I agree with Valerie that expectations from boomers are outsized. Every financial planner talking to a soon to be retiree tries to maximize CPP and OAS income no matter how wealthy a boomer might be in terms of assets. It’s free government benefits (esp OAS) so you’d be a bad financial planner not to plan to take as much as you can get.
And then there’s the life expectancy issue... retirement age was based on actuarial calculations. Back in the 1970 life expectancy was 72 years old. In 2023 it is 83 yrs old.
So government pensions and OAS need to paid out at least 10 yrs longer than originally planned for. This is particularly painful when it comes to OAS since it comes from general tax revenues.
So should benefits now start at 75 years old? Would seem to make sense...
One thing that makes it super hard in my experience to convince older people that they underpaid for OAS (and healthcare) is that it's not just that governments failed to plan for baby boomers' retirements, but that they allowed that unusual demographic tailwind to set people's expectations for what safety nets should be able to do and at what price. Canada got universal healthcare federally in 1968 (oldest boomers 22). GIS was introduced in 1967 (oldest boomers 21). The age to receive OAS started to be lowered to 65 in 1965 (oldest boomers 19). Even the CPP (although it was since fixed) was brought in with an unsustainable pay-as-you-go form in 1966.
So even if you manage to convince someone they underpaid, they might respond: yeah, that's how it works! We just never really had a recognizably-modern system that even accounted for a stable population, let alone a big demographic bulge like the baby boom.
That's an interesting observation Valerie! I hadn't ever considered that even if we manage to get people to recognize that they underpaid, they might still think that's just how things work. Thanks for pointing this out - we'll make an effort to specify that this is not how it should work, nor is this a sustainable way for things to work, when discussing this topic going forward.
I agree with Valerie that expectations from boomers are outsized. Every financial planner talking to a soon to be retiree tries to maximize CPP and OAS income no matter how wealthy a boomer might be in terms of assets. It’s free government benefits (esp OAS) so you’d be a bad financial planner not to plan to take as much as you can get.
And then there’s the life expectancy issue... retirement age was based on actuarial calculations. Back in the 1970 life expectancy was 72 years old. In 2023 it is 83 yrs old.
So government pensions and OAS need to paid out at least 10 yrs longer than originally planned for. This is particularly painful when it comes to OAS since it comes from general tax revenues.
So should benefits now start at 75 years old? Would seem to make sense...
One thing that makes it super hard in my experience to convince older people that they underpaid for OAS (and healthcare) is that it's not just that governments failed to plan for baby boomers' retirements, but that they allowed that unusual demographic tailwind to set people's expectations for what safety nets should be able to do and at what price. Canada got universal healthcare federally in 1968 (oldest boomers 22). GIS was introduced in 1967 (oldest boomers 21). The age to receive OAS started to be lowered to 65 in 1965 (oldest boomers 19). Even the CPP (although it was since fixed) was brought in with an unsustainable pay-as-you-go form in 1966.
So even if you manage to convince someone they underpaid, they might respond: yeah, that's how it works! We just never really had a recognizably-modern system that even accounted for a stable population, let alone a big demographic bulge like the baby boom.
That's an interesting observation Valerie! I hadn't ever considered that even if we manage to get people to recognize that they underpaid, they might still think that's just how things work. Thanks for pointing this out - we'll make an effort to specify that this is not how it should work, nor is this a sustainable way for things to work, when discussing this topic going forward.
Generation Squeeze is well on track!