Government lowering retirement age back to 65

[Veovis]

No argument there. However, the reality of the situation is there are still many people who, for whatever reason (stupid, lazy or just unfortunate) are still going to depend on it.

And those people get to live a lot thinner than the people who didn't, and that is the reality of it as well. Those that wanted to spend today don't afford nice Kelowna retirement later, they end up having to go somewhere where they can rely on the funds they have.

That is reality and not a bad one, if you rely on little, accept you will have to survive on little.

[Ka-El]

And those people get to live a lot thinner than the people who didn't, and that is the reality of it as well. Those that wanted to spend today don't afford nice Kelowna retirement later, they end up having to go somewhere where they can rely on the funds they have. That is reality and not a bad one, if you rely on little, accept you will have to survive on little.

C'mon Veovis, no one is arguing they should be retiring poolside. My retirement is only six years away and my plans include a new condo in the South Okanagan, a golf course membership and winters spent travelling warmer climes. I’m actually in pretty good shape too, and expect to be golfing another twenty years at least (maybe the last five or so with a power cart). I've worked for that. But you know what? I don’t have to go see seniors working at Wal-Mart to make me feel good about myself.

[Veovis]

And I hope to get that some day as well. I also know my father who never planned well for retirement, yet manages to live quite happy with what little he has, heck the OAS was like a yearly lotto win according to him. However he also knows he isn't moving here any day if ever. (maybe someday I can have a place with a suite he can live in but that is in time)

If I offered him money, he would say no, why, because one he is happy, and two, he knows that he made that bed and he will sleep in it.

Some Seniors actually work at Wal-Mart as something to do as well as many other places will not hire them, others because they have to. The difference? Choice, and the repercussion of those choices.

[rustled]

...There are a lot of ways CPP can be improved on without making people wait longer to be eligible to collect it....

Just pointing out the CPP program wasn't affected by the date change. That affected the OAS (GIS) program.
http://www.esdc.gc.ca/en/cpp/oas/index.page

The Government of Canada, in Budget 2012, announced three changes:

The age of eligibility for Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS) will gradually increase from 65 to 67 over six years, starting in April 2023. The ages of eligibility for the Allowance and the Allowance for the Survivor will also gradually increase from 60 to 62.
As of July 2013, a voluntary deferral of the OAS pension allows you to delay receipt of your OAS pension by up to 60 months after the first date of eligibility in exchange for a higher monthly amount.
An automatic enrollment process will eliminate the need for many seniors to apply for the OAS pension. This change is being phased in gradually starting in April 2013.

I wonder if they're keeping the changes to the allowance eligibility age, the voluntary deferral, and the automatic enrollment process.

There's one number on that page that really made me sit up and take note, the maximum income before the OAS paid for the previous taxation year is clawed back. And at that income threshold I'm curious as to why it's getting paid out in the first place instead of being invested for those who actually need it. Maybe that's another place to consider making changes.

Interesting calculator here http://www.esdc.gc.ca/en/cpp/cric.page for those who are interested in doing a bit of planning.

[SmokeOnTheWater]

Just pointing out the CPP program wasn't affected by the date change. That affected the OAS (GIS) program.

There's one number on that page that really made me sit up and take note, the maximum income before the OAS paid for the previous taxation year is clawed back. And at that income threshold I'm curious as to why it's getting paid out in the first place instead of being invested for those who actually need it. Maybe that's another place to consider making changes.

Indeed the change was only for OAS.
You can still collect CPP as early as 60 years old with a 30 % reduction ( 6 % per year ).
There has been talks about high income in retirement not receiving OAS in the first place before.

[Veovis]

There has been talks about high income in retirement not receiving OAS in the first place before.

Pretty sure around 70K it already gets clawed back, however today that is a decent retirement income (assume no debts), but in 15-20 years 70K might be a low retirement income.

[SmokeOnTheWater]

Pretty sure around 70K it already gets clawed back, however today that is a decent retirement income (assume no debts), but in 15-20 years 70K might be a low retirement income.

Full clawback ( elimination ) is now at $117,000.
I know they were talking about lowering it further. That was a few years ago. I can't remember where I heard that.

The government imposes a special tax—the “clawback”— on your Old Age Security (OAS) payments if your net income for the year exceeds a certain annual threshold. For 2015, the threshold is $72,809. The amount of the clawback is equal to your OAS payments or 15% of the amount by which your net income exceeds the threshold, whichever is less. For the 2015 year, assuming you start to receive OAS benefits at age 65 (see below) the full amount of the OAS benefit will be eliminated when your net income (including your OAS benefit) is just over $117,000. The clawback amounts are repaid through withholdings from your monthly OAS payments.

http://www.taxplanningguide.ca/tax-planning-guide/section-2-individuals/old-age-security-oas-clawback/

[Glacier]

It's best to go self employed now and share your income with your wife. In addition to income splitting, your income is after expenses, not before it is with employees.

[Rwede]

*removed*

[Muzza]

It's best to go self employed now and share your income with your wife. In addition to income splitting, your income is after expenses, not before it is with employees.

Or, in my case (no wife), if taxes get too high, once my son is on his own in a couple of years, I will move to a lower tax jurisdiction, and telecommute, paying local taxes instead of Canadian taxes (unless maybe I can get my ex to pay the many years of child support she owes, instead of her regular vacations to Mexico and Cuba ).

[maryjane48]

removed. Stay on topic.

[Veovis]

It's best to go self employed now and share your income with your wife. In addition to income splitting, your income is after expenses, not before it is with employees.

If that is ever possible it is a good way to do things, just remember if CRA asks you need to show value for what you pay to a spouse.

That concept of proper income distribution along with, CPP, OAS, RRSP, TFSA, Pensions etc etc etc, all of it, are part of the overall issue, a long term financial plan. CPP is forced retirement savings, OAS is a nice bonus, but the rest is up to individuals/families.

A prevalent attitude has become "only the rich can save/plan ahead" (untrue of course) the real thoughts happening are "I don't want to" "my employer should do it for me" and "the government should just make me comfortable when I want more some day"

With the average age increasing year by year, plans need to change, I don't think I'm a likely 90 year old candidate, but maybe, so I will plan for at least that, the government plans will likely provide less and less, as will a lot of other pensions as they get into tighter fiscal positions. The only thing I can control to the biggest degree is my own money, that will be what I try to rely on and the rest can be for vacation funds.

To be honest, I'd like a boat, and trips, and a nice car, but I also don't want to be in poverty when I'm old, and I want my kids to not get buried by student loans.