this blog. — Garth

#37 Andrew Woburn on 05.18.15 at 7:39 pm

7 LH on 05.18.15 at 6:12 pm
I’m all for abolishing the OAS
Oldsters have enjoyed an incredible 35 year asset bull market and they collectively own most of the wealth in the country. If you are old and haven’t minted millions yet I call tough boogies!
=====================

I wouldn’t be too quick to bite the government teat. In 15 or 20 years I’m betting hordes of jobless Canadians will be living off it and well before retirement age. Whether it will be perceived as free-loading or a social dividend depends on how we deal with the changes coming at as faster than most are prepared to admit.

By the way, most boomers had far less financial awareness then the millennials now strapping mortgage bombs to their chest. It only looks like a “35 year bull market” from today’s perspective. It felt more like a runaway roller coaster.

#38 Sheane Wallace on 05.18.15 at 7:40 pm

/sarcasm on

#1 Marina

You prefer Russia vs. Canada? Even after we trashed them soundly on the world hockey final and they did not stand to listen to our national anthem (read the Canadian ‘press’ today)

How unpatriotic.

Sigh.

/sarcasm off

#39 North Burnaby on 05.18.15 at 7:45 pm

Garth,

There’s nothing wrong with going all-in with the Vancouver Real Estate… because it has nowhere to go but UP UP UP!!!!

#40 Mark on 05.18.15 at 7:48 pm

Garth, can you recommend any ways the young can, short of leaving Canada, extricate themselves from paying for all these socialist scams to give unearned money to the old?

#41 Shawn on 05.18.15 at 7:57 pm

There are no contributions to the OAS fund, as opposed to CPP. The benefit is universal, and not linked to earned income. Therefore my statement is correct. Park your disgust. — Garth

**************************************
So where is the money coming from to pay the OAS if no one contributed?

And why are you calling a fund? It’s apparently not funded.

I think your view is the same as telling people that paid taxes all their lives that they are getting the dole when they need to use the public health care system.

Tell it to those who never worked not those with incomes high enough to qualify for clawback, those are the taxpayers that do the heavy lifting.

I just don’t think it is either fair or correct to state that those paying the clawback but still getting some residual OAS after taxes and clawback are getting some form of dole.

These people paid their taxes as agreed and if on clawback are still paying taxes. To suggest their OAS is dole is to renege on the deal (and worse, to pretend there was no deal)

If the incremental taxes raised for OAS were not set aside in a fund that is not the fault of the people who paid taxes and are still paying.

I am not exactly disgusted I just want to come to the defense of those who paid in and are now collecting.

To quote some politician or other…

They are entitled to their entitlements (and in this case they PAID for the entitlement, and for those on clawback are STILL paying).

#42 Smoking Man on 05.18.15 at 8:00 pm

To hammerd to post

Love everything. Everyone

Its what I do.

#43 kommykim on 05.18.15 at 8:01 pm

RE: #17 Fed-up on 05.18.15 at 6:32 pm
Some public pensions may be generous, but eliminating them all would not pay for a tiny fraction of OAS. Nice diversion, though. — Garth
———————————————————————–
I never once suggested that they should be eliminated. But revising the amounts paid, age of eligibility and having them correctly funded by those who benefit might be worth looking at.

Already being done at the Federal level:
http://www.tbs-sct.gc.ca/pensions/notices-avis/2012-12-14faq-eng.asp#faq4

#44 Randy Randerson on 05.18.15 at 8:04 pm

Funny how most people think TFSA only benefit the rich. But no one ever stopped to think that maybe, just maybe, someday those poor saps will move up the tax brackets and become wealthy themselves, and then can advantage of the $10,000 TFSA annual limit.

#45 joblo on 05.18.15 at 8:05 pm

“Governments are in no position to save your ass if you fail to save, invest or diversify.”

True dat
The whole belief in gubment breeds entitlement.
Kanada turned socialist.
The whole Healthcare thing looms large yet heads in the sand.
As SM posted yesterday seek alternatives, time is running out on this place.

#46 Shawn on 05.18.15 at 8:07 pm

That’s not how it is supposed to work

The enemy is demographics. When the Boomers were swarming the universities there were seven workers for every wrinklie over 65. In another decade or so there’ll be just two workers contributing to the support of each geriatric hippie.

*******************************************
A proper pension fund pays the pension of the retired from the accumulated money that these same people and their employers contributed while working. These funds were invested.

It’s true that if the amount is insufficient then in most pension plans the shortfall is made up be those still working and that is MUCH easier when there are seven workers for each pensioner. But again a proper pension plan targets no such shortfall. The solution to pension shortfalls should be lowering the pensuion payments. Just like int he RRSp, if it don’t grow enough or people leve too long then the amount going out has to decrease.

In the case of the old age pension they started giving out pensions to people who never paid the incremental tax. I believe they decided to keep it as a pay as you go plan and never ever build up the investment fund and make it pref-funded. That’s the fault of government and not of those who paid incremental taxes all their lives to support the old age pension payments of the generation before who truly had not paid in.

It seems to me that the current system of clawback is more than onerous enough and we have no need to ramp up the clawback if that is what is being suggested or to refer to the residual amount as dole.

How nice to take people who worked and paid taxes all their lives and avoided welfare and now accuse them of being on the dole.

#47 kommykim on 05.18.15 at 8:09 pm

RE:#19 John Prine on 05.18.15 at 6:34 pm
#7 LH on 05.18.15 at 6:12 pm
I’m all for abolishing the OAS
Pretty sad attitude, we have all been contributing for decades.

No one “contributes” to their own OAS. It will be paid out of general revenue by the next generation of taxpayers. It should not be abolished though as it is a social contract to take care of those who cannot take care of themselves. It should however start clawing back at a lower income level than $71,592.

#48 Ray Vasquez on 05.18.15 at 8:10 pm

To Investorz #25

The last tome the 10 year Canada bond yields was 4.00% was back in 2008.

I doubt it will reach 4.00% anytime soon but if it does, it will not last long.

A 2.75% to 3.00% 10 year Canada bond is a real possibility incoming years.

#49 Mountain Man on 05.18.15 at 8:11 pm

I paid very high taxes and worked very hard my whole life to support the great social programs in this country. Then, just as I’m ready to collect, the Cons say “sorry, we’re running out of money”.

What happened to the taxes that I’ve been paying for 37 years?!

Of course I’ve saved into my RRSP and TFSA and other areas, but that doesn’t give the government the right to take away what is mine. They moved the goal posts just as I was about to shoot on net. Grrrrrrr!

O, just you wait for the next election when the Cons get their asses fired and the NDP win by promising to restore the cuts to OAS and GIS.

#50 JSS on 05.18.15 at 8:14 pm

My advice to young millenials would be to hang around the Faculty of Medicine or Dentistry, and find a suitable mate there.

There – you’re set.

Next…

#51 Shawn on 05.18.15 at 8:16 pm

My Retirement

@ Shaun Allen

Is tomorrow the day?

How does it feel to reach the finish line?

Best,

HD

**************************************
HD, thanks for remembering, actually Wednesday is my last day and I turn 55 that day.

I could have hung around and continued to collect a lucrative pay check (I better not say from where) and continue to build up my pension but I have enough to go now and so off I go with no regrets.

As Garth said:

“This just means you should concentrate on making the most of the one asset you cannot earn, buy, borrow or steal. That’s time. And some of the best time is when you can stop working, set your own retirement agenda, chuck the career and follow your nose.”

I got myself into a position to do just this…

It took a combination of pension income, RRSP savings and a part-time business but I can at least leave the world of being reliant on the kindness of an employer to keep me around.

#52 Sheane Wallace on 05.18.15 at 8:19 pm

http://krugman.blogs.nytimes.com/2015/05/18/tyrannical-canadian-initiative/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body

#53 Pete on 05.18.15 at 8:24 pm

But the world has changed into a low-yield, low-growth turgid place where those who live on interest could end up dining with their pets. Our demographic surge has helped shove yields lower – as the population ages demand for fixed income increases, pushing bond prices up and yields down. Given slower global economic growth, and the Boomer tidal wave, this isn’t going to change.
++++++++++++

Aren’t you contradicting yourself a bit here Garth? If we are in a world of perpetual low (bond) yields, it means we are also in a world of perpetual low mortgage rates, and thus high house prices….

#54 Mark on 05.18.15 at 8:28 pm

“Aren’t you contradicting yourself a bit here Garth? If we are in a world of perpetual low (bond) yields, it means we are also in a world of perpetual low mortgage rates, and thus high house prices….”

Not necessarily. At some point, even low interest rates don’t keep the prices of assets such as house levitated because there is simply overcapacity. There’s only so many houses needed after all, and once the construction industry has fully supplied the market, prices fall. Which appears to be happening right now.

#55 MikeEdmonton on 05.18.15 at 8:31 pm

Giving every person $563.74 just because they get old and have an income of less than $114,815 (the clawback starts at seventy grand) is incredibly expensive.

HMMMMMM

Pason Systems Corp.

Project: New drilling instrumentation product Industry:Professional, Scientific and Technical Services Purpose: City:Calgary,Alberta Amounts: $167,617

#56 Willy H on 05.18.15 at 8:31 pm

Giving every person $563.74 just because they get old and have an income of less than $114,815 (the clawback starts at seventy grand) is incredibly expensive. This year Ottawa will dole out $46 billion in monthly cheques to people who did not contribute to the fund (unlike CPP). This represents about 19% of the entire federal budget, and is forecast to swell steadily as the Boomers rock into their final decades.
__ __ __ __ __

Nothing at 17% VAT won’t solve!*

The Con’s dropped the GST 2% wiping out billions per year in government inflows when our economy did not require stimulation. There is no reason to think that what went down will not go up and possibly even way up to European VAT levels.

#57 Willy H on 05.18.15 at 8:35 pm

I understand that OAS may be under threat but I can’t wait to watch our politicians justifying austerity while government workers at all levels head off into retirement after putting in their 30 years with guaranteed government pensions at 70% of their highest 5 years of earnings.

The real elephant in the room is not OAS, it’s government and municipal post-retirement benefits are are completely out of line with private sector post-retirement benefits. Many of these folks don’t have to save a dime for retirement. They have won a lottery at our expense.

#58 Interstellar Old Yeller on 05.18.15 at 8:40 pm

Shawn Allen – huge congratulations on your retirement in two days! What a fantastic birthday gift.

#59 Wanton Trollop on 05.18.15 at 8:43 pm

OK, I get the balanced portfolio thing when one is retired,income and security, some capital gain for a better than average Alpo, check. But, why would anyone not retired want bonds of any kind in a negative return environment when rates can only go up from zero and given bonds have a negative correlation to rising rates that will probably not go down again in a generation after the piggish greed of this one. Isn’t that ‘safety’ costing the say ’50’ year old a lot of capital gain over the 15 years before the big sleep?

Bonds are negatively correlated with equities and help quell volatility. The yields are certainly not negative and never will be. The proof is in the performance. — Garth

#60 Vancouver kid on 05.18.15 at 8:44 pm

To Shawn or yawn, want planet are you from ??
Governments do not invest money, therefore your taxes go towards current expenses. When you pay taxes your politician then pays you with your own money to get elected. You want an army and invade other countries, poof we move money over there. You want day care paid for, poof we move money over there. OAS is a budget expenditure that moves money from one pocket to another. It just happens the old wrigglelys are still in control of the polical landscape, so they vote themselves money. No person will get elected by cancelling OAS. OAS was design because there were no pensions and most people died before 70. But somewhere along the line it became an entitlement, its not a right or entitlement period. It should be eliminated to all but the very poor, and I don’t think 70k is poor, reduce it to $35,000 and that’s fair. My advice is the same as Garths save your money and invest and don’t wait for any handouts.

#61 Ronaldo on 05.18.15 at 8:51 pm

#36 KommyKim

”It should however start clawing back at a lower income level than $71,592.”

Actually, it probably should be totally clawed back at that level in my opinion. Many working people today (majority) don’t earn that much normally. Of course, the government would never dare such a move as the backlash would be too great. Even from those earning over 100,000 because they feel it is their right and are entitled to it. The whole pension scheme needs to be revisited and those amounts that are been given out such as the OAS and GIS that nobody contributes to should only apply on a means tested basis, eg: individuals at age 65 earning less that 24000. I doubt that most people would plan their retirement on the basis of collecting such an amount in retirement. We know from past experience that most people do not contribute to RSP or TFSAs nor would they contribute to anything else the government came up with. That’s just the way it is. Unless we come up with a program that forces savings such as an increase in contributions to CPP or some other scheme, this problem will never be resolved. Unfortunately our governments can only see four years ahead and most decisions are based on what we can do to get re-elected, not what’s good for the country as a whole.

#62 Transplant on 05.18.15 at 8:53 pm

#36-Detalumis
You are banned from this blog. — Garth

Thank you Garth for banning this nihilistic, insensitive creep. Please don’t let him back unless he recants his vile post, in which case you could perhaps forgive him and allow him another chance.

#63 Andrew Woburn on 05.18.15 at 8:58 pm

40 Mark on 05.18.15 at 7:48 pm
Garth, can you recommend any ways the young can, short of leaving Canada, extricate themselves from paying for all these socialist scams to give unearned money to the old?
===============

I guess one Modest Proposal would be to kill your grandparents. Or is it only other people’s grandparents that are undeserving?

#64 As Is Old Man on 05.18.15 at 9:13 pm

So much doomer talk. When push comes to shove, the government has the legislative tools (e.g. clawbacks) to address financial distress in society. It won’t be popular with some, but, as Garth points out, those who have not will be in the majority unless of course their voting rights are stripped or they are otherwise hoodwinked. Follow Garth’s advice to lead a better than average life in retirement, but don’t worry about starving or freezing to death in Canada.

#65 AfterTheHouseSold on 05.18.15 at 9:16 pm

#54 Mark
“…the market, prices fall. Which appears to be happening right now.”

Don’t know if you missed the comment and link from:
“Bottom feeding” May 15, 2015
#131 David Lee
He provided a link regarding “sales mix”.

#66 Randy Randerson on 05.18.15 at 9:21 pm

#36 Detalumis on 05.18.15 at 7:36 pm

That’s a bit much. I don’t care if you want to end your life at the end of your own usefulness, it’s your choice, but it’s over the top to suggest other people do it. Good riddance.

#67 bigtown on 05.18.15 at 9:23 pm

It’s weird the Asians are spending their wealth in places like Vancouver and California when it is in their culture and natural tendencies to go outside to the frontiers of the world like the Caribbean and settle and start new businesses. Of course, the Caribbean is going through a soft spot as witnessed by CIBC and ScotiaBank.

I remember back ten years ago when I was doing my Central American tour with my wealthy older sibling(my family has a mix of dirt poor and utlra wealthy…I am the dirt poor of course) anywho we were touring Panama City and bumping into ultra conservative Jews from Israel looking to buy hotels. There were few Asians in Panama and absolutely none in Costa Rico. Really if anyone can pull the Caribbean out of its major funk surely it is the Chinese. They are doing big projects in Nassau, Bahamas but they are abrasive at times when it comes to their hiring locals attitude.

#68 bigtown on 05.18.15 at 9:26 pm

The next federal election will be about the RIGHT TO SAVE or the RIGHT TO BE POOR….only in Canada you say.

#69 Fed-up on 05.18.15 at 9:27 pm

#43 kommykim on 05.18.15 at 8:01 pm

RE: #17 Fed-up on 05.18.15 at 6:32 pm
Some public pensions may be generous, but eliminating them all would not pay for a tiny fraction of OAS. Nice diversion, though. — Garth
———————————————————————–
I never once suggested that they should be eliminated. But revising the amounts paid, age of eligibility and having them correctly funded by those who benefit might be worth looking at.

Already being done at the Federal level:
http://www.tbs-sct.gc.ca/pensions/notices-avis/2012-12-14faq-eng.asp#faq4
——————————————————————————

Thank you for the excellent link. But I think we both know that this does almost nothing to address the greater problem at all government levels. And they refuse to touch those who have and continue to help bankrupt this country.

#70 crowdedelevatorfartz on 05.18.15 at 9:32 pm

@#1 marina

No my little babuscka.
Its still better here.
We have hot water 24/7 in the apartment buildings.
Fresh fruit and veggies in the supermarkets.
Less public drunkeness.

And our politicians still think they arent corrupt oilgarchs

#71 fully supplied market on 05.18.15 at 9:37 pm

#54 Mark
There’s only so many houses needed after all, and once the construction industry has fully supplied the market, prices fall. Which appears to be happening right now.

———-

The market is “fully supplied” at the current price level, not in absolute terms.

Price and mortgage rate are in a sticky bondage for fairly smooth increments.

Unless an external condition changes dramatically: employment level, wage/income level (demand bankruptcy) or money supply level (which can be builder, developer bankruptcy or the entire monetary system, as in the last US crisis).

In Canada there is probably a condo over supply at the current price level and in Alberta an over supply due to a dramatic employment/income level drop.

#72 Made in BC on 05.18.15 at 9:37 pm

And fat and severely under-funded public sector pensions that are 5-10 times that figure, dished out to many as young as age 53 are beyond catastrophic. But we wouldn’t dare touch or rethink that unmitigated disaster.

Party on.

Some public pensions may be generous, but eliminating them all would not pay for a tiny fraction of OAS. Nice diversion, though. — Garth

+++++++++++++++++++++++++++++++++++++

No but fixing a rotten system and firing people will. Simi Sara on CKNW did a show this morning talking about the downtown east side and had a guest on who gave facts and figures about millions and millions of wasted dollars where Govt does nothing. Helps no one. Nothing changes. Millions and MILLIONS of dollars.

I guarantee this happens in thousands of areas of govt throughout the country. This MUST be fixed. Billions are wasted like this. I think saving billions of dollars would put a dent in OAS.

#73 crowdedelevatorfartz on 05.18.15 at 9:39 pm

@#39 North Burnaby
“There’s nothing wrong with going all-in with the Vancouver Real Estate… because it has nowhere to go but UP UP UP!!!!”
+++++++++++++++++++++++++++++++++++

Then put your money where your mouth is. Borrow as much as the bank will lend you and BUY BUY BUY!

Cause you’re a winner!

You remind me of a troll from several years back that infested this blog…. cant it be?

BPOE is that you? My little elevator skunk monkey

#74 Ralph Cramdown on 05.18.15 at 9:48 pm

Another valuable poster goes down swinging.

Maybe I should quit before I get fired, too.

#75 Mark on 05.18.15 at 9:52 pm

“Price and mortgage rate are in a sticky bondage for fairly smooth increments. “

Nope. At a point, oversupply in excess of demand exists, and prices fall. Even with lower rates. The low rates and high prices, at least initially, stimulated the creation of a large amount of additional supply. But at some point, which we’ve clearly reached in Canada, low rates can no longer sustain high prices.

IMHO, BoC policy rates are likely headed lower, but it won’t help arrest the fall in the prices of Canadian housing. Canadian home owners face years of declining house prices, and low interest rates will not be their saviour. For those with low equity, risk premia might even start to rise on account of minimal to negative equity.

#76 Cici on 05.18.15 at 9:59 pm

Thanks again for an awesome post Garth…although I really have to heed your advice soon and get the rest of my funds out of the orange guy’s shorts…procrastination is so easy to play, but such a loser’s game ;-(

#77 Fred on 05.18.15 at 10:06 pm

Garth said: ‘Well, nobody can live a happy life on $14,400’

He’s wrong. A small Okanagan orchardist can live a happy life on that amount – because we don’t get any subsidies from the government any more. We have to learn to be happy with that, some years.

#78 MSM-free Zone on 05.18.15 at 10:13 pm

“….Meanwhile we’re in a world where defined benefit pension plans are dying…..”
_________________________

My CEO (private, profitable company) can’t stand the fact that I still belong to his company’s Defined Benefit pension, and tries to steal it from me on an annual basis in order to feed it to his shareholders.

If he’s successful I’m pretty much screwed, as being a member of a DB pension has severely limited my RRSP contributions in the past.

Ironically, he was recently successful in doubling his own personal DB Pension to $791,300 (per year).

I wonder if he’s even aware of the stress he will be under in the future, knowing he must spend $2,167.95 per day, only to have another $3/4 million show up next year.

The horror, the horror….

If he lives in Ontario, $350,000 of that will be going to help pay for your OAS. — Garth

#79 Don on 05.18.15 at 10:15 pm

I read your post with interest as a friend’s parents in their late 70s were told to (and did) mortgage their home to invest. So I asked a CFA money manager for one of the big banks if this was acceptable (he manages over a billion).
His comment was, in order to borrow and invest, they would have to invest in equities as bonds etc yielded less that the borrowing costs. At that age they should not be taking that risk, esp in year 6 of a bull market.
His final comment was that any CFA that did this would most likely lose their charter as a CFA. Ironically, he had taught the class on ethics just the other day!
As well, you mention the magic of compounding, which at 7 or 8 is amazing. As a reference, the CPPib is using 4 percent as the OLD guide of 7-8 the world used to use is now outdated and very unrealistic. Run your number using 4 and see how amazing your returns are :)
Cheers
Read your blog daily

Selling a home, harvesting tax-free gains, investing carefully and using the investment income for rent is a sounder strategy. — Garth

#80 Hot Albertan Money on 05.18.15 at 10:25 pm

Or, you could wait for the government. Good luck with that.

We’re from the government and we’re here to help

If you hear those words, RUN FOR THE HILLS!!!

#81 jeepers on 05.18.15 at 10:29 pm

“#101 Carpe Diem on 05.18.15 at 12:41 am ”
I had my wife’s buddy (born in Taiwan) visit from Vancouver this weekend.
I told him my thoughts and my recently deleted post.

He laughed lots about it since color, creed or sex don’t mean shit to me … if you are smart you matter … if you are dumb …. I don’t bother.
(Garth … I’m now discriminating on dumb people .. will you know “Deleted” me?) Canadian-born people are dumb. Actually white and dumb. Dumb to a point that they have no clue what dumb is.

He also acknowledged that there are Vancouver areas being bought by mainland Chinese and converted into new homes all over Vancouver!”

Being a Dog … I asked him are locals buying the end-product or are mainland folks buying them?

His pause in words validated Garth’s thesis!

I’m white. So me saying white people people are dumb-asses can’t be racist.

Me saying boomers are ….

I end it here since I would not want be Deleted again.”

You may think you are smart, but your English totally sucks….hopefully Garth can “deleted” you again to spare us from such jibberish…..also does one Taiwanese guy’s views represent the views of the billions of other Asians, and therefore represent reality? Better go back to Stats 101…..

#82 The American on 05.18.15 at 10:38 pm

At #2: Bryan Mendrum, you can’t be serious with your question, are you? Of COURSE the U.S. has more debt than Canada. DUH! Shouldn’t it, though, being the U.S. is ten time the size of Canada in population, over 10 times the GDP, uses Americans’ tax payers dollars to subsidize Canada’s extremely lacking military in way of dollars and weaponry, bails out Canada’s banks, and accounts for 20% of global GDP! Seriously, think about that for a moment… Only 315,000,000 account for 20% of global GDP. If the U.S. goes down, the global economy goes with it. Also, almost forgot to point out the U.S. Dollar is hands down the global reserve currency. This isn’t so much about debt accumulated ny the U.S., as much as it is what the world would do with the U.S. Its a $17.4 TRILLION YEARLY ECONOMY! National debt is about that, too. So what, about a 1:1 ratio? Debt, when partnered with productivity, is not a problem. It’s really that simple. Remember, Canada as a population and as an economy is smaller than some of our states in the U.S.

Hell, that’s a drop in the bucket if you consider Canadian real estate in some markets like Vancouver and Toronto, where houses are 10:1, price to average household income. Now THAT is a real concerning problem, and that doesn’t even account for Canada’s grossly-out-of-hand consumer debt orgy with HELOCs, credit cards, personal loans, boat loans, car loans, etc. to add insult to injury. Canada is a commodity-driven economy, which is not anything great in times especially like this. So, I would quickly point out to you many other countries with far less debt have defaulted well before the U.S. ever will. Think about that, and you have your answer.

#83 Ontario's Left Coast on 05.18.15 at 10:38 pm

Good riddance to the infinitely depressing Detalumis! Actually he’s a she, and her perverted twist on aging has bothered me for quite some time. Good call, Garth.

Now, if we can only get her kicked off the G&M…

#84 AB Boxster on 05.18.15 at 10:39 pm

What is needed is pension reform.

People that do blong to well run pensions benefit from:
-Intellient actuarial plans
-Massive collective funds
-Professional management
-Shared Risk
-Shared benefit

The stupidity of not having portable pensions that workers (and companies) can contribute to and benefit from regardless where they work or if they move jobs etc is the problem.

Currently each individual has to somehow figure out how to invest their own savings, (rrsp, tfsa, dc pension) in the ridiculously volatile world and this is what forces people to stay in GICs or real estate.
Most people do not understand the financial mess of a system and do not feel comfortable putting their hard earned savings in a system they they, and frankly most ‘experts’ really don’t understand.

Some may want to do this, and they may be rewarded.
Good for them.

Why can’t others just contribute throughout their working life to a pension plan (not CPP) that follows them regardless of where they work, and can provide the benefits af being part of large well run plan?
Why are the only two alternatives a government program, or you’re on your own baby?

Yeah I know the banks and independant guys wont like this.
With the current state of affairs the gains are just too high for them boys.

But frankly, they’ve been sucking off the savings of Canadians for 100 years now. Maybe it time to do whats right for the citizens of the country rather than Bay Street.

#85 fully supplied market on 05.18.15 at 10:46 pm

#75 Mark

At a point, oversupply in excess of demand exists, and prices fall. Even with lower rates. The low rates and high prices, at least initially, stimulated the creation of a large amount of additional supply. But at some point, which we’ve clearly reached in Canada, low rates can no longer sustain high prices.

In short: The market is “fully supplied” at the current price level, not in absolute terms.

#86 Interstellar Old Yeller on 05.18.15 at 11:04 pm

The potential medical costs of increased longevity have far-reaching implications. One needs to build up healthy savings because you can’t count on an inheritance (your parents may need every cent for care in their final years), you may wish/need to help in covering those costs, and in your own old age you’ll want the means to have the same standard of care.

Garth, I’m sorry your father and your family went through that experience with Alzheimer’s. Our family has a parent with the same disease and it is hard on everyone. We make sure to note the happy events in our family because there will undoubtably be some sad ones in the coming years.

#87 help pay for your OAS on 05.18.15 at 11:04 pm

#78

If he lives in Ontario, $350,000 of that will be going to help pay for your OAS. — Garth

——

I wonder if that $350.000 becomes available “to help pay for your OAS” at the time when his CEO retires, or is it an over the years compound amount, that was available to invest on a longer term?

#88 El Barto on 05.18.15 at 11:17 pm

Would a Preferred shares ETF (ZPR) or REIT ETF (ZRE) be considered a part of the ‘growth’ portion of a portfolio, or would they be considered in the same ‘income’ category as bonds. They pay a fixed rate, however they seem to have a little more capital appreciation/depreciation movement than bonds. Additionally, would a US Preferred (PFF:US) be considered as a US/Foreign ‘Growth’ portion of a portfolio even though they provide a fixed rate of return? Thnx.

#89 rawdiswar on 05.18.15 at 11:25 pm

So is it shrewd or callous to buy health care providers that pay a dividend, considering the number of boomers who need diabetic socks and electric scooters to get to Dollarama and back?

Might as well make some money off the poor bastards.

#90 John Prine on 05.18.15 at 11:27 pm

7 kommykim on 05.18.15 at 8:09 pm
RE:#19 John Prine on 05.18.15 at 6:34 pm
#7 LH on 05.18.15 at 6:12 pm
I’m all for abolishing the OAS
Pretty sad attitude, we have all been contributing for decades.

By contributing I meant paying taxes every year, I realize it is not funded like CPP.

#91 Henry on 05.18.15 at 11:29 pm

“…face cuts in retirement benefits in the years ahead. The reason is simple: we can’t afford it.”

Nope we simply can’t afford it. We can, however, afford spending 126 BILLION DOLLARS on the F35 fighter jet. No problem paying for that. We have to have it to defend against…?? Iran??; North Korea??; Or the next bogeyman.
But a measly $563 a month to the oldies, no way!

#92 JimH on 05.18.15 at 11:30 pm

Re: National per person debts of the G-20 nations…

http://mashable.com/2014/11/13/compare-debt-g20-nations/

Just for fun!

#93 Simply Put on 05.18.15 at 11:37 pm

The neo-liberalist globalization agenda is, simply put, a cancer; any economy that allows itself to interact with it thereby becomes part of spreading the disease, and will be unable to ward off the cancer. The only parties benefiting are multi-national firms that are prepared to keep moving those parts of their operations to those jurisdications where labour costs are lowests, consumer and environmental protection laws are weakest, and growth potential is highest. Within these jurisdications they have every incentive to prevent the rise in wealth to the local economy from being distributed more fairly and justly, indeed the biggest successes can be gotten in those jurisdictions where capitalist quasi-authoritarian rulers decide on all key economic policies in their self-interest. Neo-liberal globalization has been a faustian bargain presented to consumers. At this stage in world economic development, it is rapidly becoming ever more clear for whom this agenda was really developed. The economic notion that protectionism only hurts countries in the longer run is dead wrong; the key is for countries that within themselves can provide for pretty much all that is needed for their populations to be protectionist towards countries outside the union, in the sense of dealing with goods and services from them only through strictly controlled channels based on democractic decisions (unlike how the EU operates in financial and many economic affairs today). Of course, folks like Garth will try to authoritatively say this is naive, but then again, dear blog readers, do keep in mind that Garth does not have a phd in economics nor one in politics.

#94 lala on 05.18.15 at 11:43 pm

@1 Marina atta girl, blog dogs will not understand you. We are lucky having a away out, but most of blog dogs don’t have 2 citizenships so they are stuck. How many of you pee pees are scared of going to work tomorrow!!!! Shitty feeling eh

#95 Nagraj on 05.19.15 at 12:02 am

Nobody is gonna win an election pushin’ FISCAL RECTITUDE down the voters’ throats.
“My friends, we just can’t afford it.”
Heckler: “How much money the banks make this year, eh? You in bed with the friggin banks or what?!” Heckler 2: “Don’ forgit them there oil companies! Ripoff artists! It’s eat or fill up the damn truck! Bastards!” Heckler 3: “You wanna cut MY mother’s OAS? And I’m gonna cut yer balls off!!!”

The central issue in ANY Canadian election is always SOCIAL JUSTICE. It’s NOT the establishment version of mathematics.

No voter ever lost any sleep worrying about a BALANCED BUDGET. If gov’t deficits and debt were an issue, the people of Ontario for example wouldn’t have slept so much as a wink for years on end.

“But ladies and gentlemen, let’s be reasonable now!” implores the fiscally rectitudinal candidate as he pulls out a spreadsheet to explain his position.
Heckler 3: “Git the rope, boys!”

They strings him up and then the boys and girls dance around the hangin’ tree drinkin beer and whiskey and rye singin’ whatever the Canadian version is of “Ca ira”.

The cops don’t do nuthin cuz they didn’t get a raise.

I love elections. (ALWAYS go with the winner.)

#96 BS on 05.19.15 at 12:04 am

72:

I guarantee this happens in thousands of areas of govt throughout the country. This MUST be fixed. Billions are wasted like this. I think saving billions of dollars would put a dent in OAS.

Of course the government wastes money. Every government, at every level, everywhere around the world wastes money.

The best thing for everyone is to give the government as little money as possible to prevent them from wasting it. OAS is just the government taking your money, wasting a bunch of it, then giving you some of it back minus the part they wasted. That is if they feel like giving it back at all. Maybe in 20 years the government in power might decide to do something different with it. Cut OAS all together.

Things like a TSFA are a blessing. It lets you manage your own money. You have control. Nobody can take it away. No middle man (government) to waste part of it.

I always vote for the government that will take the least amount of my money through taxation. Less waste. More for me to control and manage efficiently myself. The government is not going to stop wasting money. The more government programs the more waste. That is what governments do no matter which one you vote for.

#97 Visitor Number 9 on 05.19.15 at 12:14 am

“…Governments are in no position to save your ass if you fail to save, invest or diversify.”

Umm, yes they are, Governments will simply tax people who have saved, invested, and diversified, and give the money to people who haven’t saved, invested or diversified.

THAT’S THE FACT JACK!

#98 Shawn on 05.19.15 at 12:35 am

National Debt per person

93 JimH on 05.18.15 at 11:30 pm
Re: National per person debts of the G-20 nations…

http://mashable.com/2014/11/13/compare-debt-g20-nations/

******************************************
What are we to make of the fact that, in general, the most prosperous best places to live in the world have the highest per capita debt?

Be careful what conclusions you draw.

Ever met a rich country that did not let some citizens borrow from others?

How many successful and rich people and business owners did it without debt?

#99 millenial1982 on 05.19.15 at 1:00 am

The end goal for most folks is to build a fat investment account through years of diligent and consistent investment, working alongside the power of compound interest to your advantage. A million bucks generates a lot of cash while you sleep. That leaves you flexible to work on your own terms at or near retirement, however you want. That’s stress free living when you need it the most and it’s something I think all young folk should strive to achieve. We all need to keep busy somehow in retirement… physically, mentally and socially. If you don’t you’ll wrinkle and wither all too fast….use it or loose it. Case in point, look at Garth. I don’t think he gives us all this free advice 6 days of the week including vacation days because he has to. He does this because he loves too, that’s what it’s all about.

On the flip side, anyone with half a brain and some free time to think for themselves should realize how the system uses the same principles to work against them. A young person or couple starting out with significant debt loads will find themselves on the opposite side of the coin, slaving away against the interest generated debt on a mountain of it. Now you’re stuck working overtime and coming up with all kinds of creative strategies just to try to keep afloat. That’s sad.

#100 Jay Currie on 05.19.15 at 1:00 am

Sad picture you paint here Garth. But I am not sure the colours are quite dark enough.

The part which is missing is that we are about to enter an age of miracles and wonders in which robots and AI are going to start taking jobs at the margins. Not huge numbers but, rather like the ATM has reduced your visits to Sherry the teller, there are going to be changes. And those changes will mean fewer people tossing into the pot and more people trying to get money out of that same pot.

This will mean that the value of most labour is going to drop. And, as, by and large, our tax base is made up of truck drivers, tellers, teachers and retail clerks and managers, our capacity to raise revenue is going to drop. (And yes we can tax the companies which own the robots and the AI but they will fight back hard and they have the means to find the flaws in the law. Joe truck driver doesn’t.)

The big issue is that people and government are focused on the individual tax payer to provide the money. For that they need jobs. Jobs are going to be a huge issue in the next decade.

You are right about the limits of pensions. But there is a bigger alligator in the swamp. And no one is paying any attention to it.

#101 Tony on 05.19.15 at 1:10 am

Should read for those born after around the middle of the year 1958. The problem with dividends is chasing stock market valuations that have never been higher on record past or present. That can only end in tears for the general public who are as usual the last ones to know.

#102 Winterpeg on 05.19.15 at 1:33 am

An internet financial newsletter claims there is a way for Americans to “piggyback” off the Canadian Social security system:

It is “Agora Financial 5 minute forecast” David Gonigam”

Is this just a bunch of hooey or is it for real? Anybody seen it?

#103 juno on 05.19.15 at 1:46 am

I know alot of the gen x, y and me can’t afford the TFSA, and you would say, the boomers can’t.

But lets face it, if you retire, sell your multi-million Bung, and backdate your TSFA for the past few years, you can easily place 100,000 in a moment in time.

Thats for a couple, but how about doing the same for the kids. Humm, a family of four, kids, all married, distribute the wealth. All the sudden you can stash

4 kids + 4 spouse, + ids 2 + yourself and spouse = 12 multiple by 80,000. Bang that a million dollar all in tfsa. And you have money to spare for years to come. Now collecting 5% in bonds or preferred shares, that is about 50,000 dollars in income each year or 2200 per month to oas and government subsidies… all tax free, which is equiv.. to 80,000 per year.

Nice. once the boomers realize this windfall, they would be foolish to kill the benfits

#104 Dont split the vote on 05.19.15 at 2:25 am

Vote either Cons or Liberals.

The NDP and Greens are there to split the anti Harper vote.

Think for yourselves,.

And the NDP will do surprisingly well in the polls in the coming months courtesy of the corporate media. Don’t buy the BS.

#105 CJ Lizzie on 05.19.15 at 2:42 am

Hi garth, I think I’m confused, are you saying for people who are retired or are close to retirement they should NOT have a majority of their assets in bonds?
Thanks

#106 MSM-free Zone on 05.19.15 at 5:51 am

“….If he lives in Ontario, $350,000 of that will be going to help pay for your OAS. — Garth….”
_________________________

Thanks for the reassurance that I still have OAS to fall back on should my DB pension go south.

However, given my CEO’s and one of his (ex-Nortel) VP’s well documented history of violating Acts of Parliament for their own personal gain, I’m quite certain that $350,000 will end up in a Cayman account and not my OAS.

#107 Eaglebay on 05.19.15 at 6:34 am

#82 The American on 05.18.15 at 10:38 pm

Let’s all move to Wackos, I mean Waco, Texas.

Of course we’re a commodity economy. Want to buy some water?

#108 Eaglebay on 05.19.15 at 6:40 am

#84 AB Boxster on 05.18.15 at 10:39 pm

I can’ wait for the government to run and oversee my life.
I’m tired of being responsible and taking care of myself.

#109 Luis on 05.19.15 at 6:47 am

#94 Simply Put

Amen.

This asymmetry in our economy, the outsourcing to markets and countries by the 1% here, places where employment, health, environmental and social standards do not come close to ours will be our undoing.

That we have come to be hoodwinked into calling this “free trade” shows our wilful blindness and the cunning of right wing politicians.

And as #101 Jay Currie adds, increasing automation will soon be sucking away even more jobs locally while of course adding more to the pay packets of CEOs.

Of course, socialism sucks, we hear them say.

But socialism for the few, that rocks!

#110 DennisW on 05.19.15 at 7:32 am

Don’t understand your advice to never buy GICs but to hold some bonds. Most investors cannot afford individual bonds and their yields are worse than GICs. Bond ETFs never mature and can stay underwater for a long, long time. At least GICs mature at their nominal value.

You do not buy bonds for their yield. — Garth

#111 TurnerNation on 05.19.15 at 8:06 am

So…you want to move to Toronto.
Went to the Ashbridges bay/Woodbine beach fireworks. Expecting family style event of my youth.
Eye opener. 2/3rds of crowd regardless of background – I’m only stereotyping age here – seemed very aggressive or on the prowl.

Police were ready: mobile Central Command Force van posted with high ranking officers in attendance. Supervisors also on scene with Tasers tucked underarm. Roving bands of auxiliary officers. Tight forces of regular uniforms ever where. A wall of bike cops standing. Mounted patrols. Police boats light show. Divisional ATVs on sand patrol.
I must have missed the undercovers.

The kids are alright? Biggest presence since G20 I’ve seen. Smoking man may right…stop listen what’s that sound….

#112 The American on 05.19.15 at 8:25 am

At #108: Eaglebay, thanks for the offer, but I have PLENTY of fresh water. In fact, we have an abundance of it here. So much we may be exporting it to Cali some day. We don’t need water from Canada, you silly goose. U.S. has third highest reserves of potable water on the planet. In case you missed the memo, California doesn’t represent the entire U.S. Is this now what Canadians cling to to feel validated and relevant? It must be what your news and Government are selling you on this year. Hahahahahaha

#113 crowdedelevatorfartz on 05.19.15 at 8:36 am

@#95 lala
“@1 Marina atta girl, blog dogs will not understand you. We are lucky having a away out, but most of blog dogs don’t have 2 citizenships so they are stuck….”
+++++++++++++++++++++++++++++++++++

Ah yes, ramblings from another dual citizen Canadian of convenience.
Lala , you’re a little confused.
It usually works in reverse.
When things go to H-E-DoubleHockeySticks(Hell for you confused dual citizenship folk) in your country of origin you pull out your Canadian passport and squeal to be the first one on the lane back “home”…..

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FCanadians_of_convenience&ei=GS5bVeTGDavlsASQ84Fg&usg=AFQjCNFLGT5_Ls-LNArIYWlCURx7ITvwPA&bvm=bv.93564037,d.cWc

Just sayin’

#114 crowdedelevatorfartz on 05.19.15 at 8:46 am

@#112 Turnernation
“2/3rds of crowd regardless of background – I’m only stereotyping age here – seemed very aggressive or on the prowl….”
++++++++++++++++++++++++++++++++++++

Yeah, seems to be the trend these days. Roving bands of thugs juiced on booze trying to prove how tough they are.
If they were on their own they would be quiet as mice.

Whistler had two seperate unrelated stabbings this weekend. One 19 year old kid dead. Another flown to hospital. Both were groups of kids.
Lots of police presence. To no avail.
Start jailing these little pricks for 10-20 years instead of 3-5 for manslaughter and we might see a reduction in idiotic senseless youth killings OR just give them car keys and let them take themselves out.

#115 Recipe for an NDP Government on 05.19.15 at 9:03 am

It’s still early but things seem to be lining up for an NDP swing at perhaps even a majority federal government, which will address (or try to) many of the retirement issues in today’s post.

What does the NDP have up its sleeve to do this?

1. Reverse CPP/OAS/GIS to 65 (This will be a BIG winner across Canada. People want to be bailed out of tough circumstances as well as their own bad planning)

2. Enhance CPP with or without provincial plans (Same reasons as #1)

3. Shutting down tax perks for the richest

4. Revising the TFSA

5. A national daycare strategy

6. Cancel Canada Post plans for community mailboxes (A big winner for seniors and thirsty-underwear wearers who don’t want to walk miles in the snow every week to get their Canada’s Action Plan junk mail)

7. Trash the tampon tax (Seriously, a much talked about issue for lots of young women, and unfair re: HST on male products)

8. Watch Trudeau bungle a few debates (Will be great to avoid vote splitting)

9. Run against the Senate and Mike Duffy and Harper’s PMO cronies (Perfect timing for the campaign)

10. Treat veterans better, better benefits

11. Help the environment more, use Alberta as a new role model for a balanced approach

12. Protectionist policies for Canadian jobs and industries (Even if it might not work long term, a short term winner in key areas)

13. Investing in more non profit homes for seniors (Lots of house poor seniors already worried)

14. Cultivating the youth vote much better than the other parties (Signs are pointing to higher turnout for those under 25)

15. More programs for women’s equality, pay equity, single parent benefits

There you go. That’s 15 for 2015, just some reasons why the NDP may just surprise this year.

So many of these will also directly address issues around how people can prepare for retirement and the fears they hold about that.

Nothing about real estate of course – all the parties are too timid to address house lust head on.

#116 rosie "moving forward" in the knowledge that, "this won't end well" on 05.19.15 at 9:06 am

Who keeps saying interest rates can’t go up.

http://www.marketwatch.com/story/housing-starts-surge-20-in-april-2015-05-19?link=MW_home_latest_news

#117 Shawn on 05.19.15 at 9:11 am

Why Buy Bonds?

You do not buy bonds for their yield. — Garth

**************************************
Well yield used to be the reason to buy them.

Guess it’s different now?

Now you buy bonds ’cause the price wiggles around before returning to the issue price (which has reduced purchasing power due to inflation)?

Over its life and across how ever many investors own a bond during its life, the ONLY thing it spits off is yield. From that you can deduct trading fees.

If you aren’t satisfied with the yield on a bond, don’t buy it.

Are you REALLY going to buy bonds in the hopes of price appreciation which will only happen if interest rates drop (and will be temporary)?

Are bonds REALLY negatively correlated with equities? All the time?

#118 Herb on 05.19.15 at 9:47 am

#113 The American,

glad you have lots of water, but you need to ship it to where it’s needed. The “bathtub rings” I saw last month in lakes in the South-west are unsightly. Of course it’s only evaporation and lack of rain, but on the other hand, it’s a pretty good indication of what happens when you pump more water than can replenish itself, or of unsustainable development.

#119 Sosuke Aizen on 05.19.15 at 9:52 am

“Well, nobody can live a happy life on $14,400.”

Speak for yourself. Lots of people live happily on $14,400. The person with $12,000 of expenditures, and the person with a million dollars in the bank earning 1.44% interest, for starters. If you think you need a $70,000 retirement income to be happy, you must have a big fat mortgage, buy tons of useless crap, support your adult children, and put your grandchildren through college or private school.

Choices. I would not make yours. — Garth

#120 LP on 05.19.15 at 9:56 am

#62 Transplant on 05.18.15 at 8:53 pm
#36-Detalumis
You are banned from this blog. — Garth

Thank you Garth for banning this nihilistic, insensitive creep. Please don’t let him back unless he recants his vile post, in which case you could perhaps forgive him and allow him another chance.
*****************
How was s/he insensitive? The post referred to a personal choice – one I have often pondered myself in a sort of “what if” way. Having spent the first 45 years of my life expecting to get Huntington’s Disease, believe me when I say I thought of suicide a lot.
I don’t see the reason for banishment here.

#121 Holy Crap Wheres The Tylenol on 05.19.15 at 10:12 am

#113 The American on 05.19.15 at 8:25 am
At #108: Eaglebay, thanks for the offer, but I have PLENTY of fresh water. In fact, we have an abundance of it here. So much we may be exporting it to Cali some day. We don’t need water from Canada, you silly goose. U.S. has third highest reserves of potable water on the planet. In case you missed the memo, California doesn’t represent the entire U.S. Is this now what Canadians cling to to feel validated and relevant? It must be what your news and Government are selling you on this year. Hahahahahaha
____________________________________________
Fourth buddy.
http://www.mapsofworld.com/world-top-ten/world-top-ten-fresh-water-supply-map.html

#122 Jack on 05.19.15 at 10:12 am

$46 billion a year? That is about what we pay in interest on our national debt to private banks. @ near 1% interest rates for now. What happens when interest rate derivatives blow up?? Kaboom! -equities, bonds, real estate!

#123 bdy sktrn on 05.19.15 at 10:18 am

condo bob rennie on cbc now.

“18k fewer sfh in van than 91.”
“sfh inv depleting, demand up”
“give up on sfh dream”

“double laneway homes with title the only possible new source of supply”

#124 Investorz on 05.19.15 at 10:29 am

10Y yield just reached 2.3%.
US housing numbers are better than expected.
Preferred shares and US banks moving up big ($ZUB.CA, $ZPR.CA).

Is this the real thing?

#125 AB Boxster on 05.19.15 at 10:29 am

#109 Eaglebay

——————-
Read the post again.

Gov’t pensions are not the solution.
There is too much incentive for govt to raid pension coffers, as they have shown to do in the past.

How about well run collective pensions, that are portable (regardless of where you work), flexible for members, and have reasonable management costs.

The top 10 pensions in Canada are some of the best run plans in the world.
Massive funds, able to weather economic downturns, with low management costs: created for the benefit of their members, not to designed to feed the hungry financial services industry.

The problem is that the OPP,Caisse de Depot, OTPP, BCImc, etc are only for public service workers.

Some may not like these plans because of the fact that a portion of the funds comes from the employer, ie the government, ie the taxpayer.

But there is no arguing that these are some of the best run funds in the world and do a very credible job of providing retirement funds for their members.

The rest of the public (eg. private sector workers) cannot benefit from the benefits of large well managed, portable pensions.

But pension funds like these are a threat to banks, unless they can get their 3% cut, and whose main goal is to soak the individual and who are working for the Shareholder and in not the person.

The fact that most workers only have access to corporate DB plans (that can be easily underfunded by the company, or which disappear when the company disappears – Nortel) or DC plans which are really just corporate contributions to an RRSP, is ridiculous.

And you are always free to invest as an individual (and likely lose) as much as you want, for yourself.

#126 The American on 05.19.15 at 10:41 am

At #122: Holy Crap Where’s The Tylonol, my source demonstrates the U.S. as #3, only behind Brazil and something obscur, for total renewable water sources, as presented by The World Factbook
http://en.m.wikipedia.org/wiki/List_of_countries_by_total_renewable_water_resources

Your list is specific to fresh water only. There are many technologies to allow for sustainability and conversion for purposes of watering crops, the largest consumption of water supply. Still, 4th place for the U.S. in renewable FRESH water allows the U.S. plenty of breathing room, only 7% less than Canada. As collective renewable water sources are concerned, the U.S. has over 5% more than Canada.

#127 The American on 05.19.15 at 10:44 am

At #119: Herb, I don’t disagree with you. The point is the U.S. Will not be I,porting its water from Canada, an extremely costly proposal. The U.S. Will source it’s water from other areas within the U.S. That have an extreme surplus, as most areas do.

#128 Bottoms_Up on 05.19.15 at 10:44 am

#114 LP on 05.19.15 at 9:56 am
——————————————
Although the post did refer to a personal choice, it also contained a blanket statement of what quality of life is like for those in their final years and what they should do about it. Thus, it is extremely insensitive to the point of being vulgar.

How would they know what life is like for people in their final years?

#129 Ray Vasquez on 05.19.15 at 10:44 am

The problem with pension plans is they are forced down people’s throats.

Give people a choice by making it voluntary. Those that are so in love with pension plans know that the only way it can pay them is to force everyone to fork over money to them.

Pensions are another sneaky way of taxing people like the ORPP. They will increase the age to 75 in the years to come and increase that 1.9% to double too.

#130 saskatoon on 05.19.15 at 11:11 am

#94 Simply Put
#110 Luis

oh man…idiocy does indeed breed itself!

some points to consider:

1. you think that only the “1%” outsources? nope.
2. putting “free trade” in quotes isn’t an argument.
3. left-wing politicians aren’t “cunning”? rhetoric.
4. corporations are a product of government.
5. government cannot mandate productivity.
6. why would a company move to a place where growth potential is lowest? i suppose you want to “force” it to stay…with violence and guns (i.e., more government?)…hmmm? or, offer “incentives” to it…i.e., stealing? how nice and ethical of you!
7. government’s role is to “provide for pretty much all that is needed for their populations”…this is just plain sickening…no comment necessary here.

you left-wing wackjobs are suffering from an acute psychological illness.

this is no joke:

the prolonged standing of a severe, untended, festering inferiority complex is exactly what breeds the sociopathic, left-wing, hollowed out mind.

#131 Doug in London on 05.19.15 at 11:49 am

The first question you may inclined to ask is: why didn’t the government see this crisis coming and increase CPP contributions by a modest amount 30 to 40 years ago? To answer that question all you have to do is remember the whining and bellyaching that followed the government’s decision in 1997 to increase CPP contributions modestly just to keep it afloat.

Meanwhile that same Federal Government has been SCREAMING at us to take better care of ourselves. First it was the increase of allowable RRSP contributions in the early 1990s, next the increase of allowable foreign content in RRSPs last decade, and in 2009 the TFSA. Higher income people have no one to blame but themselves if they didn’t save enough for retirement. The bad news is it’s going to be difficult for lower income people with no pension who never had the money to save.

Expect to see a lot of older people in the work force for years to come. So, where’s this labour shortage that last decade so many self proclaimed geniuses said was coming?

#132 pinstripe on 05.19.15 at 11:49 am

it is impossible to educate the masses in financial literacy.

I purchased and sold houses, farms etc using FSBO. anyone not knowing the system in buying and selling houses, farms, etc deserve the real estate agency they pick.

I invested in stocks, bonds using self educated practices and have been successful. anyone not knowing the system in the market deserves the financial agency they pick.

NEVER depend on any level of government to help you. There is a big price to pay for any government assistance.

#133 Doug in London on 05.19.15 at 11:59 am

@Herb, post #119, and The American, post #113:
Whether or not the United States has enough water to meet its own needs, more pipelines or aqueducts will be needed in years to come to deal with regional water shortages like the one we see now in California. That’s good news for pipeline contractors who have been looking for work since the Keystone Pipeline was cancelled and is still anything but a done deal. I’d much rather have a water pipeline on my property than one carrying oil.

#134 Retired Boomer - WI on 05.19.15 at 12:06 pm

#55 shawn

Congratulations on your retirement choices. Yes, having the power of “choices” is simply being the master in control of your money, rather than the slave TO your money.

Might seem like a subtle difference, but is the ability to make ‘choices’ of when, if, and how much you work. Where, and how you live. How you invest your time.

You control your spending, your bills do NOT dictate how you spend your existence to service them.

FREEDOM… isn’t it just unbelievable??

#135 Setting the Record Straight on 05.19.15 at 12:17 pm

“I’m white. So me saying white people people are dumb-asses can’t be racist.”

Actually it is, at least according to current thinking. You have attributed a character trait or intellectual trait to a group of people based on race or ethnicity. However in Canada Caucasians are not a protected group so you will not find yourself in a kangaroo court somewhere. Your own origins do not matter. It’s also racist to say Chinese are smart or. Germans are hard working. Remember if group x are smart, that implies group y are stupid.
Nor does truth or accuracy matter. Proving group y on average does poorly on IQ Tests w I’ll not help you.

#136 Made in BC on 05.19.15 at 12:36 pm

13. Investing in more non profit homes for seniors (Lots of house poor seniors already worried)

14. Cultivating the youth vote much better than the other parties (Signs are pointing to higher turnout for those under 25)

15. More programs for women’s equality, pay equity, single parent benefits

There you go. That’s 15 for 2015, just some reasons why the NDP may just surprise this year.

16. Cut the size of govt. It is stupid big and inefficient. This will save billions of dollars a year and will result in tax cuts for regular joes.

17. Run on an NDP campaign. NOT the THOMAS MULCAIR PARTY – with a small smattering of ndp thrown in there.

This is what is destroying political parties. Who is the next DICTATOR going to be? If they ran on a policy of a party, rather than “the next dictator” they would get more votes.

#137 LP on 05.19.15 at 12:54 pm

#129 Bottoms_Up on 05.19.15 at 10:44 am
#114 LP on 05.19.15 at 9:56 am
——————————————
Thus, it is extremely insensitive to the point of being vulgar.
*********************
Okay, I accept that you see insensitivity and vulgarity. But – if those two factors are grounds for banishment – then at any given time about 25 percent of the postings on this board would qualify.

#138 Paul on 05.19.15 at 1:01 pm

#121 LP on 05.19.15 at 9:56 am

#62 Transplant on 05.18.15 at 8:53 pm
#36-Detalumis
You are banned from this blog. — Garth

Thank you Garth for banning this nihilistic, insensitive creep. Please don’t let him back unless he recants his vile post, in which case you could perhaps forgive him and allow him another chance.
*****************
How was s/he insensitive? The post referred to a personal choice – one I have often pondered myself in a sort of “what if” way. Having spent the first 45 years of my life expecting to get Huntington’s Disease, believe me when I say I thought of suicide a lot.
I don’t see the reason for banishment here
———————————————————-Please re-read the blog then read that dip shi**’s comment
It’s as personal as someone could get.

#139 health care cost on 05.19.15 at 1:08 pm

In 1970 women could expect to achieve 76 years, and now it’s 83. Those extra seven years are the most expensive of your life. Over 90% of the health care consumed by a person is administered during the period. And with long life comes an epidemic of dementia, often requiring intensive care. I know. My father died in his eighties, had Alzheimer’s for five years, and required $8,000 a month in 24/7 assistance.

Sorry to hear about the loss of your dad, Garth.
The suffering of my parents was much shorter – I can’t even imagine what you should have gone through.

Something seems off about the health care system cost. My very limited understanding is that there is no treatment for Alzheimer, the $8.000 per month is most likely not spent on “medical” care in a strict sense, but on “personal” care and supervision around the clock, due to lost abilities.

In Ontario a couple making around $90K each, per year takes home about $8.000 per month after tax.
That’s how much is $8.000 per month.

How can any system maintain this cost level – whether it is a private or public arrangement?

#140 devore on 05.19.15 at 1:11 pm

#116 Recipe for an NDP Government

Nothing about real estate of course – all the parties are too timid to address house lust head on.

Why would any politician let a good crisis go to waste?

#141 TurnerNation on 05.19.15 at 1:15 pm

pinstripe can you will me all your worthless and soon to be bailed in fiat currency? Thanks muchly.

#142 devore on 05.19.15 at 1:21 pm

#132 Doug in London

The first question you may inclined to ask is: why didn’t the government see this crisis coming and increase CPP contributions by a modest amount 30 to 40 years ago?

Because the percentage of people who will vote for a party/candidate with policies with a long time horizon, is basically zero. Who wants to increase taxes by a large amount, with no benefit for voters for many many administrations? If they can tweak something that makes people feel richer immediately, that’s what they will do, because that’s what gets votes. Who cares if it blows up 10 or 30 years from now. Somebody else’s problem. And of course, a crisis is a politician’s bread and butter. Who better to solve a “problem” than your friendly government; they’re here to help you.

The best thing government can do, is provide easy ways for individuals to save and invest, and even throw in some minor incentives, which don’t have to be paid for for another 10 or 30 years.

#143 The best thing government can do on 05.19.15 at 1:58 pm

#143 devore
“The best thing government can do, is provide easy ways for individuals to save and invest, and even throw in some minor incentives, which don’t have to be paid for for another 10 or 30 years.”

The more important question is, whether large pooled capital with professional investment management can outperform mom-and-pop investors, playing with their limited TFSA, RRSP, etc. money, on the side, individually?

Because that’s the basic assumption for all government managed retirement funds.

#144 Marie on 05.19.15 at 2:05 pm

Insolvencies on the rise http://www.huffingtonpost.ca/2015/05/19/insolvencies-canada-cibc_n_7314660.html

#145 Ponzius Pilatus on 05.19.15 at 2:15 pm

#74 Ralph Cramdown on 05.18.15 at 9:48 pm
Another valuable poster goes down swinging.

Maybe I should quit before I get fired, too.
——————-
Please keep up posting your intelligent comments.
Shooting the messenger will never get the message across.

#146 Ponzius Pilatus on 05.19.15 at 2:22 pm

#74 Ralph Cramdown on 05.18.15 at 9:48 pm
Another valuable poster goes down swinging.

Maybe I should quit before I get fired, too..
——————–
Please continue to post your intelligent comments.
Shooting the messenger means the message is lost.

#147 Brunett43 on 05.19.15 at 2:24 pm

Housing Crisis Looms As Affordable Units Disappear: Report

http://www.huffingtonpost.ca/2015/05/19/municipal-study-sees-loom_n_7311106.html

#148 Nemesis on 05.19.15 at 2:34 pm

#ElectionLooming,Much?….

[CBC] – Vancouver real estate: Track homes bought by foreigners, says MP Kennedy Stewart

http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-track-homes-bought-by-foreigners-says-mp-kennedy-stewart-1.3078894

#BadMewsForCatLadies…

[CBC] – Feral cats targeted in proposed Trail bylaw
The City of Trail is proposing a new bylaw to ban feeding of stray cats and limit feline ownership

http://www.cbc.ca/news/canada/british-columbia/feral-cats-targeted-in-proposed-trail-bylaw-1.3078868

#AchievableMilestonesForMenOnly…

[Telegraph] – 38 alternative milestones that will define your life: Forget about finding a partner and having children – Telegraph Men reveals the real milestones by which you will define your life when you look back from the comfort of your retirement home

http://www.telegraph.co.uk/men/the-filter/11615073/38-alternative-milestones-that-will-define-your-life.html

#149 young & foolish on 05.19.15 at 2:48 pm

…. When interest rates go back up ….

Will not bonds go down … As well as dividend value stocks … everywhere?

The yield hungry have pushed valuations for everything up, so what to do?

#150 David Lee on 05.19.15 at 3:17 pm

Could it become an election issue? Let’s see where this goes. We already know the Cons don’t like data:

http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-track-homes-bought-by-foreigners-says-mp-kennedy-stewart-1.3078894

#151 jess on 05.19.15 at 3:18 pm

many may never live long enough to collect.

2011 Both sexes

Total, all causes of death 242,074

rank in order
Malignant neoplasms (cancer) 1 72,476 29.9%
Diseases of heart (heart disease) 47,627 19.7
Cerebrovascular diseases (stroke) 13,283 5.5
Chronic lower respiratory diseases 11,184 4.6
Accidents (unintentional injuries) 10,716 4.4
Diabetes mellitus (diabetes) 7,194 3.0
Alzheimer’s disease rank 7 6,356 2.6
Influenza and pneumonia 8 5,767 2.4
Intentional self-harm (suicide) 9 3,728 1.5
Nephritis, nephrotic syndrome and nephrosis (kidney disease) 10 3,294 1.4

#152 whitey on 05.19.15 at 3:28 pm

The American on 05.19.15 at 8:25 am

At #108: Eaglebay, thanks for the offer, but I have PLENTY of fresh water. In fact, we have an abundance of it here. So much we may be exporting it to Cali some day. We don’t need water from Canada, you silly goose. U.S. has third highest reserves of potable water on the planet. In case you missed the memo, California doesn’t represent the entire U.S. Is this now what Canadians cling to to feel validated and relevant? It must be what your news and Government are selling you on this year. Hahahahahaha

You stumble when you use the word “potable”. Not sure if you get far past your own doorstep or even have a passport(54% of Americans don’t) but a large percentage of the fresh water in the US has been poisoned by agricultural runoff. Hike some of America’s great long distance trails and you’re sure to come across water sources that can’t be purified, no matter what you do to them. Ken Burns did a great documentary on the problem in his film about the Chesapeake Bay. Maybe some of your vitriol could be hurled at the polluters instead of the people who comment on this blog.

#153 TurnerNation on 05.19.15 at 3:33 pm

Batman flying around Dollarama stock chart ;–)

#154 MF on 05.19.15 at 3:35 pm

#11 Marlene from Victoria

Lol you have got to be kidding me.

My generation (generation Y) is completely irrelevant in all things politics. Most of us do not vote and are too busy updating their Instagram and Twitter account with pictures of what they ate last night to care.

Most of us even have no idea who is running and what party colour is which. Out of those of us who do decide to vote, most will just vote Green because it’s cool to say that you are pro marijuana, which to my understanding is not exactly the Green’s platform anyways. It is also cool to pretend you are a rebel and that you despise everyone else (who you really know nothing about).

I don’t see this changing any time soon for a long time either. Sorry.

#49 Mountain Man

Lol. TFSA’s, CPP, OAS? Real estate is the only investment the vast majority cares about and under Harper Real Estate has been on fire. To me the NDP is all hot air. I remember listening to the TV debate as a kid in the 90’s with my parents and hearing the orange NDP candidate talk. It all sounded too good to be true…better health care, better roads, more this more that etc. I remember thinking who would not want all that? Well here I am decades later and my more experienced and cynical self now knows that all candidates lie to get elected. Thing is the NDP just doesn’t know where draw the line between fantasy and reality.

I also can’t stand JT. To me the marijuana issue is just pandering to the lowest level of the public, mostly we millennials. And he wants to reduce the TFSA contribution limit?? Ha no thanks. I am voting Con strictly based on the TFSA (and I like Con foreign policy but that is a whole other unrelevant issue to this discussion).

Like Retired Boomer – WI said above:

“Not hard, but you have to start sometime. I started in 1987 retired in 2012. 25 years is hardly a lifetime, but get smart or, stay broke!! It is ALL your choice! The government gives you ONLY enough for a meager life.”

Great post.

The TFSA is a gift from the government to get control of your finances. We need to use it.

MF

#155 Simplu Put on 05.19.15 at 3:38 pm

#131 Saskatoon

The only idiot here is you, full on display for the world. First, I am in fact a self-made multi-millionaire, having created and run several successful businesses. I am far from a socialist, let alone a communist, and would be the last to claim that “government can mandate productivity.” If you would be capable of reading basic english, you would have noticed that my argument is about a more protectionist approach by unions of countries; within these unions a capitalist system should apply, this has nothing to do with socialism.
Different countries or unions can have different economic and political systems, and this is where great caution has to be taken when engaging in trade across such boundaries, especially where they do not have very similar norms, standards, and laws in a whole range of areas that today are hardly given any time of day. There is a lot to say about what that means, but I doubt you have the intelligence and mature patience to understand the nuances and enter into well-reasoned debate. A few examples of your utter inability to parse basic english writing:

– “government’s role is to “provide for pretty much all that is needed for their populations” What I said was that unions in which _companies_ can provide the services and products needed.

– “why would a company move to a place where growth potential is lowest?” As any first-grader would have understood, my point was that companies should not be able to operate outside of the union unless they (and thereby their employees etc abroad) comply with stricter laws than we have in place today. Within the union, companies are free to compete in any way they can and find the biggest-potential opportunities – that is in the interest of all.

I enjoy debating with people who have well-reasoned counter-arguments, but you are clearly not capable of that. Instead, you foolishly or deliberately misinterpret my key points to the point they mean the opposite of what I said, and proceed by attacking those.

Whenever I encounter small-brained people like you, I truly fear for the future of our country.

#156 David White 2 on 05.19.15 at 3:39 pm

Garth. I know I’ve complained about your focus about RE and this may not be on topic but I just read this from CIBC. http://metronews.ca/news/canada/1372403/insolvency-rising-in-canada-cibc-report/

#157 David White 2 on 05.19.15 at 3:44 pm

Re OAS. I know of Europeans who brought their Grand Parents who never paid taxes in Canada to Canada to be live in babysitters and they got OAS !!!!

After 10 years of residency everyone gets it. That’s what a universal benefit means. — Garth

#158 sam on 05.19.15 at 4:05 pm

http://shippingwatch.com/Offshore/article7717312.ece

#159 Nagraj on 05.19.15 at 4:06 pm

Under the influence: I realized today that I’m reading business and political news with this question in the back of my mind: what would Garth make of this?

Well, what is the Poloz Charlottetown oration supposed to be about? (I do understand the FMOC blithereth tomorrow.)

[The CBC site gave a lot of space to a dramatically lit photo portrait of Poloz, making him out to be a highly intelligent man in an impressively pensive mode – kinda like an impecunious wine snob lookin’ over a overpriced list, actually.
Contrast that with the hilariously cartoonish treatment of Yellen in the US.
Pomposity reigns in the Colony, obviously.

More to the point, since when do we halo-ize the central banker in Canada?]

Charlottetown, in case ya didn’t know, is named after a fluffy dessert cake with ladyfinger walls. It’s the capital of FFI (French Fries Island). FFI is an island province of Canada. It has eleven people on it and they’re all named McCain. But their teenage Queen, Anne, has constitutional veto power. Tourists who can’t afford Rome go there a lot.

#160 S.Bby on 05.19.15 at 4:10 pm

Bob Rennie urges Vancouverites to give up on single family home dream:

http://www.cbc.ca/news/canada/british-columbia/bob-rennie-urges-vancouverites-to-give-up-on-single-family-home-dream-1.3079077

And it’s all good for Bob.

#161 give up the dream on 05.19.15 at 4:13 pm

http://www.cbc.ca/news/canada/british-columbia/bob-rennie-urges-vancouverites-to-give-up-on-single-family-home-dream-1.3079077

#162 Luc on 05.19.15 at 4:21 pm

One in five renter spends 50% of income on paying the rent new municipal study says… http://www.ctvnews.ca/business/municipal-study-warns-of-looming-housing-problem-1.2380064

#163 holy Crap Wheres The Tylenol on 05.19.15 at 4:27 pm

#127 The American on 05.19.15 at 10:41 am

At #122: Holy Crap Where’s The Tylonol, my source demonstrates the U.S. as #3, only behind Brazil and something obscur, for total renewable water sources, as presented by The World Factbook
http://en.m.wikipedia.org/wiki/List_of_countries_by_total_renewable_water_resources

Your list is specific to fresh water only. There are many technologies to allow for sustainability and conversion for purposes of watering crops, the largest consumption of water supply. Still, 4th place for the U.S. in renewable FRESH water allows the U.S. plenty of breathing room, only 7% less than Canada. As collective renewable water sources are concerned, the U.S. has over 5% more than Canada.
____________________________________________
Well I guess my source is wrong, oh shit its a US source, dam sorry! Now your going to tell me the USA is bigger than Canada too! Well now I’m taking my toys home and not playing anymore!

#164 Holy Crap Wheres The Tylenol on 05.19.15 at 4:31 pm

#42 Smoking Man on 05.18.15 at 8:00 pm
To hammerd to post
Love everything. Everyone
Its what I do.
___________________________________________
Please don’t stop posting when your hammered, its always interesting!
Here listen to my favorite group from Cambridge UK.
https://www.youtube.com/watch?v=pnYzhKt2BC8

#165 Investorz on 05.19.15 at 4:37 pm

Wall Street Journal:
“Consumer Insolvencies Shift Higher in Canada’s Oil-Patch Provinces”

http://blogs.wsj.com/canadarealtime/2015/05/19/consumer-insolvencies-shift-higher-in-canadas-oil-patch-provinces/

This should accelerate now that “rainy day” funds are running out.

#166 jess on 05.19.15 at 4:42 pm

CIBC reports insolvencies rising for the first time since the recession

The number of Canadians who can’t pay their debts and are being forced into insolvency is on the rise for the first time…
Waterloo Region Record

#167 rosie "moving forward" in the knowledge that, "this won't end well" on 05.19.15 at 4:52 pm

This might explain the jump in the insolvency rate. Maybe Stats Can should look at Huff post for their jobs stats.

http://www.huffingtonpost.ca/2015/05/19/oil-price-oil-jobs-canada-alberta_n_7325994.html

#168 Made in BC on 05.19.15 at 4:54 pm

#162 Luc on 05.19.15 at 4:21 pm
One in five renter spends 50% of income on paying the rent new municipal study says… http://www.ctvnews.ca/business/municipal-study-warns-of-looming-housing-problem-1.2380064
++++++++++++++++++++++++++++++++++++

couple that with stupid high taxes (ALL TAXES) that do not do anything except enrich the public sector and your left with poorer and poorer people.

#169 The American on 05.19.15 at 4:59 pm

At #145: Holy Crap Where’s the Tylonol, of course Canada is larger than the U.S…. In way of area, including water. Canada at 3,855,100 vs U.S. 3,794,100. The U.S. is, however, larger than Canada by measure of land. Canada at 3,511,023 vs U.S. at 3,537,455. All square miles, of course.
http://en.m.wikipedia.org/wiki/Countries_by_area

#170 earthboundmisfit on 05.19.15 at 4:59 pm

Are you not being a tad disingenuous in suggesting that OAS is not paid from contributions? What then are my federal taxes, if not “contributions” to general revenue, from whence OAS is paid.

#171 Adrian on 05.19.15 at 5:15 pm

I like the recent Conservative changes to the TFSA limits — however I can’t bring myself to vote for those socially regressive numbskulls.

#172 happity on 05.19.15 at 5:34 pm

Then there is the TPP trade deal that is Uber secret, to be passed without the people’s knowledge.

It must be so good for the people that Obama is saving it kinda like a birthday surprise right?

#173 NoName on 05.19.15 at 6:45 pm

@The American

You are wrong Canada is bit bigger than USA.

https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html

#174 crowdedelevatorfartz on 05.19.15 at 6:55 pm

@#169 The American

Ahhhhh but we have 1/10th of the U.S. population.
Hence, we have water to sell? Trade?
How’s about we just send water to replenish the rapidly diminishing the Ogalala Aquifer every time Winnipeg has a flood?

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=10&cad=rja&uact=8&sqi=2&ved=0CEIQFjAJ&url=http%3A%2F%2Fwww.washingtonpost.com%2Fblogs%2Fwonkblog%2Fwp%2F2013%2F09%2F12%2Fhow-long-before-the-midwest-runs-out-of-water%2F&ei=B79bVb_mLIq5yQSUloNA&usg=AFQjCNFNceFJRw2uBvVzbYp0OID1DsZgrA&bvm=bv.93756505,d.aWw

Would that be ok with the govt subsidized corn Farm-opolies out there in Big Sky ?

And we thought the Okies had learned how not to turn the greatest, most productive land the world has ever seen into the Sahara in less than 150 years………

#175 The American on 05.19.15 at 8:21 pm

Christ on a cross! Water. Not sure if you all are getting it. Sure Canada has water to sell. That’s not up for debate. What you’re failing to hear is the U.S. As a country has PLENTY of it already! We don’t, nor will we be buying water from Canada. Sheesh. Even if we have ten times the population of Canada, we have actually more renewable water sources than Canada, and enough to sustain our country at FOUR times our population already. OMG. If California needs it, they will be supplied by the many other regions within the U.S. What the hell kind of shit is the media feeding you all up there? It’s freaking laughable.

#176 The American on 05.19.15 at 8:23 pm

At #173: NoName, please re-read my most about the nations’ areas. Then get back with me. Reading comprehension anyone?

#177 The American on 05.19.15 at 8:27 pm

At #152: Whitey, learn the difference between potable and fresh. No stumbling here. You’ll see.

#178 crowdedelevatorfartz on 05.19.15 at 8:59 pm

@#175 The American
California- Drought
Texas- Drought
Alaska- low snow pack possible drought.

Methinks your “endless” water assumptions may be a tad……out dated?

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAA&url=http%3A%2F%2Fdroughtmonitor.unl.edu%2F&ei=L9tbVdfzKZCzyATcj4LgDg&usg=AFQjCNHp0TiTFR_AZlGrnaMujl3t_fCBXQ

#179 Harry Wilson on 05.20.15 at 5:44 am

Hello again, Mr. Turner. As usual, I’m late to the party, so rather than ask the opinion of other dogs who have all moved on by now, I’ll suggest that some discussion of this is included in a future post on senior’s benefits.

I can’t argue against the necessity of OAS or CPP, but the one senior’s perk that irks me is the ‘Age Amount’ federal tax credit, for anyone who was 65 by the end of the tax year. Being a junior senior myself (OAS in 66 months), I’m happy about the tax saving, but I can’t justify it.

For the 2014 tax year, the deduction was $6,916 for anyone earning up to $34,873. Above that amount, it slowly decreases, so that anyone earning $81,000 would not be able to claim it at all. This is in addition to a provincial ‘Age Amount’ deduction, which in Alberta was $4,957 for 2014.

The implication seems to be that being a senior results in greater expenses, especially since nearly all of the federal tax credits are to offset expenses, such as EI contributions, tuition, disability, or volunteer firefighter expenses. I can’t see someone who is 50 years of age, working five days a week and earning $32,000 per year, having expenses $7K lower than someone 65 and retired earning the same $32,000 per year.

I’m guessing that there’s something I’m missing here, or more people would have commented on it by now. I’m looking forward to hearing the opinions of the wiser dogs on this question.

P.S. My sympathies for having to endure comments like #36 above; that was truly a ‘Holy F—‘ moment.

#180 David #1 on 05.20.15 at 9:13 am

Good one Garth. Some helpful info here. Thx

#181 Dup on 05.20.15 at 12:25 pm

If the Liberals take away the TFSA they will never get my vote ever.
TFSA is the best financial tool Canadians got from its Government to date.