This article goes back to population and demographics that we studied and it has a lot to do with your future. Even if you don't post about it; you should still read it.
1) How does this make you feel? Are you worried about your future?
2) Should you be worried?
3) Is this something we can change?
4) What should you do to protect yourself from financial ruin when you get older?
http://www.cbc.ca/news/politics/retirement-health-care-generations-taxation-1.3552609
As we're all finishing high school and about to step into post secondary or the work world, this is becoming important for us to start learning and understanding. In Canada we get taxed, and have deductions like EI, CPP ect. Parts of these deductions go toward pension and health care but as the article stated it's just supporting the retired people. This does worry me a bit because that means that we need to rely on younger generations to support us when we retire. Despite the worry I have, I don't think that it is as worrisome as other countries around the world. One source ranks the top 10 countries as far as their retirement systems and Canada ranks fifth only to be beat by Australia and wealthy European countries. This implies that even though the younger generations are supporting the retired, it is still considered an effective system. However, some may still feel the need to protect themselves in the case that an event occurs and there is not enough support. Some methods of protection would be to put money away in bonds, GICs, RRSPs and potentially investments like shares or property that could be sold. As much as this could be considered an issue within Canada and many people are worried, this system is many times better than systems seen throughout much of the world. Compared to Africa and parts of Asia our system would be seen as flawless. When put into perspective I believe that Canada is doing well when it comes to our retirement and if individuals desire to retire earlier than 65 or 67, they should start to save for it early in their lives.
ReplyDeletehttp://www.thinkadvisor.com/2011/11/07/top-10-countries-with-best-retirement-systems?slreturn=1462022422&page=11
https://www.ssa.gov/policy/docs/progdesc/ssptw/2012-2013/africa/chad.html
http://www.pensionfundsonline.co.uk/content/country-profiles/china/105
In theory I think Canada has a good retirement plan, but in practice not so much. After I graduate university, I will have a significant amount of student debt, and hopefully a good entry job. Let's say I make $45, 000 after taxes. After paying the minimum payment on my loans, buying groceries, paying an expensive rent since I have no money for a downpayment on a home, paying for transportation, I am left with no money to put in bonds or RRSPs. Maybe the company I work for has a 401k, but I don't make nearly enough money to put enough money in it to assure the security of my future. And all of this is only if I am able to get a good entry job, which is hard to do because a lot of baby boomers aren't retiring because they also feel like they don't have enough money. So yes Canada has a solid plan for saving early, but saving early is easier said than done.
DeleteI think we should be worried because as soon as the baby boomers retire all at once and start needing more health care, taxes for us are going to sky rocket and by that point i think the government might decide to push the retirement age up more from that.
DeleteOur parents teach us at a young age to save money, they start saving almost before we are born to pay for post-secondary school. If you see how many people are well off and can afford things it must mean it is doable and we have tons of support. We have good saving plans and many government funded organizations do help us.
DeleteI understand your point about how successful Canada's retirement system is, but do you think that with the many elderly from the baby boomer generation that the millennial generation will be affected more than previous times due to the fact that there are so many baby boomers and so little of us, as shown by the total fertility rates?
ReplyDeleteGood point by Rianne. Fertility rates are significantly dropping and in Canada we have been under the replacement level for decades. There will be even less younger people to basically pay for our retirement so I myself am I bit worried for our future
DeleteI know I'm definitely worried because as Leah said Canada has been under the replacement level for a long time. With the number of elderly people rising faster than the number of younger people we will eventually reach a point where we won't have enough people to look after all of them. This could mean that the retirement age goes up anti likely will as it has in the past when circumstances such as this one arises.
DeleteYou brought up a very good point Rianne. Canada's dependency ratio continues to grow due to longer life expectancy and a lower fertility rate. Our generation will be the first and the most heavily impacted generation. In Canada, the working generation supports the younger and older citizens. If the working generation has to support others, how can they support themselves?
DeleteMARK THIS ONE: After reading the article, I am quite concerned for our generation. Although Canada is not considered the country the most drastically affected by it, we are still quite highly ranked. As we are now going off on our own, I think we will have a better understanding of the severity of the situation because we will be in charge of our expenditures and incomes.
ReplyDeleteI am worried about my financial future. My greatest concern has to due with the article directly: there will be a massive reduction of take-home pay due to the introduction of higher taxes in order to offset health care for senior citizens. I am also concerned because of what we had talked about in class: if I have to pay more taxes, I might not have enough money to retire at a comfortable age. Also, we have to remember that many job posts will disappear due to the the fact that computers will be able to do those jobs. Because our generation will likely have less take-home income and a lesser availability of jobs, I am concerned for our incomes.
I think we should be concerned, but we shouldn’t waste away our lives in worry about the future. Of course, we should take care and try our best to positively affect the future, but if we only focus on that, then we will not have a very enjoyable life. As we learned in class, dependency load has a serious affect on the the population of Canada, but there is nothing we can do to change how large our dependency load currently is; we can only prepare for how we will deal with it financially.
Although we can not change the amount of seniors we have living in Canada, we can change our fate. Firstly, we should impose a slight tax increase on foreign exchange. If this is put into place immediately, then Canada will be much more prepared to deal with the enlarged dependency load. It is also important to note that the amount of births/children per family in Canada is decreasing. This means that Canada will have some extra money because they will not have to supply as many Child Benefit cheques and will have lesser amount of child health care to pay.
To protect ourselves from financial ruin, I think that we should be observant and vigilant of our finances now. We should try and save as much money as we can, instead of spending it on disposable things. We can also do some research on the job projections of the future. If we know what jobs will be needed in the future, then we could get education for the job now and eventually make more money due to society’s need. I believe in class that we learned that the future needs workers in the trades. So, if someone prepares to enter a trade now, they will be needed in future (allowing them a steady income).
Citations:
http://www.cwhn.ca/en/node/44164
http://www.theglobeandmail.com/life/health-and-fitness/health/health-care-may-tarnish-golden-years-baby-boomers-fear
I agree with Brittany and am also very concerned for my future. Because our generation is so small and all of the baby boomers are now retiring it means that we will most likely work for a longer period of time and retire later in life.
DeleteMark This One: After finishing reading this article I became worried for people in our generation and the ones to come. Even though Canada won't feel the biggest impact from this change, I believe it will still largely affect my life. The article states that “the retiring cohort is the baby boomers… whose needs may be unaffordable to the smaller, less-entitled generations coming up behind them who'll be stuck with the bill..” I don’t believe everyone should be worried because you’ll miss out on life if you live it all in fear/worry; however I think everyone should get themselves informed and prepared for these things to take place. Perhaps as a society we need to change the norms of being a “DINK” and living in a 500,000 dollar home, but instead living in a one bedroom apartment or as a society, having children at an earlier age. Although having kids earlier wouldn't necessarily work by the choice of society, perhaps the government seeing this, might put in new rules for the next generations to be successful as this would largely affect our economy. The easiest way to protect myself from financial ruin as I grow up is to save. As we’ve learned in class, the smaller you live the more freedom you have. However, when you think about WWII, not even country fought; therefore not every country would undergo these changes so if it means the well-being for the family I am about to raise, moving to a different country might just be the solution I was looking for to solve this issue.
ReplyDelete