The end

TEACHERS modified

Kate and Paul are so typical. Big bucks for the wedding. Bought a house and now the focus, (“like, 100%”, he says) is paying off the mortgage. Neither have corporate pensions, and both expect to job surf for most of their careers. “Whatever we save, they’ll eventually tax the crap out of it. So why bother?” Now in their mid-thirties, making $145,000 between them, they have a plan. A bad one.

So, 65% of us (2011 numbers) have no pension. None. Zilch. Of the rest, 29% have defined benefit plans and about 9% work for companies offering a defined contribution plan. The trend is scary. The feds say from the late 1970s until lately, the number of working men with any kind of pension dropped from more than half to little more than a third. (Pensions for women, in contrast, ticked a little high, since many more work for the government.)

Sure, nobody in their 30s worries much about being in their 60s. But with the cost of houses and kids, the dearth of pensions, plus the paucity of public retirement pogey, it could easily take three decades to grow enough to survive the 25 or 30 years after you quit a paycheque. So Kate & Paul are myopic throwing everything for years at a 2.4% mortgage on an asset that might decline in value and certainly won’t generate an income stream when they start wrinkling.

Thus, it’s time for a little primer on pensions. So stop fidgeting and sit up.

“Many of us have DC pension plans through our work. There’s little understanding of them though,” blog dog Gord says. “What are they? How can we maximize them? In my case I contribute 5 per cent, and my company matches dollar-for-dollar. I can’t pass that up because I can’t ignore the 100 per cent rate of return in year one.

“After that the wheels sort of fall off though. I feel like I don’t get very good returns and the fees are too high. Should I be transferring this out as soon as possible into my SDRSP account? Are there legal or financial barriers for doing this?”

What the heck are DC and DB pensions, anyway?

Ask postal workers – since this is exactly what they’re going on strike about. A defined benefit plan (typically what government workers enjoy) sets in stone a formula determining exactly what a future pension benefit will be. The employer’s on the hook to contribute enough money to keep the plan solvent. All contributions are pooled, managed by an administrator, and employees have nothing to say about how the thing is run. DB plans are gold-plated, but many (like that of the post office) are seriously and dangerously under-funded.

So Canada Post wants to evolve it into a defined contribution plan. Here the employer and employee (typically) both contribute, the money goes into market-based assets like mutual funds and the amount paid out in retirement is unknown until it happens. So, it’s like a glorified RRSP, but one you do not have much influence over. With DB, employers take the risk. With DC, workers do.

How can I max my company’s lousy plan?

Most companies with DC plans hire a mutual fund/insurance outfit like Sun Like, Great West or Manulife, to run them. These guys typically offer employees a choice of their own mutual funds (bond, balanced, aggressive growth etc), and will sometimes nip their inflated fees. So what should you choose? Simple. Make your fund choice complement the investments you have outside your company plan. If you have a balanced approach, a good choice in the plan is a bond fund, because MERs are usually low and then you can manage the growth assets more actively outside. Also check how often (if at all) you can move funds out and into your own RRSP. Do it.

What if I leave my job? What happens then?

DB plans usually keep your money, paying out an earned benefit when you start wearing thirsty underwear. But DC plans travel with you, often becoming regular RRSPs or locked-in plans (LIRAs), which you can’t raid until retirement (exceptions are below). You have the right to move both your contributions and any returns earned on them, and anything the company’s chipped in so long as it is vested (usually happens after a couple of years on the job).

Can I get money out of a pension plan early?

Maybe. Sometimes. The unlocking options include financial hardship (low income or high medical costs, for example) or the fact your doctor says you have a shortened lifespan. Also, if you leave Canada and stay away for two years and are no longer employed by the company whose plan it is. Or, when 55 you can move half a LIRA into an RRSP and withdraw money (taxed). Or, if the LIRA contains a small amount – under approximately $28,000 – and you’re 55, you may cash in the whole plan.

How much is it possible to withdraw then?

All of it, if you move or expect to croak soon. In the case of financial hardship (from not reading this blog) withdrawals may be up to $27,450 if you have no other income, and diminish until nothing is allowed if you earn $41,000 or more.

I’m allowed to commute my pension. Should I?

‘Commuting’ has nothing to do with road rage. It simply means you’re given the right to take a pension (usually a DB one) and remove it from the administrator’s control. For most people this should be done in a heartbeat, even though a portion of it will come as taxable income (it all ends up being taxed, anyway). While it may be scary to leave the womb of a big pension plan, the benefits are compelling. You control your own retirement destiny and income, you can engineer less tax, you escape the danger of being locked into an under-funded plan that could nip benefits, and your family owns the cash, so it can be passed along to a spouse or basement-dwelling, needy Millennials when you expire.

Soon I will tell you how much you’ll need to retire. So prepare.

172 comments ↓

#1 Sassy Matchcombe on 08.28.16 at 2:15 pm

Hi Garthy! First!

#2 Sylar on 08.28.16 at 2:20 pm

Furst. This blog be better than Sunday morning cartoons.

#3 Cloudy on 08.28.16 at 2:32 pm

Great post Garth. I’m lucky to be in a defined benefit plan but still go hard into my TFSA using your investing advice because, hey, you never know. But to all the people without DB pensions, can we point out the benefit is defined but the employer and employee contributions are not? Our pension has seen contribution % rise more than once, and the amount of deductions on my paycheques are substantial. No complaints though, I switched from my previous employment as a subcontractor to have a better family life. Took a hit in the pocketbook (and the benefits of being able to utilize a corporation to pay myself in dividends) but time with the kid is worth everything to me. Thanks for the good post. Should I bother with RRSP’s or just do the TFSA thing and hope my pension is solvent until I die?

#4 LowRent of Arabia on 08.28.16 at 2:38 pm

I had a gold plated DC…left the military…tired of getting shot at…SO decided to hit the road and baddah bing badda bang the whole shebang was in divorce court.

Shed my assets like a reptile sheds skin and started again.

100% offshore out of Justin’s reach. Can’t call it Brain Drain…let’s call it it Brain-dead Drain because I am not conceited.

Happy, not as broke as before, lost my vote, pay no rent, no taxes and as a bonus I don’t have to dodge cross-bow bolts from bank robbers on parole.

Smoking Man is my muse. The ice in my drink is melting and not because of Global Warming…because it’s summer.

#5 David on 08.28.16 at 2:54 pm

“65% of us (2011 numbers) have no pension.” And the postal workers are thinking of going on strike over their champagne pension? They should be satisfied with what they have and not try to hold the rest of us for ransom.

#6 Metaxa on 08.28.16 at 3:04 pm

Soon I will tell you how much you’ll need to retire. So prepare.

Can’t wait!

Actually, since I have done what most people would consider becoming retired I’m quite amazed at how little it takes to continue a lifestyle to which we are accustomed.

Its been at least 30 years since someone else wrote me a paycheque and now five since I actively tried to earn one but we are doing fine on my wife’s annual salary plus some smallish income streams from various business involvements I still hold.
Cash flow is King and multiple streams of income is the Crown Prince…haven’t touched any investments or savings.

Just the past few years we have significantly upgraded our camping/road trip situation, bought Mrs.M a new SUV, done extensive renos to our home, paid huge amounts to lawyers, tax accountants and the CRA and still eat rib eye steaks at $35 the kilo.

Life is good.
If you plan for it to be so…and have some luck along the way that you can recognize and take to your advantage.

#7 Context on 08.28.16 at 3:15 pm

#5 David:- The life of a postal worker in small town Ontario starts with trucks placing mail in the green boxes for a neighborhood. The postal delivery man is having morning coffee at the station while reading a book. He calls a taxi at 11:00 AM taking him to the green box to fill his bag of mail and works both sides of a couple of streets. He is finished his route by 1:00 PM daily with a taxi waiting to take him back to the station where he then takes his lunch break until 2:00 PM. He hands out stamps for a couple of hours and then heads for home early after a long day at work.

#8 NoName on 08.28.16 at 3:25 pm

Sorry that I piggy-back on your question it was just an opportunity not to pass. those 3 question that i added were just destruction,

but
RL vs DR score its not suprizing people tend to click on a 1st choice out of 2 more often, plus it was RL saturday… I believe if question was DR vs RL most likely it would be even split.

and yours stars, 1st and last star are usually discarded as extrimes, so you did good !!! and i get to play mad scientist for a day.

to much google in day to day life
https://moz.com/blog/eye-tracking-in-2014-how-users-view-and-interact-with-todays-google-serps

hawaii as suprise, maybe not…
http://imgur.com/a/qidVc

thank you all free clickers!
ill go ak now in posting random stuf.
thank all you again!!

#9 crowdedelevatorfartz on 08.28.16 at 3:30 pm

The current labour strife with Canada Post and its employees is the tip of the Federal, Provincial and Municipal employee “iceberg.
Underfunded by more than half, subsidized and garanteed by unpensioned( and jealous) private sector taxpayers, and administered by spineless, incompetant politicians too gutless to either end the largess or make govt employees pay their fair share.

These pensions, inevitably with die a death of a thousand cuts, medical prescriptions, cut. Eyewear, cut. Dental,cut. Pension payments, relentlessly cut…..

Enjoy your pension “statements of future earnings” my smug “defined benefit” govt saps…..If you think that money is waiting for you……dream on.
I have swampland in northern Brazil waiting to sell you…..

#10 Nodebt on 08.28.16 at 3:33 pm

#6 Metaxa
Give me some tips to early retirement please!
Thx nodebt

#11 crowdedelevatorfartz on 08.28.16 at 3:39 pm

For all you govt employees in denial.

This article is a few years old but still relevant.

“Few Canadians realize how massive some of these unfunded liabilities are. The most egregious offender is probably the federal government itself. The C.D. Howe Institute recently revealed Ottawa’s unfunded pension liability using government accounting was $148.9 billion at the end of the 2011-12 fiscal year. That’s more than $4,200 for each of the country’s 35 million people, and more than a quarter of the federal government’s entire debt load. (Using “fair value” accounting favored by the C.D. Howe Institute, the unfunded liability is even bigger: $267 billion, or a whopping $7,600 per person.) Many provinces and municipalities also have gaping shortfalls.

While you can expect public service pension credits already earned to be unaffected, future benefits are likely to be curtailed. “Just because your pension is safe doesn’t mean it’s affordable, and it doesn’t mean there won’t be significant pressures to make these deals more cost-effective,” says retired Mercer actuary Malcolm Hamilton, now a senior fellow at C.D. Howe. Future benefits are already getting pared back in several key areas, or contributions are being increased. “It’s a trend that’s coming,” says Alexandre Laurin, associate director of research at C.D. Howe. For example, employees in the main federal government workplace plan will be gradually upping their share of pension contributions from around one-third to half. Also, new federal government hires will be able to retire with unreduced pensions after a long career only at age 60, rather than the 55 enjoyed by current employees.

But the most significant trend may be to remove inflation protection guarantees……….”

Just remember. Denial is not just a river.

#12 WUL on 08.28.16 at 4:00 pm

Well, I can remain on topic. For six years I was on a DC pension plan with one of the providers named by Garth (the one named after that big yellow ball in the sky). I used to lament the fact that while I was taking the risk, I was limited to a menu of mutual funds but in retrospect, that probably rescued me from myself.

I did not bother to try and understand the details of the plan when I left that job, 8 years ago. I simply relied upon the advice of the rep of the company (fine print is for lawyers only). It was placed in a Life Income Fund (LIF – basically a LIRA I guess). I wanted to take out a bunch of money for beer and pizza and was told that I could only take out ½ so I did that. I have a very faint recollection on the tax treatment of those monies but it seems to me that at least some of it was taxed as I received a deduction when my contributions were made (Garth, was it?) See how I need protection and guidance?

The balance remains in 4 mutual funds and I am obliged to receive a minimum of 2.89% of the monies each year (Income Tax Act, I believe). So after receiving 2.89% per year and after fees and expenses of the provider, my principal is up 27%.

Not stellar but I never think about it, look at it twice per year and have not made a single trade over 8 years. My wife is the beneficiary and upon my passing has a few options including a LIF.

I am cobbling together a few sources of cash for my dotage. Richardson Ground Squirrels (gophers) have more meat on them than squirrels.

#13 S.Bby on 08.28.16 at 4:01 pm

What about annuities? A retired guy I know bought one and he’s convinced this is the best thing since sliced bread as he gets a regular payment each month (just like his paycheque was). I don’t see the point myself since you can get the same or better results with ETFs and equities.

#14 Mark M. on 08.28.16 at 4:07 pm

#158 – The American – “
You are claiming Sept. 21 there will be no rate increase. Political suicide before an election, you moron. I won’t be surprised if it doesn’t happen on September 21. As I’ve stated numerous times it will happen before year end with the rate hike. So, stop trying to re-write your argument and put words into an argument that weren’t introduced in the first place.”

Talk about a history rewrite, this ELECTION year started with the claim from many on this forum including you that there would be multiple rate hikes. Most people heard the Fed’s bullshit and thought there’d be four, you know, because the economy is BOOOOMING!

In an election year, four rate hikes means one comes mere weeks before the election, and one comes after. Did you, the Fed, Garth and all the CNBC cheerleaders just find out it was an election year?

They talked about a June rate hike all the while knowing a Brexit vote was coming, then said they couldn’t do it because of Brexit. Still your feeble mind takes them at their word.

And I thought the Fed was apolitical, their mandate is to manage monetary policy regardless of the political fallout. Are you claiming they’re just doing the administration’s bidding?

When on September 21, the screaming graphic on CNBC says “unchanged” I expect a lame attempt on your part at an explanation. Don’t worry, JP and WalMark can help you craft it.

It’s going to be epic.

#15 Context on 08.28.16 at 4:09 pm

#10 Nodebt:- The key to an early retirement is to marry the only child daughter of a very wealthy family.

#16 For those about to flop... on 08.28.16 at 4:17 pm

#8 NoName on 08.28.16 at 3:25 pm
Sorry that I piggy-back on your question it was just an opportunity not to pass. those 3 question that i added were just destruction,

but
RL vs DR score its not suprizing people tend to click on a 1st choice out of 2 more often, plus it was RL saturday… I believe if question was DR vs RL most likely it would be even split.

and yours stars, 1st and last star are usually discarded as extrimes, so you did good !!! and i get to play mad scientist for a day.

to much google in day to day life
https://moz.com/blog/eye-tracking-in-2014-how-users-view-and-interact-with-todays-google-serps

hawaii as suprise, maybe not…
http://imgur.com/a/qidVc

thank you all free clickers!
ill go ak now in posting random stuf.
thank all you again!!

////////////////////////

Hey NoName,I am glad you tried to help me ,not mad.

This blog teaches me all sorts of lessons and you showed me a better way to do it ,but you being ESL keeps it more interesting than it should be.

I am expecting a visit from Harper any day now for us to help him out in his new endeavour.

Gonna tell him to get out of my office,like he told the boss(Probably historically not accurate,but sounds good).

I can now relax, as can Alf Lewenza and the pressure will slowly mount on Robax as the week progresses in the endless pursuit of the perfect blog post.

No one moaned about us trying to find a consensus,it took a little longer than I had intended but we got there in the end….thanks guys.

There are not too many things that I would change about this blog as we already have a voice in the comments section but a weekly poll question on the hottest topic of the week,could perhaps put it over the top.

Maybe we should have a poll about if we want a weekly poll…

M42BC

#17 Metaxa on 08.28.16 at 4:30 pm

#10 Nodebt writes:
#6 Metaxa
Give me some tips to early retirement please!
Thx nodebt

Early, late, regular…doesn’t matter.
I’m 72 and still manage to put in a few hours a day that earn me money…

1) Multiple forms/streams of income…trading your hours for dollars will never get you wealthy. Might get you rich but there is a difference. Want more money you have to trade more hours. Diversify even if its only eBay or etsey.
2) Surround yourself with people who aren’t complacent…I hired folks who would push, shove and finagle their way into a better job, with me or another company. Hire folks who want your job…do not hire to fill a hole or do not hire someone who is happy at a mid level….hire folks who will push and propel.
3) Made most of mine via real estate and small business ownership…your mileage may vary. Invested in the market only recently, I’m all TFSA and balanced and diversified now, pay for good advice from lawyers, accountants, financial advisors and planners.
4) Luck. Lots of it and good advice/help from those around me. I try and return some of that now…I don’t spend too much time worrying about a postal workers daily life or her pension, you know?

#18 Sixtyfourk on 08.28.16 at 4:54 pm

I’m not suggesting that a one asset strategy is a good one, however:

The fact that an asset may depreciate in value doesn’t make paying off debt against it a bad idea. The debt doesn’t decrease when the asset value does.

#19 Metaxa on 08.28.16 at 5:02 pm

Sunday is usually Story Time and I was going to tell you about my lunch with Halle Berry today but I’m going to tell you about my son instead.

Entry level management at a local auto dealership. (25 yo)
Dealership is part of an auto group of five dealerships and one RV lot.

So he comes up with a tracking metric, based on his knowledge of what the sales folks talk about and his particular area of work in the dealership.

Asks me if this might help…I go shit, why didn’t I think of this, I could monetize this and sell it across brands, I’ll be rich…then I remember I’m retired and already rich and well, he is my son so I help him tweak it a bit and he silently implements it, compares his numbers to the ones presented at the weekly sales meetings for a time.

Rolls it out to his boss and the dealership principle…they too go shit, why didn’t I think of this…

Moved from entry level management to mid level, car, salary increase (one that made a difference, not one that just piddles around) and he now is in charge of rolling this out across all the group’s dealerships and modifying it for the RV spot.

Was sitting in the middle of a lake on our kayaks yesterday when son turned to me and told me the dealer principle told him last week that son would be a GM in his choice of the dealerships within two years.

This is the same son, who with his brother, bought a back to front duplex a couple of years ago, suited the basement of the owner occupied side, took in a couple of room mates for the empty bedrooms, rented the basement and the complete other side and have been cash flow positive since day one. Being a back to front duplex you can hardly tell it is from the street, they have a friend who started his own landscaping company who looks after the yard work and brings by stuff his other clients want gone or thinned, so it looks like a million bucks. Both their TFSA’s out perform their mom’s and mine!

No tattoos, never been inside a cop car… where did I go wrong, eh?

Anyway, the point of this is certainly to brag a bit but also to point out to all you doomers and gloomers that these are the kids that are going to step up when you are drooling the last of your porridge down your front.

Life is good and if you want it can be gooder.

#20 only in Moncton on 08.28.16 at 5:03 pm

I luv when you post these types of details on these topics we struggle to grasp, on the blog, thanks

If given the choice (true story) do you select a given company allotment say 5% to their DC plan or to DB plan for increased pension….. would it even matter if you thought you would o take the commuted value anyways

#21 Big Oil still pays my bills on 08.28.16 at 5:14 pm

Good post today, it was something I was going to ask about….. I have DB & DC, I am 54 (35yrs service)and could leave today, with $65k/yr DB, and $400K in DC account. Kids still too young.
Garth, I am with sunlife, but are most offering the same or similar, investment choices? And can you give any advice on investing with the choices we have?
Thanks

#22 crowdedelevatorfartz on 08.28.16 at 5:25 pm

@#12 Big Oil
Your 65k per annum in DB pension payments is the equivalent of almost 1.5 million invested….AND you have 400k in DC’s ?
W….T….F…..are you waiting for ?
Cancer?

Pull the pin buddy. Work on your golf, become Mister Mom, take cooking lessons, whatever…..
Get out and smell the roses while you still can.

#23 crossbordershopper on 08.28.16 at 5:27 pm

went to visit my grandmothers plot today, i remember when i was kid going over there, they didnt have anything, but honest people. my parents, have cash in the bank , but who cares, they live on their home made wine and garden and t2 cheques, hapiness is no stress, so for all of you on the 401 monday morning, think about it.

#24 Valleyboy on 08.28.16 at 5:30 pm

My defined benifit plan is a joke. And we have gone from 95% employer funded to a 60-40 funded plan. All my overtime or hours over 1500 go to excess hours. It’s the biggest scam I have ever been involved with.
IWA PP. We are soon switching to a target plan. Because we haven’t met the date to fund it so our amazing ficom. Keeps changing the rule or legally robbing us to fund the plan. Actuaries should be jailed for how dumb they were in there calculations.
Solvency moratorium. Now targeted plan. After 8 years were squeaking up to 70 percent solvency. Lol.

#25 Freedom First on 08.28.16 at 5:42 pm

Sure, nobody in their 30s worries much about being in their 60s-Garth

Yes. I remember being in my 20s and talking with my peers about financial independence. I was told I worried too much. Didn’t take me long to realize I was not worried at all. It was just called planning.

Now, being a Boomer in my early sixties, who still gets guessed at age 45-50, with black hair, my own teeth, and a body that still turns the young women’s heads, I can honestly and humbly say, my planned results have far exceeded my expectations in every way. I am Blessed.

007
Freedom First
PHD/Freedomonics

#26 Context on 08.28.16 at 5:45 pm

#21 Big Oil:- Do you have an option to roll your DC account elsewhere out of Sunlife without a penalty?

#27 cornstar on 08.28.16 at 5:57 pm

what about Targeted risk plans my union wants to switch.

#28 Toronto_CA on 08.28.16 at 6:07 pm

Well…for amounts needed to retire. This should be interesting.

I am a big fan of basing retirement needs on spending (and anticipated spending) rather than on income. My income has dramatically changed over time while my spending has remained around 4400 a month with very little deviation over the last 8-9 years (since I started tracking everything).

Income is very subject to dramatic changing, so saying you should have Income X 5 years saved by age 45 or something is kind of ridiculous to me. I just took a new role where my salary is in USD and tax free. To make the same salary in Canadian after tax dollars I would need to make about 40% more than my previous role. So if I use an income based retirement savings metric, I would be way off just because I got a raise, even though retirement needs haven’t changed at all.

Will be good to see Garth’s take on this!

#29 Bobby on 08.28.16 at 6:08 pm

A very timely piece Garth, especially given the Canada Post dispute. Many have little understanding of how pensions work so will not really grasp the issues in this dispute. Air Canada went through the same issues when they were in bankruptcy.
DB pensions are not sustainable in their present form. Once the Canada Post dispute is resolved and new hires are on a DC plan, watch for further changes throughout the federal government and crown corporations.

#30 For those about to flop... on 08.28.16 at 6:28 pm

Pension cartoon…

Slightly funny if you don’t have a pension.

Hilarious if you do…

http://imgur.com/a/X14d4

M42BC

#31 MSM-Free Zone on 08.28.16 at 6:29 pm

DB pensions (in the private sector, at least) are not all they’re cracked up to be.

Because you belong to a DB pension, the federal government severely curtails your ability to contribute to a backup RRSP, regardless of whether you might suddenly find a Stelco knife in your back in the future.

Couple that will your CEO’s total disdain for you in siphoning off his next year’s bonus toward funding your insolvent DB pension due to low interest rates, and you have a double-whammy in the making.

Not sure if the same RRSP low contribution limits apply to participants of DC pensions?

#32 Cici on 08.28.16 at 6:30 pm

@Garth

Thanks for this excellent post…totally answered all my questions and concerns about DC plans.

Gotta love a man that can both entertain and inform ;-)

#33 Context on 08.28.16 at 6:37 pm

Garth gave Big Oil the correct answer in his essay but am looking at something else.

#34 Randy on 08.28.16 at 6:49 pm

Only Teachers and Gov’t / NGO workers can get a Defined Benefit Pension Plan. It’s like winning the Lottery.
It’s no wonder the Government won’t tell you how underfunded these plans really are. Taxpayers would crap.
Wait til after the next correction when the Government comes clean and tries to tax us to make up the massive shortfalls in funding.
Bill Tufts has been trying to warn us for years.

Most bank employees also have DB pensions, as well as other industry groups. This is not just a government benefit. — Garth

#35 walMart of Sadkatoon on 08.28.16 at 7:03 pm

house horny 30 year old are embarrassing

#36 jess on 08.28.16 at 7:07 pm

backgrounder found here:

Tax wars are looming and the US has fired a shot across the EU’s bows.

http://leftfootforward.org/2016/08/tax-wars-are-looming-and-the-us-has-fired-a-shot-across-the-eus-bows/

e.g. apple: potentially meaning the US technology giant could be hit for back taxes that could amount to billions of euro.”…” a higher tax elsewhere can result in lower tax yield in the US and warns that ‘The U.S. Treasury Department continues to consider potential responses should the Commission continue its present course.’ Opposed to a unitary tax system.

Ireland will appeal of course!

http://www.oecd.org/about/membersandpartners/list-oecd-member-countries.htm

#37 TEMPLE on 08.28.16 at 7:08 pm

DB plans are gold-plated, but many (like that of the post office) are seriously and dangerously under-funded.

And many are not. And all of them demand a hefty chunk of a paycheque that, placed elsewhere in reasonable hands, would grow a lot more than a DB pension plan will provide. DB plans have pros and cons like any other plan, and you should represent them more fairly.

Besides, you know when you right-wingers say “gold plated” in a disparaging way like you think a “gold plated pension” is something great? That’s ideological jingoism and it’s unintentionally hilarious. I’d much prefer solid gold, thanks.

TEMPLE

#38 Context on 08.28.16 at 7:13 pm

My dentist knows this cop who retired at age 55 getting $100,000 in pension benefits. I said don’t believe it and the cop showed him which really pixxed off my dentist.

#39 April. on 08.28.16 at 7:14 pm

Thank you.

#40 Love My Kia on 08.28.16 at 7:17 pm

#25 Freedom First on 08.28.16 at 5:42 pm

Sure, nobody in their 30s worries much about being in their 60s-Garth

Yes. I remember being in my 20s and talking with my peers about financial independence. I was told I worried too much. Didn’t take me long to realize I was not worried at all. It was just called planning.

Now, being a Boomer in my early sixties, who still gets guessed at age 45-50, with black hair, my own teeth, and a body that still turns the young women’s heads, I can honestly and humbly say, my planned results have far exceeded my expectations in every way. I am Blessed.

007
Freedom First
PHD/Freedomonics
+++++++++++++++++++++++++++++

Your comments are of great help to me….said no one ever.

#41 Tony on 08.28.16 at 7:33 pm

The whole tax system needs an overhaul. Not being able to sell stocks short inside a L.I.R.A. is nothing short of criminal.

#42 Context on 08.28.16 at 7:36 pm

#29 Air Canada jacked up a new contract for a 20% increase giving a Captain with 12 years experience flying a Boeing 777 who can earn up to $300,000 a year with no more than 112 hours flying per month.

#43 Big oil still pays my bills on 08.28.16 at 7:36 pm

#22 crowded….. I hear you, but I still have 2 girls to get through, school….and I want to buy a condo/TH in lowemainland too.
Playing it by ear right now, still possibility of a golden handshake….

#26….pretty sure I can’t move it until I retire… But, to be honest, I never looked into it….

#44 Popeye the Sailor Man on 08.28.16 at 7:39 pm

The Government believes the pension fund is fully funded that is why they took out 28 billion in the 90’s and more in 2000. They have also changed it so the employee is now paying more and for new hires they will have to work longer to get the same benefits with out penalty.

https://www.thestar.com/news/canada/2012/12/19/public_service_unions_not_entitled_to_28b_pension_surplus_says_supreme_court.html

#45 Smoking Man on 08.28.16 at 7:39 pm

And this weeks attribution winner is.

Ryan.

With 160 comments vs Doug at 137 last week..

Doug, if you need help writing a gutsy post with soul fell free to ask.

Dr Smoking Man.

#46 Harbour on 08.28.16 at 7:42 pm

I can’t post the link but very interesting…

Who died before they collected Canadian Pension Plan? (CPP)

KEEP PASSING THIS AROUND UNTIL EVERY ONE HAS HAD THE OPPORTUNITY TO READ IT… THIS IS SURE SOMETHING TO THINK ABOUT!!!

THE ONLY THING WRONG WITH THE GOVERNMENT’S CALCULATION OF AVAILABLE CPP IS THAT THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED A CPP CHEQUE!!!

WHERE DID THAT MONEY GO?

Remember, not only did you and I contribute to CPP but your employer did, too. It totalled 15% of your income before taxes. If you averaged only $30K over your working life, that’s close to $220,500. Read that again. Did you see where the Government paid in one single penny?

We are talking about the money you and your employer put in a Government bank to insure you and I that we would have a retirement cheque from the money we put in, not the Government. Now they are calling the money we put in an entitlement when we reach the age to take it back. If you calculate the future invested value of $4,500 per year (yours & your employer’s contribution) at a simple 5% interest (less than what the govt. pays on the money that it borrows), after 49 years of working you’d have $892,919.98.

If you took out only 3% per year, you’d receive $26,787.60 per year and it would last better than 30 years (until you’re 95 if you retire at age 65) and that’s with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you’d have a lifetime income of $2,976.40 per month.

THE FOLKS IN OTTAWA HAVE PULLED OFF A BIGGER PONZI SCHEME THAN BERNIE MADOFF EVER DID.

Entitlement my foot, I paid cash for my CPP! Just because they borrowed the money for other government spending, doesn’t make my benefits some kind of charity or handout!!

Remember Senator’s benefits? — free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days. Now that’s welfare, and they have the nerve to call my CPP retirement payments entitlements?

We’re “broke” and the government can’t help our own Seniors, Veterans, Orphans, or Homeless. Yet in the past few years we have provided aid to Haiti , Chile, Turkey, Pakistan, etc., etc., etc. Literally, BILLIONS of DOLLARS!!! And they can’t help our own citizens !

Our retired seniors living on a ‘fixed income’ (CPP and OAS) receive no additional federal aid nor do they get any financial breaks, while our government and religious organizations pour hundreds of billions of $$$ and tons of food to foreign countries!

They call CPP an entitlement even though most of us have been paying for it all our working lives, and now, when it’s time for us to collect, the government is running out of money.Why did the government borrow from it in the first place? It was supposed to be in a locked box, not part of the general fund.

#47 jess on 08.28.16 at 7:45 pm

rethink of housing policy

Stefen Gerlach a former deputy governor of the Central Bank

http://www.independent.ie/business/irish/gerlach-rethink-of-housing-policy-needed-to-avoid-a-crash-35000256.html

======

#48 Md on 08.28.16 at 7:47 pm

I love learning new words on this blog.

#49 JRH on 08.28.16 at 7:54 pm

I agree Kia Lover !

#50 Ronaldo on 08.28.16 at 7:56 pm

#38 Context

”My dentist knows this cop who retired at age 55 getting $100,000 in pension benefits. I said don’t believe it and the cop showed him which really pixxed off my dentist.”

My dentist retired when he was 55 and his friend was a cop who lost his life in the line of duty. He was happy to have gone into dentistry.

#51 The American on 08.28.16 at 8:02 pm

At #14: Mark M., hey please for the life of me direct me where I ever said there would be four rate hikes this year. Like I said, stop rewriting history. I said there would be a minimum of two, and you e already witnessed one. You’ll see another before year end. You’re a low life dirty player… Seriously, can you do anything well?

#52 Nodebt on 08.28.16 at 8:10 pm

Metaxa-thank you for your response, good to hear your boys are kicking ass, I started doing rental houses with my cousin last sept and there going awesome all positive cash flow! Enjoy your retirement and income streams!

#53 The American on 08.28.16 at 8:14 pm

Mark M., because you so clearly lack reading comprehension skills and a proper education in finance, perhaps you do better listening once you’ve cleaned out the jizz in your ears. As of two days ago Janet is alluding to strengthening odds of a rate hike this year. But who the hell is she and what would she know? I mean she’s just the Fed Chair. http://money.cnn.com/2016/08/26/news/economy/janet-yellen-federal-reserve-jackson-hole/

#54 BOOM! on 08.28.16 at 8:20 pm

I have to chuckle a bit at all the excitement over Canada Post trying to re-write their retirement system, as well as many union multi-employer plans being woefully underfunded, and now scrambling to restructure.

Sorry, this stuff is NOT a new revelation.

1983 the US Government rolled out FERS (Federal retirement security) to replace CSRS (Civil Service Retirement System). Affects: the guarantee is 1/3 of what it had been previously. Now, gov’t employees are covered and contribute to social security which they did not under CSRS. You were offered an RRSP thingy where they would match 1 for 1 up to 3% .5 to1 on the next 2% tax deferred until age 70.5 so, if you contributed, they contributed. You select where it was invested from among 5 index funds 3 equity 2 bond mix and match if you like.

For those that are under FERS, invested a decent portion of salary (10% or better) your retirement funding exceeded the old CSRS promises, AND it is your money!!

For those who expect a union plan to deliver as promised… I would NOT count on that one. Teamsters, carpenters, and electrical workers have already had nasty surprises here. Canadian mileage may vary.

Overly optimistic returns did not materialize, fewer new workers in these union schemes means the about to retire will suffer actuarial reality in a near-zero interest rate world.
(We have been in one a decade, so what is new here??)

IF you want “retirement security” plan on developing it yourself, either using a TFSA, RRSP, or even if you are in a defined benefit scheme, commute it, when you can, if you can! That makes it your money, no one can take it away. Yes, there is investment risk, yes it have better and lesser years, yes you can leave it for the basement dwellers if you must.

If you have no retirement benefits offered at your work, or you are self-employed – what ARE you waiting for??
If you enjoy struggling, fine, keep doing what you’re doing, the result will be earned…

I look forward to see what Garth has to say on planning / funding one’s retirement security.

M64WI

#55 F.dover on 08.28.16 at 8:20 pm

When Ted Turner gave away his billions, he kept a little bit for himself. His quote was ” I have done the math, you only need two hundred million.”
So I guess Smoking Man has his ass covered!

The drawback to Hawaii is that all Asian consumer goods come from the mainland at great expense. Some sort of reason in ancient quarantene laws or something affects shipping logistics so Hawaii is not a trans shipment station, and of course all the food comes from the mainland too. Pricey place.

#56 LilyJoe~ on 08.28.16 at 8:21 pm

Thanks Garth! Good read again~

#57 espressobob on 08.28.16 at 8:28 pm

many people live day to day never considering the future and have no plan b in place.

three weeks ago taking a pleasant late night cruise on the bike something happened. a busted humerus.. it’s one of those things in life you can’t predict. ouch.

ambulance, triage, and the usual crap, but the fact remained. this is a serious injury.

one thing to point out is plan b. something I learned reading this blog.

#58 crowdedelevatorfartz on 08.28.16 at 8:37 pm

@#38 Context
“My dentist knows this cop who retired at age 55 getting $100,000 in pension benefits…..”
*******************************************
I know a retired Vancouver motorcycle cop. His last 5 years of work he NEVER turned down any OT. Special events, movie shoots, parades, whatever….he was one of the highest paid city employees 4 years in a row…..when he retired….he went back to fulltime “casual” work with the city AND worked weekends running a charter fishboat…..
Why ? You ask…..
He was on his 4th marriage ……and all his ex wives still love him. :)

#59 crowdedelevatorfartz on 08.28.16 at 8:40 pm

@#53 The American
“once you’ve cleaned out the jizz in your ears’
*******************************************

I think it was in his eyes, what with the lack of “reading comprehension”and all that…..either way.

ICK!

#60 #hugAmillennial on 08.28.16 at 8:46 pm

It’s funny that boomers love taking shots at the mouldy, basement dwelling millennials without acknowledging the obvious, gross inequity of the current Canada Post situation. And most other pension plans for that matter.

Millennials will be pushed to DC pensions and will have to make up the shortfall of the boomers underfunded DB pensions. While seeing significantly reduced benefits themselves.

Pay more to get less. I also considered using #boomerlogic as my tag. I didn’t because it auto corrects to “homoerotic” on my phone. Try it.

#61 Bank of Millennial on 08.28.16 at 8:53 pm

#41 Tony

Just buy ETFs betting the same way..?

#62 Context on 08.28.16 at 8:59 pm

#43 Big oil:- I see your in BC as this is out of my area, and assume your locked in even though there is a lot of new legislation sitting around with amendments to be passed. You had better consider your options at retirement for now as there are just a few. Garth gave you the correct answer in his essay so suggest you read it.

#63 Pete on 08.28.16 at 9:05 pm

#46 harbour
Didn’t you see it coming? I saw the writing on the wall when I was 13 years old. I’ve been telling people about the inevitable collapse, and the futility of aspiring to have a lush retirement ever since. Now, in my 40’s, people are starting to realize that I was right all along. My parents used to say that I was nuts to say that in the end people wouldn’t be able to get at their money, saying to me “it’s their money, it can’t just be taken away from them”.
I, however, chose a minimalist lifestyle and am very happy to have done so. I remember the words of Lovell Dyett “Spend your time wisely, it’s the only money you have”. My life has been rich beyond all measure, in the amount of time I’ve had for enjoyment of friends and family.

#64 Scott on 08.28.16 at 9:14 pm

46 Harbour-very well written post!

#65 Popeye the Sailor Man on 08.28.16 at 9:33 pm

Many blue collar Government jobs pay less then private sector jobs but offer more stability once you get past the three years of being a casual or term employee. In my field of work we have a short fall of people and could hire more but not many are beating down the door. The DB pension goes a long way in giving people stability. But for anyone who starts saving in TFSA and RRSPs when they start work like they do with a DB plan can get close to matching it and have control off all the funds. A DB plan ends when the beneficiary dies. Not much help in estate planning.
I don’t consider the DB plan gold plated more like silver plated with a bit of rubbing it wears thin. I looked at the pros and cons of the DB plan and decided it would be better to cash out before turning 50. I have put my money were my mouth is and last year took a break in service (quit) and transferred the cash value out to my investments. I now have control of the funds and if I pass, my survivors get every penny. I have been rehired as a term employee and back paying into a new DB plan under the new rules and will have to compete with everyone for positions. I will work for several years more while my balanced investments grow to the date I would normally have retired.
Point is I had a DB plan and opted out for self-directed. A DBP is a forced savings plan; if you start early and are consistent anyone can achieve their own retirement fund.
Don’t envy others work with what you have available. TFSA, RRSP, RESPs , SRSPs , Non RRSPs invested in tax advantaged way are all available.

#66 Abroad on 08.28.16 at 9:44 pm

Why can’t you get your gov pension if you spend more than 6 months out of Canada?

Are we serious about globalization or not?

What makes it not illegal to deny collecting pension out of country, at the age of free flow of capital?

How come free trade agreements didn’t take care of this fundamental issue?

#67 Boomer Death Counter on 08.28.16 at 9:46 pm

Of course, the big issue behind all this pension talk is how the boomers have taken so much more out of society than they will ever contribute, leaving scraps and debt for the rest of us.

The good news is that the overwhelming majority of boomers will be deceased or seriously impaired/in decline by 2024. That is barely 7 years from now. And the political power of boomers has already been eclipsed and will dramatically decline from here on in.

Bye bye, boomers.

Enjoy your pensions. Big changes coming to the tax system, including wealth transfer taxes, windfall real estate profit taxes and mega inheritance taxes, to sort out the mess you have created, this ridiculous wealth and opportunity gap.

And since our health care system won’t be able to afford to care for you within barely 3 years, you’ll be taking out reverse mortgages to pay for private PSWs to change your Depends. Good luck with that as real estate crashes.

I personally wish you boomers no ill will.

But, reality always has its own way to return to bite us all.

#68 Mark M. on 08.28.16 at 9:49 pm

#53 – The American

Yes, that’s it, there’s jizz in my ears and my eyes.

Now then, are you honestly going to tell me last year your prediction for Fed rate hikes for this “booming” and “cooking” economy was ONE 25-basis point hike every year?

That after 8 years of ZIRP and trillions of QE things are “cooking” so well you thought that the Fed would be able to normalize interest rates at the pace of 1% every four years? Get us back to 4% by what, 2032?

Let’s say things really start to “cook”, maybe they can double the pace and get us back to the historic norm of 4% by 2024?

Earlier this year, Yellen made it seem like June was a very real possibility, then when June came she said they couldn’t because of the upcoming Brexit vote. Did she just find out about the Brexit vote in June?

How about early this year when the Fed said FOUR hikes were coming, did she not know it was an election year? And why should she care, her mandate is apolitical, right? (Ask your father what it means).

When September 21 comes, and a rate hike fails to materialize, we’ll all be waiting for your analysis. If you fail to provide it, you’ll have another shot at it in December.

It will be epic.

#69 Context on 08.28.16 at 10:27 pm

The restaurant bar full music operation that I thought TurnerNation might be interested in has sold. What a bargain that was which even included two large apartments and the place was fully renovated on a cheap long term lease with $400,000 in chattels. The place was packed with a good crowd 30’s and over for their place to go. Seating capacity for 130 and even a patio.

#70 BOOM! on 08.28.16 at 10:29 pm

Yes, we Boomers are in our declining years. So… we still vote, we still spend money. Some of us spend our own money, too. I am getting what was promised years ago, by some long passed group of politicians.

I have cashed in my late 1970’s early 1980’s 30 year bonds paying double digit interest rates, that also fit with the double digit mortgage rates many Boomers paid during those times.

Never guess what some other generation has gone through, or even what the younger generations are going through. They, and we can never fully understand “the times.”

Every generation had, has, and will have their challenges.
None shall be spared, never were before, what’s makes ‘you’ special?

#71 The American on 08.28.16 at 10:35 pm

Mark M., rate hike by end of the year. I don’t argue with idiots. There you go again, rearranging words in what was stated in THIS VERY STRING. Sheesh you are DUMB if you believe others do not have immediate access to read what was recently written. Are you sure you aren’t Donald Trump? Again, I said no less than two rate hikes this year. So why are you trying to make it out that I would ever feel now there would somehow only be one 25bps rate hike per year? As for the QE, I’d say the American economy is literally kicking the shit out of the Canadian economy in every imaginable way. Jealous much? Sounds like it. Everything is relative in terms of the global economy. The USD remains the safe haven and is the absolute choice for investors, as are US securities. Hate it all you want and force-rank it against itself from previous generations, but the U.S. economy is indeed cooking and surpassing all others. I’ll be providing you zero explanation when NO rate hike happens on Sept. 21st as I’ve already said that is highly unlikely due to the obvious reasons. You clearly don’t understand how an election works. Suck on that piece of meat while you continue cleaning that jizz out of your ears and eyes.

#72 Russ on 08.28.16 at 10:36 pm

Boomer Death Counter on 08.28.16 at 9:46 pm

Of course, the big issue behind all this pension talk is how the boomers have taken so much more out of society than they will ever contribute, leaving scraps and debt for the rest of us.

The good news is that the overwhelming majority of boomers will be deceased or seriously impaired/in decline by 2024. That is barely 7 years from now. And the political power of boomers has already been eclipsed and will dramatically decline from here on in.

Bye bye, boomers.

I personally wish you boomers no ill will.

But, reality always has its own way to return to bite us all.
=====================

Millies are so cute at this stage.

Thinking, what’s bad for Boomer is good for us! Right, Mom?

The Gov’ment is gonna smote them souls with the sword of taxes!

Oh wait, that’s kinda gonna suck the shit out of the inheritance. Do’oh!

#73 Renter's Revenge! on 08.28.16 at 10:42 pm

#25 Freedom First on 08.28.16 at 5:42 pm
#40 Love My Kia on 08.28.16 at 7:17 pm
Your comments are of great help to me….said no one ever.

LOL exactly! He’s gotta be trollin tho. No one with an awesome life and babes hanging off his arms has time to post 20 inane comments a day on a blog about dogs, sexual innuendo and balanced portfolios.

#74 Brazil ex-pat on 08.28.16 at 10:47 pm

#134 crowdedelevatorfartz on 08.28.16 at 10:08 am
@ Brazil ExPat

Hmmmmm

Apparently the Democratix arent waiting for the “last 3 weeks of the election” to “drop the shoe”…..

Sundays front page of the New York Times…

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

As usual…..you have not idea what you are talking about. Must be all the methane. Go watch every clip from Dinesh D’souza…..then come tell us what a racist the Donald is.

https://www.youtube.com/watch?v=yu2VsZPplug

PS: your sweetheart “Billary” proudly admits she is a “Goldwater girl”. Do a second of research to figure out what that means…..

#75 Rexx Rock on 08.28.16 at 10:49 pm

I met a retired US cop living in Puerto Vallarta and he told me his pension isn’t enough to stay in Florida.He lives in Mexico and says its to expensive to retire in the US.

#76 Transplant on 08.28.16 at 10:51 pm

#67 Boomer Death Counter
personally wish you boomers no ill will
——————————————————————–
Sorry to pop your bubble and disappoint you but your numbers regarding baby boomers are completely inaccurate.

Boomers are generally thought of as those individuals born between 1946 and 1964. The following information is paraphrased from the US Social Security Administration 2016 and I believe would apply generally to Canada as well:

-those reaching age 65 today on average can expect to live until age 85 (2036)

-of those who are now 65, 1 out of every 4 will live past 90 (2041) and 1 out of 10 will live past 95 (2046)

Keep in mind that the individuals referenced above were born in 1951. Therefore, based on current projections, those born in the last cohort of 1964 will on average live until 2049 (33 years hence) with 25% living until 2054 and 10% living until 2059. It seems then that you will be stuck with those blood-sucking boomers for much longer than you had anticipated.

Perhaps it’s just me, but the tone of your comments sure seem to belie your patronizing statement “I personally wish you boomers no ill will”.

#77 Ronaldo on 08.28.16 at 10:55 pm

67 Boomer Death Counter on 08.28.16 at 9:46 pm

I suspect that the generation following you will be saying the same thing as you are. I suppose we boomers could have ranted about how much our own parents drew from the system too. Maybe we’re more mature. Anyways, have a good life and don’t sweat the small stuff. Life is not that complicated.

#78 Entrepreneur on 08.28.16 at 10:59 pm

The signing of the TPP is not locked in, as they say, and we can walk away from it. I am sure Obama signed the first stage of it. I am glad that the Germans are dropping out of it.

As for the postal workers strike and my opinion: I think that people get greedy and want more, give more and more.

As for the DB plans: I think that anyone who starts a small business from the bottom should automatically be put on a DB plan. I also think we should set up a special group to direct it and keep track of it. This just might stimulate the economy, get people back to work,
and off social assistance.

#79 Smoking Man on 08.28.16 at 11:20 pm

#57 espressobob on 08.28.16 at 8:28 pm
many people live day to day never considering the future and have no plan b in place.

……

It’s called brains. Resourcefulness, the weave, living on your wits fearless as shit and going with your gut… Have no fear of judgement a heavy anchore.

Being schooled and dependent on a false system that trains you to be a tail wagging dog is bold faced lie is so over rated..

Entrepreneurs never retire.. How boaring.

Let your hair down even if you got none is the only way to roll.

100 years from now, where all dead…

Live large, bet big and enjoy your short time on the beautiful plant with shit nabours.

#80 meslippery on 08.28.16 at 11:30 pm

We have Brexit and wage stagnation, free trade.
No pension.Tell me why people are so pissed off as to vote for the donald??

I think just maybe life as I recall was better before free trade.
I was little more than a kid when free trade was being
talked about, some people thought it was very bad.
Turns out they where right.

#81 MF on 08.28.16 at 11:45 pm

#71 The American on 08.28.16 at 10:35 pm

People are right to be skeptical.

I too believed 4 rate hikes were coming this year. That is what was expected. Whether you believed it or not doesn’t matter.

The whole thing is the goal posts keep getting moved.

Mark M is right. Didn’t Yellen know 2016 would be an election year? Didn’t she know beforehand that the Brexit vote would be in June?

Didn’t Bernanke say hikes would come with full employment?

-So what IS still stopping them? How can a recovery be so robust yet so delicate that the FED rate cannot be lifted more than .25% in 8 years? How can they be so scared if things were so good?

Doesn’t make any sense.

And this bit about the fed not wanting to stir the pot during an election year makes it all even more suspicious. What..the super robust economy is dependent on a democrat in the white house to continue now? When the whole thing seems to be biased and one sided like that, it’s hard to take any official statistics seriously as they are clearly being used as political weapons/propaganda.

This post is not about Canada btw so no deflecting please.

MF

#82 WUL on 08.28.16 at 11:59 pm

#80 meslippery on 08.28.16 at 11:30 pm

“…a kid when free trade was being talked about, some people thought it was very bad. Turns out they where right.”

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

Yes, they were right. Canadians complain that they were not privy to the negotiations of the TTP pact. I acknowledge that perhaps some deals have to be negotiated in confidence by our leaders, but, why was Pfizer etc. at the table participating?

A massive sellout and with luck, Brexit, Trump, and Germany killing the TTIP, etc. can kill this sellout of our nations to multinational corporations and end this nonsense.

Perhaps along with this trend, the madness of Thatcher’s and Reagan’s trickle down neoliberalism (with the consequent flood upward of all of the $ in the world to 80 families) will end as well.

Signed,

A Boomer That Spotted This Swindle A Long Time Ago

#83 Andrew Woburn on 08.28.16 at 11:59 pm

I always have to laugh at the math-challenged millennials who seem obsessed with the idea that selfish boomers cooked up the system that is “destroying their lives”. They are assisted in this delusion by the vacuous media who seem to believe that boomers began to run the world in the Sixties.

In 1965 the very oldest (not the average) boomer was only 20, a bit younger than Justin Bieber today. Very few people have any real influence on anything before they are 40 and almost nobody has any decisive authority before they are 50. The very oldest boomer turned 40 in 1985 and 50 in 1995.

By 1985, all of the things millennials blame on the boomers were well under way. The “Greatest Generation” invented consumer debt in order to buy parti-coloured land yachts with fins in the Fifties and high power TV advertising to sell them. They introduced credit cards. They invented insane labour contracts and unsustainable pension schemes in the Seventies because they had won the war and the good times would last forever. They pioneered the art of not noticing government debt creep.

They seem to get a free pass today because they fought in WWII but make no mistake, beneath the sober haircuts and the appearance of prudence, they created the world we now live in. Boomers grew up believing in it … at least until now.

#84 MF on 08.29.16 at 12:01 am

#70 BOOM! on 08.28.16 at 10:29 pm

This is true. I remember my boomer dad being an unemployed PHD in the early 90’s recession here in Toronto having to deliver ad mail for money. We used to go out together delivering. He got exercise and I was able to burn off the loads of energy I always had. My mom said they could paper the entire wall with the amount of rejection letters received. He eventually landed a good job, worked for a few decades and is now enjoying retirement.

MF

#85 waiting on the westcoast on 08.29.16 at 12:14 am

Wow – two days of pissing matches and lots of whining about how it’s worse today than in the past… the pack is turning on itself…

I thought we would see 2-3 interest rate increases from the Fed. Why? Because my businesses are feeling pressure from my “lower pay service job” staff. They are feeling the fuel/folks/rent pinch and pushing that pain upstream. I think it has been a major mistake of the US Fed not to raise rates.

Our society is more affluent than ever. While there may be more of a gap and that gap is even more exposed by our modern media, the reality is that more and more people are living in better circumstances and access to more and better services.

Sure, I might have had to wait 5-6 months for a MRI on my knee but I could get one and have the surgery to fix it (I paid to fast track both and thereby opened a slot sooner for someone else who was waiting).

Our 1st world problems of not being able to buy a home in my favourite neighbourhood is nauseating… especially when I see people spending the equivalent of a mortgage payment on app upgrades, lattes, and living large at the various eateries. I saw my parents sacrifice and not make purchases to get their first couple of homes. But they probably would not have bought the last few years given how overpriced the Vancouver market has been.

I agree that the current market doesn’t merit any purchase of a home but the incessant whining is killing me. Move – find another green field to plant your claim/stake and move forward! And shut up!

#86 Annek on 08.29.16 at 1:07 am

#67 Boomer Death Counter
“Of course, the big issue behind all this pension talk is how the boomers have taken so much more out of society than they will ever contribute, leaving scraps and debt for the rest of us.”

Hello 67
I take exception to this statement.
I am of the generation who worked my entire life full time, as a professional, getting paid for 7.5 hour days but working 9-10 hours daily at least with no overtime.
I paid my full dues in taxes.
We did not expect to have everything that you do.
I saved my money, and nothing was bought if I couldn’t afford it. No credit.
Unlike this generation, who works exactly the hours you are paid for , not a minute more.
You are the group who feels entitled to everything. I know, because I train many students. I see them, thinking they know everything, yet know so little.
They rarely listen to the news, totally unaware of what is happening in the world or this country. They are not savers, but spenders.
We boomers worked hard to build this country.
Many of us have what we have because we worked for it.
By the way, where are your math skills.
You say we have 7 years left.
If average age for women is 88 and for men is 85 and increasing, I think you better go to the calculator ( I don’t think mental math is in your vocabulary) and recalculate.
I should think I have 28 years left and going strong.
Don’t ” Bye, bye , Bommers” quite yet. You may get grey hairs doing so.
Work hard,work smart, and you may not be as disadvantaged as you think.

#87 Vanrentor on 08.29.16 at 1:07 am

Here in Vancouver the house horniness has spread to all ages. Most of the 40, 50 and 60 year olds I talk to are convinced things are just taking a break before the next big price jump. My 70 year old neighbour who is very wealthy from RE passed his wisdom on to a few of us at a block party last weekend. He said borrow as much money as you can and buy as much RE as you can.

I think he has had a little too much VanViagra.

#88 Annek on 08.29.16 at 1:21 am

#67
I want to add one more comment.
My assets are NOT primarily in real estate.
I have significant savings as well as a house to live in.
I hope that for your generation, real estate crashes.
And it will.
This should make things more affordable for you guys.
If people only have their assets in real estate, and there is a correction, I would not feel sorry for them. They could have sold and taken their profits and rented.

By the way, I visit lots of seniors in their 80’s and 90’s in their homes and they do not all wear ” Depends.” They are doing quite well in their homes. The ones that do well made good healthy choices in their lifestyles and are benefiting in their old age as a result. Not all ” old ” people are invalids.

#89 BillyBob on 08.29.16 at 1:47 am

The American sure sounds like an angry little man today, projecting his oral fixation onto others, hmmm?

Did he just come from a Trump rally or something?

I actually agree with most of what he posts, but the image of him angrily punching the keys on his mom’s laptop, spittle flying at the screen, is too amusing to me to be able to take him seriously.

Dude, calm down and your credibility may actually increase.

#90 millenial82 on 08.29.16 at 3:10 am

Let me guess….about $450,000-$500,000 in liquid assets by the time you’re 45 is a good gauge. Then again, when you retire it’s entirely possible to live a healthy and happy life by focusing on the balance in your non financial areas such as: relationships, partying, exercise, cooking/diet and rest. Sure we need money to survive but we need to take care of ourselves as well. What good is hitting 65 with a fat portfolio if you’re fat, sickly, sore, tired and limp. Now, if you want to hit Seneca up nearly every bloody night and blow your doe on smokes, booze, tables, slots and strippers then look to the former.

#91 Mark M. on 08.29.16 at 5:21 am

#71 – The American

So a rate hike in December 2015 and a second one in December 2016 counts as two rate hikes THIS year? Educated in American schools right?

There will be NO rate hikes this year, not FOUR like your girlfriend Janet Yellen alluded to nine months ago. If they wanted to hike, they could in September as they are apolitical. When December comes, they’ll pass again.

I am comparing today’s US economy with that of the past, are you saying trillions in stimulus and 1% GDP growth is the new normal?

Your explanations will be epic.

#92 F.dover on 08.29.16 at 6:59 am

The ‘great generation’ came home from WW ll to a Mississagua that was farm land and a Toronto with the Royal York Hotel dominating the skyline. They gave birth to boomers, and made money hand over fist with cradle to grave jobs and everything they accumulated appreciating in value monthly due to huge inflation.
This boomer hit the work force in ’73 making enough for a car payment, gas, a couple 2-4’s, cigarettes, a bag and some junk food every week. I lived at the parents until 23 because broke. I only got grade 12 because I couldn’t picture being broker longer, through university.
Meantime the great generation suits were running the show right up until about 20 years ago, when they sold their houses and businesses for a dollar on the ten cents they had paid.

Don’t lay the blame on boomers. It was broken when we got it.

The biggest crime of the suits in charge was that ever since T1, the country borrows more every year…we have never in our working life been expected to pay our full share of taxes to float the system, and this was not our choice!!!

Consider that, millenials, been there done that.

#93 Mr. Frugal on 08.29.16 at 7:43 am

Here’s an interesting article on the troubles brewing in Canada. I should include a TRIGGER WARNING because they mention the possibility of negative rates.

http://www.businessinsider.com/low-oil-prices-and-real-estate-market-are-worries-in-canada-2016-8

#94 jess on 08.29.16 at 7:48 am

bubble hangovers

The National Asset Management Agency (NAMA; Irish: Gníomhaireacht Náisiúnta um Bhainistíocht Sócmhainní Eilliú) is a body created by the government of Ireland in late 2009, in response to the Irish financial crisis and the deflation of the Irish property bubble.
https://www.nama.ie/
==============================

Borrowing rates
EU law bans state aid where it distorts normal commercial competition. Builders argue that Nama’s (national asset management agency) plan breaks this rule because, as a State agency, it can borrow at far cheaper rates than private sector developers, giving it an unfair advantage.
==
can’t afford mortgage or rent?
– property website Daft.ie – average monthly rent in Ireland rose to €1,006 in March, the first time since May 2008 that it has gone above €1,000. Rents in Dublin are now higher than at the peak of the property bubble.–> higher rents, worsening homelessness and an ever more stagnant property market
-technology companies expressing recent concerns about the housing situation and its impact in terms of attracting employees,
– €46 million a year is being spent on hotels for homeless families

“The private rental sector doubled in size between 2006 and 2011, and one in five homes are now rented. Given this, he says, we need to rethink how we consider tenants and the rented sector as a whole….. We’re dealing with people every day who are facing increases of up to 40 per cent, and often there’s no basis for it. The property certainly hasn’t improved by that percentage.”
http://www.irishtimes.com/business/economy/time-to-end-ireland-s-failed-developer-led-property-market-1.2645776

#95 pBrasseur on 08.29.16 at 7:50 am

#91 Mark M.

I am comparing today’s US economy with that of the past, are you saying trillions in stimulus and 1% GDP growth is the new normal?

What stimulus? The Fed bought massive amount of assets which it paid for with bank reserves, those huge excess reserves (which since 2008 pay interest) merely sit in banks vaults. For the time being the banks seem happy just collecting the 0.5% interest on the reserves rather than using it to generate loans, which would indeed constitute stimulus and generate a lot of inflation. BTW the Fed actually makes money on this, the assets it bought yield more money than the interest it pay on reserves, last year it wrote a fat cheque to the US gov.

Stimulus might happen one day if the Fed is too slow to raise the interest is pays on bank reserves. But for the time being the money is not circulating because people are not borrowing, they are happy to hoard cash, by doing what it did the Fed was mostly responding to that demand. Demand for money (ie: the urge for safety and to save) is at historic highs, when that subside a bit you will see growth, possibly a lot of it.

So the US economy is in better shape than you presume, it is not being stimulated yet it’s growing and is slowed mostly by anti-growth policy of the US gov. under Obama (too much corporate taxes and regulations), people have been saving and households balance sheets are in the best shape they’ve been in decades.

You’ve been told on this blog many time, don’t bet against the US, so don’t.

#96 Smoking Man on 08.29.16 at 7:56 am

Who’s buying USD

https://www.rt.com/business/357516-canada-economy-oil-property/

Hey Doug, Ryan. Hope your telling your clients if the have Cash on Hand for there portfolio’s Make sure it’s in USD.

#97 JohnInOttawa on 08.29.16 at 8:03 am

Hey #67 Boomer Death Counter –

Wow – here you are, looking at the keys to wealth, so grab onto the keys and run with it.

Sounds like the little voice in the back of your head is saying “find the metadata here” but your eyes are blinded by anger.

Listen to the little voice in the back of your head and live/love life.

#98 maxx on 08.29.16 at 8:05 am

#3 Cloudy on 08.28.16 at 2:32 pm

“Should I bother with RRSP’s or just do the TFSA thing and hope my pension is solvent until I die?”

What works for us is: max out the RSP and immediately put the refund into the TFSA, topping up as necessary. Perhaps a bit of belt tightening here and there, but you’re up to date and that’s critical, because, oh, how the years roll by – just like watching the bambinos grow up.
Might just take a bit of sting out of watching them leave the nest.

#99 jess on 08.29.16 at 8:08 am

#83 Andrew Woburn on 08.28.16 at 11:59 pm

combining terms?
generation (rent + snowflakes) = precariats

#100 crowdedelevatorfartz on 08.29.16 at 8:12 am

@#67 Boomer Death Counter.
“Bye bye, boomers. ”
*******************************************
I’m at a loss for words.
When all the boomers are gone who will loan you money?
Who will tell you “good job” every time you wipe your bum?
Who will let you live in their basement?
Who will loan you the car?

BA DA BOOM!

#101 maxx on 08.29.16 at 8:19 am

#6 Metaxa on 08.28.16 at 3:04 pm

“Cash flow is King and multiple streams of income is the Crown Prince…haven’t touched any investments or savings.”

Varied. Flexible. Splitable. Perfect.

Went “independent” over 20 years ago and never looked back. Maxed out RSPs, commuted all company pensions, maxed out TFSAs, bought foreign pension years to the max (great hedge on the CAD) and took CPP early. We still max out these containers and absolutely love the flexibility this investment arrangement offers.

#102 crowdedelevatorfartz on 08.29.16 at 8:20 am

@#74 Brazil ExPat
“Go watch every clip from Dinesh D’souza…..then come tell us what a racist the Donald is.”
*******************************************
Dinesh D’Souza. Now there’s a name that means a lot.
Nah, rather than listen to the internet ravings of another conspiracy theorist loon.
I’ll take my info from a respected, Pulitzer Prize winning news source. a la the New York Times.
You keep stocking up on bug spray , bullets, bumwad and bullion for the End of Days…..
I prefer verifiable information, not slanderous innuendo.

Speaking of corrupt female politicians Hows El Presidente Dilmas impeachment going? Helping the Brazilian economy back on its feet is it?

:)

#103 crowdedelevatorfartz on 08.29.16 at 8:26 am

@#86 & 88 Annek

Dont waste your time.
Boomer Death Watch is too busy holding his breath, closing his eyes and sticking his fingers in his ears so , like an ostrich, all the bad “stuff” will just go away.

#104 Grey Dog on 08.29.16 at 9:01 am

Blog on fire today…Boomers vs Millenials
As a Boomer, I’m waiting to see whether Hubby can retire using Garth’s retirement barometer.
Annuities stink and are of benefit only to company that issues them and person that sells them to you. Just stop raiding your nest egg that is in a balanced portfolio that Garth outlines.
Use 4% rule. Then Millenial children can inherit a chunk when we all die in 2025, (as predicted by Millenial in earlier post today). Oh yeah, it’s all going to be taxed straight into Government (as same Millenial predicted) and he won’t catch a break here, Awwwwwwe,

#105 BZLA on 08.29.16 at 9:03 am

Isn’t there immediate vesting for employee-sponsored RRSP’s in Ontario?

#106 maxx on 08.29.16 at 9:12 am

#29 Bobby on 08.28.16 at 6:08 pm

“DB pensions are not sustainable in their present form. Once the Canada Post dispute is resolved and new hires are on a DC plan, watch for further changes throughout the federal government and crown corporations.”

I certainly hope so. For the past decade or so, government has increasingly patterned its machinations on the private sector business model. Business has become more effective, therefore government needs to streamline salaries (performance), pensions and benefits accordingly. Aggregate performance metrics would likely show that DB should have disappeared long ago, along with enhanced benefits, such as dental and vision care.

DB is archaic, costly and more importantly, wasteful. The bulk of dental and vision care (waste) could be channeled towards improving the public medical system and health education starting at preschool.

If the goal of business is profit and government models itself upon it, then government should also aim to be, at very minimum, in the black.

#107 pBrasseur on 08.29.16 at 9:17 am

Trying to guess exactly when the FED will raises its rates is a pointless exercise and makes for a rather boring pissing contest between bloggers.

Who cares if it’s in September, December or sometime next year!

The main fact here is that it will raise rates eventually, rather sooner than later, the moment is approaching and the likeliness increases with time. What you need to understand is that while people pile on more and more «do/pay nothing» cash on the sidelines and restrain their borrowing, spending and investments there will come a point at which this no longer makes sense. At some point aversion to «riskier» assets will subside somewhat, spending, investment and borrowing will pick up.

For the Fed it’s a complicated decision to make, pull the trigger too soon and it might hurt the economy, too late and it might lose control of credit and inflation. So it talks about it to test the market’s reaction.

The thing to remember, time is working towards a hike.

#108 not so fast there on 08.29.16 at 9:21 am

#45 Smoking Man
“Ryan. With 160 comments vs Doug at 137 last week.”

If you remove the dozen posts that Flop flooded the Saturday guest post with, and the dozen responses to his poll, Ryan and Doug are actually running neck and neck.
As long as Flop continues to co-host the Garth & Flop Blog, you can’t measure Ryan and Doug’s popularity by the number of comments.

#109 fancy_pants on 08.29.16 at 9:26 am

Canada facing massive mortgage crisis
http://www.miragenews.com/canada-facing-massive-mortgage-crisis/

#110 greyhound on 08.29.16 at 9:32 am

Speaking of pensions, another reason to save & invest is the increasing hit that pension funds & insurance companies are taking because of ZIRP. Not to mention _negative_ interest rates. Lots of pension funds are already flirting with insolvency.

#111 fancy_pants on 08.29.16 at 9:33 am

The Housing Markets In The Hamptons, Aspen And Miami Are All Crashing

http://www.zerohedge.com/news/2016-08-27/%E2%80%9Ci%E2%80%99ve-never-seen-anything-housing-markets-hamptons-aspen-and-miami-are-all-crashing

#112 cramar on 08.29.16 at 9:39 am

Half of the high-paying jobs in America now require some coding skills:

http://www.marketwatch.com/story/half-of-the-high-paying-jobs-in-america-now-require-this-skill-2016-06-21

#113 NoName on 08.29.16 at 9:47 am

Interesting reads

After phones, cars will be the biggest category for mobile-data consumption.

https://techcrunch.com/2016/08/28/how-connected-cars-are-turning-into-revenue-generating-machines/?ncid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29

—–
MUST READ

пропаганда
– information, especially of a biased or misleading nature, used to promote or publicize a particular political cause or point of view.


The Russians are very good at courting everyone who has a grudge with liberal democracy, and that goes from extreme right to extreme left,” said Patrik Oksanen, an editorial writer for the Swedish newspaper group MittMedia. The central idea, he said, is that “liberal democracy is corrupt, inefficient, chaotic and, ultimately, not democratic.

http://www.nytimes.com/2016/08/29/world/europe/russia-sweden-disinformation.html?partner=rss&emc=rss&_r=0

#114 Context on 08.29.16 at 9:50 am

The boomers went through tired times having a different woman every night as it wasn’t easy. A great night at the Coal Bin would cost $1.00 for an all you could eat buffet with a band and dancing but the beer was extra. One could go on Spadina Avenue and obtain a tailored made suit for $50.00 with the finest material coming from Europe. The cost of living was high for the boomers so stop complaining.

#115 Harry Hines on 08.29.16 at 9:50 am

So, let me understand this, 35% of the population works for the government and is set for life with luxury pensions and 1% ‘er status paycheques and the other 65% of the worker class is screwed by paying 80% direct and indirect taxes so as to pay for the piggish union luxury demands that have been allowed by our pandering politicians that have vaulted the unions to elite status while seniors starve and children’s schools are fight clubs rather than places of education.

This reminds me of the same dumb mindset that accepted Keynsian economics, “just two percent a year” until it’s 100% and why Keynes got laughed out of the room.

The union thing and the 30% elite civil servants thing living a life no other Canadian will know has to stop. The end will have to begin by throwing pandering dumb bunnies like Juice Box Justin Trudeau into the mistake file. This union/Liberal idea of ‘bread and circuses economics’ while they drain the country dry is just not possible to support long term, as we see from the quickly failing economy and the huge numbers of people unemployed.

#116 Capt. Serious on 08.29.16 at 9:56 am

Sometimes when I read these comments I think people actually believe that every country should have every industry and build every product domestically.
It’s a bit frightening.

#117 carlzika on 08.29.16 at 10:19 am

http://www.zerohedge.com/news/2016-08-27/%E2%80%9Ci%E2%80%99ve-never-seen-anything-housing-markets-hamptons-aspen-and-miami-are-all-crashing

Aspen, Miami,…..freefall….can YVR be far behind(okay, okay, it is not a luxury market….)

#118 Chimcham on 08.29.16 at 10:21 am

“With DB, employers take the risk. With DC, workers do.”

I don’t know if this is 100% true…

While employees on DB pensions don’t have a downside market risk, they do face the downside of incompetent pension management, such as when employers foolishly take a “contribution holiday” on years with good returns, only to turn around and face a funding crisis during a downturn. If the company is so poorly managed that it goes bankrupt, the pensioner might really get screwed, as we saw in Detroit. Because this could happen well into their career or even retirement, I’d consider this a “catastrophic” risk on the employee, albeit a low-probability one.

DC pension plans expose the employees to market risk (which over the span of a career is pretty low), and have the advantage of giving any market upside to the employee rather than the employer.

Personally, I’m a young-ish dude on a DC plan and I like it because:

A) It seems to be competently managed with a good asset balance It’s a fee-based type arrangement on a pretty large pooled account, and our internal committee reviews the service provider on a fixed term.

B) I get a statement every year letting me know exactly how much money I have, which gives me a good basis for retirement planning in terms of my other investments.

C) In the event that the company somehow messes up really badly, the specified amount of money in that account belongs to me, and is already fully-funded.

I’ve noticed that people who like DC plans tend to be more self-reliant in terms of work, investments etc., while people who prefer DB pensions want to be “taken care of” and not have to worry about where the money goes or where it comes from.

#119 Fiction writer Smoking Man on 08.29.16 at 10:25 am

#49 Smoking Man on 08.26.16 at 8:03 pm

I’ll never forget that interview at Canter Fitzgerald, my final obstacle, a tiny short woman, Vicky. About 6 months pregnant, Chinees, she outs me on my education, a total lie on the resume.
I pulled a photo of my kids out of my wallet , said I can do the job. This shits not taught at schools. I’m the best. I need a break for them… Please help me.
She put here hands on her belly, the kid was kicking.
She said. I know your a good family man… My son told me….
Then I was sent to the on boarding department.
Vicky up there somewhere I can assure you, those bastards that did 911 will pay…
I’m on it for you sweet lovely lady…. Who I see everyday in my thoughts..
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Your an excellent bullshitter. No wonder you like fiction.
There is no Vickie on the Cantor list.
http://www.cantorfamilies.com/

#120 Ace Goodheart on 08.29.16 at 10:31 am

Buy GICs for a fraction of a percentage point. Or buy bank preferreds (TD just announced another offering at 4.85%). Your money goes to the same place, but you get a much better return. These things usually flatline at $25.50 (redemption value) as there is really nowhere else for them to go. Banks don’t usually default on their preferreds and the dividends keep flowing.

#121 Jamie Dimon on 08.29.16 at 10:31 am

Garth! You are the man cool guy! I am picking out my DB plan next week. Thanks a million big guy keep up the good work.
Stay liquid my friends

#122 Jamie Dimon on 08.29.16 at 10:34 am

Hahaha! I’m an idiot I meant DC….okay I’m gonna go re-read the blog now and take notes

#123 NoName on 08.29.16 at 10:45 am

at thos very moment and looking at 25 wimd mills and only one out of 25 is spinning, there os a good chance that it something wrong with that unit…

#124 carlzika on 08.29.16 at 10:55 am

#45 Smoking Man on 08.28.16 at 7:39 pm
And this weeks attribution winner is.

Ryan.

With 160 comments vs Doug at 137 last week..

Doug, if you need help writing a gutsy post with soul fell free to ask.

Dr Smoking Man.”

I wonder which one of these 2 clean cut chaps will be the first to grow a facial scruff which ressembles the esteemed boss, and of course in order to generate some street cred!

#125 Outtahere on 08.29.16 at 10:55 am

This is a great post, Garth. Based on your previous advice, I was was planning on commuting my DB pension in three years (right before my 55th birthday) as afterwards I will not be allowed. My concern is the amount of tax that will need to paid..how do you minimize the amount of tax that will need to be paid against, say a $500k commuted pension? My husband and I have $0 RRSPs, would you stuff as much as you can into there? Thanks

#126 Adrian on 08.29.16 at 11:22 am

Thanks Garth. This (and the blog in general) is very helpful.

#127 Context on 08.29.16 at 11:37 am

#125 Ottahere: Which Province do you live in?

#128 Smoking Man on 08.29.16 at 11:57 am

#119 Fiction writer Smoking Man on 08.29.16 at 10:25 am
#49 Smoking Man on 08.26.16 at 8:03 pm

I’ll never forget that interview at Canter Fitzgerald, my final obstacle, a tiny short woman, Vicky. About 6 months pregnant, Chinees, she outs me on my education, a total lie on the resume.
I pulled a photo of my kids out of my wallet , said I can do the job. This shits not taught at schools. I’m the best. I need a break for them… Please help me.
She put here hands on her belly, the kid was kicking.
She said. I know your a good family man… My son told me….
Then I was sent to the on boarding department.
Vicky up there somewhere I can assure you, those bastards that did 911 will pay…
I’m on it for you sweet lovely lady…. Who I see everyday in my thoughts..
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Your an excellent bullshitter. No wonder you like fiction.
There is no Vickie on the Cantor list.
http://www.cantorfamilies.com/
…..

Ha you got me. I proud of being a bull shitter even thinking of starting a course.

15 years ago bud. cases and cases of wine and JD frying my memory since. I obviously forgot her name, or maybe that was it. ‘Its was something like that. I think.
I’m too busy watching my back yard grass growing tho care.

#129 Karl hungus on 08.29.16 at 11:58 am

Ummm…in a DB pension, employee still contributes. Check your paystub

#130 Ace Goodheart on 08.29.16 at 11:58 am

RE: “Soon I will tell you how much you’ll need to retire. So prepare.”

-my experience: I was looking at the various amounts paid out by defined benefit pension plans. It is not a huge amount of money and seems to be around $16,000 to $30,000 or so per year, based on a complex formula that takes into account all sorts of things including a person’s age and the years of service.

So I’m a venture capitalist, self employed, worked for six months for someone else and decided I hated it, never went back. I keep getting told by people that I need to “get a real job” and obtain a pension.

So I had a look at the situation.

I have managed to build a “machine” so to speak, made up of stocks, preferreds, income trusts and ETFs, that produces about $1600.00 per month right now in distributions. So that is money I get without actually having to do anything.

That translates into $19,200 per year. I am 43.

So I keep thinking to myself, why worry about a pension? I pretty much have already built one (albeit by accident, I wasn’t planning on retirement when I started putting this thing together, I was just investing).

At any rate, if you have a good investment portfolio then it seems that a pension really isn’t necessary. Likely the 25 years or so you have to put into getting said pension, and the paltry distribution you end up with when you finally do “retire” (whatever that means) is less than what you can get building your own ship, so to speak.

#131 Smoking Man on 08.29.16 at 12:01 pm

Milo holds back nothing.

Not agreeing or disagreeing. Just saying.

http://www.breitbart.com/milo/2016/08/29/the-washing-machine-and-the-pill-the-two-worst-inventions-in-the-history-of-humanity/

#132 james on 08.29.16 at 12:10 pm

#112 cramar on 08.29.16 at 9:39 am

Half of the high-paying jobs in America now require some coding skills:

http://www.marketwatch.com/story/half-of-the-high-paying-jobs-in-america-now-require-this-skill-2016-06-21
…………………………………………………………………
There you go Smoking Dude. At least $57K for you, now you can buy your booze instead of waiting outside the liqueur store for quarters.

#133 Context on 08.29.16 at 12:24 pm

#124 carlzita: – I feel sorry for Doug as he must feel down and out being thrown under the bus by the cruel elements in this room. I did not vote in this survey and who among you voted more than once for Sir Lew? I am sure Doug will make a come back and spring an October Surprise with one spectacular essay.

#134 Eks dee Sipal on 08.29.16 at 12:44 pm

#89 BillyBob… The American is a woman (based on a post she made a couple of years ago about a trip to Europe).
Hillary Green Screen: Hillary is Shirley Jones of Partridge Family, BTW.

https://www.youtube.com/watch?v=m-8iaJTC5jk

#135 Context on 08.29.16 at 12:52 pm

#125 Outahere: Every pension plan has its own set of rules and is subject to Provincial or Federal regulations. For example as at December 31, 2016 there will be changes going into effect depending on one’s Province and employer. Even the insurance companies are changing the taxation rules on non-registered money. Your answer is simple as in three years the rules will change and interest rates will be higher; relax as its too soon to worry about taxation for an event in three years time. On the other hand it is imperative to do something now, as you might need a fee based advisor to review the big picture as am sure there are things that need to be changed getting you ready along the way.

#136 Who luvs ya baby on 08.29.16 at 12:59 pm

#131 Smoking Man on 08.29.16 at 12:01 pm
Milo holds back nothing.

Not agreeing or disagreeing. Just saying.

http://www.breitbart.com/milo/2016/08/29/the-washing-machine-and-the-pill-the-two-worst-inventions-in-the-history-of-humanity/

….

Stepford wives really get you hot it seems… That’s what yer saying.

#137 TurnerNation on 08.29.16 at 1:07 pm

so far TLT.US is not reacting like a rate hike. Still at $140.
MIC orderly sell off.

#138 citation on 08.29.16 at 1:10 pm

#116 Capt. Serious on 08.29.16 at 9:56 am

Sometimes when I read these comments I think people actually believe that every country should have every industry and build every product domestically.
It’s a bit frightening.

===

Which posts are you talking about, specifically?

I can’t recall any with the sentiment of “every country should have every industry and build every product domestically”.

#139 The Nature Boy on 08.29.16 at 1:16 pm

I need advice from anyone: My wife and I have $70k in TFSA at 0,8% (PCF). Some obscure Ontario based credit union offer me 1,75%… My question is can I get a better rate anywhere else?
Thanks!

#140 The Nature Boy on 08.29.16 at 1:19 pm

Smokie: how much alcohol do you drink daily and how early do you start drinking?

#141 Damifino on 08.29.16 at 1:19 pm

#133 Context

“I feel sorry for Doug as he must feel down and out being thrown under the bus by the cruel elements in this room.”
———————————-

How come nobody feels sorry for Garth? You think just because his skin is 50 times thicker than the average human he doesn’t have the occasional cry in the copy room too?

If you want to present in a blog like this one you gotta have your big boy pants on. I’m far too much of a coward myself. But at least I know it.

#142 For those about to flop... on 08.29.16 at 1:25 pm

#108 not so fast there on 08.29.16 at 9:21 am
#45 Smoking Man
“Ryan. With 160 comments vs Doug at 137 last week.”

If you remove the dozen posts that Flop flooded the Saturday guest post with, and the dozen responses to his poll, Ryan and Doug are actually running neck and neck.
As long as Flop continues to co-host the Garth & Flop Blog, you can’t measure Ryan and Doug’s popularity by the number of comments.

///////////////////////////////////

No one moaned about us trying to find a consensus,it took a little longer than I had intended but we got there in the end….thanks guys.

////////////////////////////////////
Fair enough…
Above is a comment I left up thread.
I originally asked the question ” If you were allowed to live in the U.S which state would you choose?” on Wednesday afternoon.

It slowly snowballed into the weekend with some posters seeking clarification about are we looking to work there or can we pick north and south to beat the heat.

Anyway I had already decided that the myth that we all want to live as far south as possible was busted when my blog buddy NoName made up a poll of his own to make it easier for people to respond without my need to help them.

I did not have anything to do with this second poll ,but went along with it.

I did not want to know how popular/ unpopular I was.

I did not want to know what people did for a living.

I did not want to see who was more popular between Alf Lewenza and Robax ,but that’s what happened and you just gotta go with the flow.

I had no intention of interfering with Lewenzas post and had no idea people were counting and comparing the two.

That said, I meet some new people ,had some fun and was surprised by the lopsided result.

I also liked that it was done in a respectful manner with no one lobbying or calling each other idiots for choosing a certain state,there was no wrong answer as it would have affected no one else and was only hypothetical.

There will always be spirited debate going on this blog but isn’t it nice occasionally to get along with each other and find out what other people think in a cordial manner.

Each to their own I guess…

M42BC

#143 Insurance Guy on 08.29.16 at 1:46 pm

Agreed Ace. I’m around 35, married with a little guy. Have a portfolio of pretty safe assets spitting out about 1250 a month, which at this stage covers all my housing bills (tax, hydro, Internet etc). Not counting on any pension when I hit retirement age. Also hoping I never need to touch principle so I can leave something for my little one(s).

#144 Smoking Man on 08.29.16 at 1:59 pm

#132 james on 08.29.16 at 12:10 pm
#112 cramar on 08.29.16 at 9:39 am

Half of the high-paying jobs in America now require some coding skills:

http://www.marketwatch.com/story/half-of-the-high-paying-jobs-in-america-now-require-this-skill-2016-06-21
…………………………………………………………………
There you go Smoking Dude. At least $57K for you, now you can buy your booze instead of waiting outside the liqueur store for quarters.
…..
Don’t beilive everything you read in MSM

Bull shitters that can develop swap pricing tools, and text encryption(Not desclosing $$$) do a bit better than 57k..

Not to mention.

A wee bit of forex right now…Eat your heart out lefty.

USDCAD CADUSD COST
1.30043 0.76905 116,452

Ave Buy In 1.2874 117000 536,275
TYPE QTY Price At Risk $.$$ P&L
Contracts 50 1.2774 13000 115,275
Contracts 100 1.2824 26000 180,250
Contracts 100 1.2874 26000 130,250
Contracts 100 1.2924 26000 80,250
Contracts 100 1.2974 26000 34.850

#145 jess on 08.29.16 at 2:10 pm

regulating the vultures?
implications of an accelerated disposal

The European Central Bank is conducting a Europe-wide review of NPLs(non performing loans )

http://www.independent.ie/business/irish/finance-fears-the-broader-impact-of-sale-of-bad-loans-35002567.html

#146 jess on 08.29.16 at 2:15 pm

#132 james on 08.29.16 at 12:10 pm

egads robot programmers!

Researchers warn that a glut of code is coming that will depress wages and turn coders into Uber drivers, InfoWorld reports.
http://www.infoworld.com/article/2885973/application-development/watch-out-coders-a-robot-may-take-your-job-too.html

#147 Londoner on 08.29.16 at 2:18 pm

#120 Ace Goodheart

Maybe the question we should be asking is why the banks have suddenly started offering higher spreads on reset vs only a couple of years ago.

#148 Context on 08.29.16 at 2:19 pm

#132 james:- You must be kidding about $57K for the Smoking Man. It wouldn’t even cover his initial start up employment bonus as he is highly qualified. Now if you were talking about $200K as a starting salary he might become interested depending on his expense account allowance.

#149 The Wet Coast on 08.29.16 at 2:25 pm

Garth,

I am an engineer and I have spent a lifetime looking at data. So a question. When you say Canadian household debt is a record levels. Where does that data come from? The banks? When a foreign national buys Canadian real estate with help [email protected] how is that differentiated from a loan Bob from Saskatoon takes out? I know its only 10% of all real estate purchases. But the loans are in the highest cost regions of the country.

#150 Context on 08.29.16 at 3:03 pm

#149 The Wet Coast:- Engineer what university did you graduate from? Canadian household debt has gone ballistic and one only needs intuition to ascertain this result. It should be self evident that the greater fools have bought condos and traditional housing with debt financing. In other words they bought debt with cheap money and the day of reckoning is about to come when their equity is gone poof.

#151 Smoking Man on 08.29.16 at 3:19 pm

#146 jess on 08.29.16 at 2:15 pm
#132 james on 08.29.16 at 12:10 pm

egads robot programmers!

Researchers warn that a glut of code is coming that will depress wages and turn coders into Uber drivers, InfoWorld reports.
http://www.infoworld.com/article/2885973/application-development/watch-out-coders-a-robot-may-take-your-job-too.html
…………………………………………….

Of course, the world changes.You just need to adapt, hard for the schooled who only see out of one eye.

My CV

Barley graduated grade 12.

Door knocker , filter queen vacuum salesmen while in school.

Rivet Bucker airplane factory.

Factory Owner, Windows, and Door
Import Export Company Owner.

Contractor Code Smith for Hire.

Contractor Code Smith Trading Floors Hedge funds and banks, Fixed Income.

Contractor to an Election Campaign

Soon to be Published Fiction write.

More Drinking.
More Writing
More Drinking
More Writing
More Drinking
More Writing
More Drinking

An Early Death It’s been fun….

#152 Smoking Man on 08.29.16 at 3:28 pm

I can’t wait for the Hillary Donald Debates.

200 million viewers around the world, heavey weight title of the century.

And now this tweet for The Donald on Hillarys right hand woman.
…………………………….

Donald J. Trump ✔ @realDonaldTrump
Pervert alert–serial sexter @RepWeiner is making another step towards a comeback http://nydn.us/SdWiPd All girls under 18 should block him.
4:31 PM – 28 Nov 2012

#153 Grey Dog on 08.29.16 at 3:29 pm

Nature Boy; do NOT give PACE any of your hard earned money. Last year Hubby wanted his $9,000 RRSP established probably decades ago to roll into to account with Independant Financial Advisor of our choice. Everyone else complied. PACE refused apparently voted on it NO. The instant hubby is retired he will be in there WANTING HIS RRSP. He turns 65 next year.
Makes one wonder if PACE is in trouble overextended.

#154 Smoking Man on 08.29.16 at 3:36 pm

The wall and fear of being publicly shamed supporting trump in public is coming down fast…..
Bet Accordingly.

https://www.youtube.com/watch?v=7Ag8dmCQN0E

To be a fly on the wall at the next Davos
https://www.weforum.org/events/world-economic-forum-annual-meeting-2016/

#155 NoName on 08.29.16 at 3:38 pm

it is fuuny to see all those unemployed long form staticians came out from woodwork. what is more troublous is that tey are after floppy and dude don’t have anything to do wit it.

mother fathers leave floppy alon.

NoName

#156 Tkid on 08.29.16 at 3:42 pm

#138, why are you unwilling to invest your money in the bank but you will put your money in the bank?

What is the difference?

If I purchase $70,000 of CIBC shares I get a rate of return of over 4%. If I do this through BMO’s self-directed account, i am covered by CIPF for up to a million dollars. But if I walk through the front door of TD and buy a GIC, I am covered by CDIC for $100,000.

I know, stocks are scary. GICs aren’t. But it actually the other way around – it is the GIC which is scary because it won’t match the date of inflation.

I had to come here to learn this. Oh, to have learnt this when I was younger. I will never again buy a GIC – even if the shares of CIBC go down in value, they will recover. And a balanced portfolio is the best way to go.

#157 Tkid on 08.29.16 at 3:44 pm

Date of inflation … Rate of inflation

#158 Rakiki on 08.29.16 at 3:46 pm

Excellent post. My wife and I have federal DB plans. They are a fine savings tool. The risk however is that the unfunded liabilities come back to haunt us. We are contributing more and more to our plan, and that is eroding our net income. Our contributions have increased 0.90% of salary this year following a series of 0.60%-ish increases. With the added effect of inflation and little to no pay increases, our purchasing power is eroding by 2-3% per year. Most of my colleagues have no idea how this will grind them down over time. We are fortunate enough to have other savings, invested 100% equities with a tilt to dividend growth. At least the divvies are fighting inflation for us. *Also note that the pension plan is not subject to collective bargaining. The government can modify it at will.

#159 Context on 08.29.16 at 4:02 pm

#153 Grey Dog:- I don’t particularly care about any Credit Union as know the inside and you would be shocked what they are doing with lending investments on Real Estate. Pace may have said no as it didn’t qualify for a transfer depending what it was invested in such a locked in GIC for example or an instrument with a fixed term.

#160 };-) aka Devil's Advocate on 08.29.16 at 4:05 pm

#5 David on 08.28.16 at 2:54 pm
“65% of us (2011 numbers) have no pension.” And the postal workers are thinking of going on strike over their champagne pension? They should be satisfied with what they have and not try to hold the rest of us for ransom.

Seriously, toast Canada Poste. Who needs it? Really. Get rid of it and those high paid jobs from the Carrier to the CEO.

#161 The Wet Coast on 08.29.16 at 4:12 pm

Context on 08.29.16 at 3:03 pm

University of Calgary if you must know. Please define for me what a “Canadian” is for debt calculation purposes? A citizen? Is the calculation as simple as (total consumer debt)/(the number of Canadians). If total consumer debt includes debt being incurred by non Canadians the number is being overstated. Maybe by a lot. Not that consumer debt isn’t higher, it likely is. What I observe is folks who throw around numbers like they are set is stone and don’t question the underlaying assumptions…dangerous.

As Mark Twain said…”Lies, Dam Lies and Statistics”

#162 Nuke on 08.29.16 at 4:15 pm

If you are 60 or older The DB with either a top tier bank/insurance company or government are great. I calculated that of the $8,000 I have to put in each year, the employer needs to fund it by about $25k. A basic 60 year old with a $30k Ontario Pension with normal years of service is well north of $1,000,000 if it was commuted. Of course there is also the paid for lifetime medical and extended health care benefits 100% paid by the government. (changes to 50% Jan 1 – so lots of people retiring, but not as many as hoped)

#163 Wild Albertan Gonads on 08.29.16 at 4:16 pm

#151 Smoking Man on 08.29.16 at 3:19 pm

#146 jess on 08.29.16 at 2:15 pm
#132 james on 08.29.16 at 12:10 pm

egads robot programmers!

Researchers warn that a glut of code is coming that will depress wages and turn coders into Uber drivers, InfoWorld reports.
http://www.infoworld.com/article/2885973/application-development/watch-out-coders-a-robot-may-take-your-job-too.html
…………………………………………….

Of course, the world changes.You just need to adapt, hard for the schooled who only see out of one eye.

My CV

Barley graduated grade 12.

Door knocker , filter queen vacuum salesmen while in school.

Rivet Bucker airplane factory.

Factory Owner, Windows, and Door
Import Export Company Owner.

Contractor Code Smith for Hire.

Contractor Code Smith Trading Floors Hedge funds and banks, Fixed Income.

Contractor to an Election Campaign

Soon to be Published Fiction write.

More Drinking.
More Writing
More Drinking
More Writing
More Drinking
More Writing
More Drinking

An Early Death It’s been fun….


Ok….. “Contractor to an Election Campaign”… is even an ounce of that true!!?? or are you spewing again??

That would be a sorta interesting story… what’s the scoop?

I thought you moved to Boston to flee the commies!

#164 For those about to flop... on 08.29.16 at 4:31 pm

#155 NoName on 08.29.16 at 3:38 pm
it is fuuny to see all those unemployed long form staticians came out from woodwork. what is more troublous is that tey are after floppy and dude don’t have anything to do wit it.

mother fathers leave floppy alon.

NoName

///////////////////////////////

It’s o.k NoName, there will always be a few knockers.

What the person said was kind of true ,but if someone takes the time to write me in a jovial or friendly manner if I have time I will try to write back to help them out or further explain my point of view.

I don’t have a pension plan nor will I probably ever ,so I just posted a cartoon yesterday to make a few people smile and stayed out of it.

You get out of this blog what you put into it.

I get lots…

M42BC

#165 drydock on 08.29.16 at 4:32 pm

#67 Boomer Death Counter on 08.28.16 at 9:46 pm

Of course, the big issue behind all this pension talk is how the boomers have taken so much more out of society than they will ever contribute, leaving scraps and debt for the rest of us.

The good news is that the overwhelming majority of boomers will be deceased or seriously impaired/in decline by 2024. That is barely 7 years from now. And the political power of boomers has already been eclipsed and will dramatically decline from here on in.

Bye bye, boomers.

Enjoy your pensions. Big changes coming to the tax system, including wealth transfer taxes, windfall real estate profit taxes and mega inheritance taxes, to sort out the mess you have created, this ridiculous wealth and opportunity gap.

And since our health care system won’t be able to afford to care for you within barely 3 years, you’ll be taking out reverse mortgages to pay for private PSWs to change your Depends. Good luck with that as real estate crashes.

I personally wish you boomers no ill will.

But, reality always has its own way to return to bite us all.

01010101010101010101010101010101

Throwing blood in the waters, troll?

#166 Metaxa on 08.29.16 at 4:32 pm

3115 Harry Hines writes:
…The end will have to begin by throwing pandering dumb bunnies like Juice Box Justin Trudeau into the mistake file. This union/Liberal idea of ‘bread and circuses economics’ while they drain the country dry is just not possible to support long term, as we see from the quickly failing economy and the huge numbers of people unemployed.

Since the 60’s Canada has been governed by both Liberal and some form of conservative government and basically its been 50/50. You may recall that most recently it was a decade of Stephen Harper’s Conservative Party of Canada holding the reins.

Are you asking me to believe that the Liberal Party, in power less than a full year, is totally responsible for this mess we now face?

Policy choices made years ago are coming home to roost yet you would hold it out that this is Trudeau’s fault?
Global issues impact the country yet that too is all Trudeau’s fault?

We have folks on this board who cheer Brexit yet can’t wrap their head around what happened in Alberta because of what?

Maybe because the local and national Conservative Party’s can’t even find someone palatable enough to the general population to be party leaders?

Look at Kenny double dipping away…look at the former leader who until just late last week was double dipping away…look at the so called social conservatives who wish to lead the national party. Canadian women of any political strip will not stand for that, nor will their husbands, fathers , brothers and lovers.

But out they come, and that my friend is not conservatism that is benign and has mass appeal, it is religious based, faith based promises of government intrusion into peoples lives.

No, get over slamming Trudeau and begin to look to your Party…ask them why they are not electable and will remain so for the foreseeable future.

Solve that and you won’t have to worry about Justin…

#167 Context on 08.29.16 at 5:04 pm

#160 Metaxa :- Harper the so-called economist could have retired early under the old pension rules and rode his horse back to Alberta as could not read the writing on the wall. Instead he went down as a loser and blew away 10 years of retirement income amounting to about $2 million. This clown was in charge of your tax dollars and look at the mess he left this country in.

#168 Smoking Mann on 08.29.16 at 7:29 pm

#116 Capt. Serious on 08.29.16 at 9:56 am
Sometimes when I read these comments I think people actually believe that every country should have every industry and build every product domestically.
It’s a bit frightening.
========

don’t worry, canadians are weak, socialist, feminist-pandering and lazy as f–k.

Other countries will create their own industries. Canadians will just pay taxes upon taxes to keep each other employed…

#169 genbizx on 08.29.16 at 9:30 pm

david # 5

canada post pension change will only affect new hires and current relief (casual carriers) so the issue is not should they keep it but should the excesses of the past be put on the shoulders of current workers (as always happens in this country)

#170 Brazil ex-pat on 08.30.16 at 3:12 am

#102 crowdedelevatorfartz on 08.29.16 at 8:20 am
@#74 Brazil ExPat
“Go watch every clip from Dinesh D’souza…..then come tell us what a racist the Donald is.”
*******************************************
Dinesh D’Souza. Now there’s a name that means a lot.
Nah, rather than listen to the internet ravings of another conspiracy theorist loon.

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

Your listening to internet ravings now genius.

#171 crowdedelevatorfartz on 08.30.16 at 8:11 am

Dinesh DiSouza
Another Republican born again christian loon convicted of a criminal offense and imprisoned.
Thats quite a resume’
Methinks he enjoys listening to himself espousing his endless drivel almost as much as you.
You just keep bowing down to his Boomer, pseudo intellectual propaganda like all the other mindless sheeple.

I’ll pass.

Speaking of prison …..has Dilma been jailed yet?

#172 waiterextraordinaire on 08.30.16 at 8:35 am

Male
57 years old
Waiter
Married 20 years
14 and 12 year old boys
Lived out of a suitcase till I got married.
Wrote a book about it.
Wife waiter as well
Total income $60,000
Sold our condo now rent
$50,000 savings now car broke down
Looking forward to trailer life at 65.
Been a good life though!