Most Canadian workers have no pension plan
Most Canadian workers have no pension plan. That is a staggering thought on its own; however, when you consider that 6 out of 10 Canadians have no plans for retirement and when you factor in the number of ageing baby boomers – yikes! There is a real concern about retirement and pension anxiety.
OAS is one of the largest and most expensive federal programs. It is expensive because everyone over the age of 65 is entitled to a monthly cheque (currently around $564). The Gen Xers are concerned that the well may run dry before they are ready to retire. They have reason to be concerned given the numbers of Baby Boomers in the Canadian population that will draw on OAS before they get there.
The government is aware of this threat to Canada’s retirement system and has made changes to ensure OAS is sustainable for the next generation. Specifically, the eligibility age to receive the OAS pension has been moved back to age 67 (from 65) for anyone born in 1963 or later.
Unlike the Canada Pension Plan (CPP), OAS isn’t a savings program funded by the individual income earner – instead, it is funded by the current taxpayers. Back in 1970, there were seven workers for each retiree. Today, the number of workers is down to four, and it is predicted that in just over a decade, that ratio is expected to be 2:1. There lies some anxiety, for certain.
Planning is the best cure for this anxiety.
- Plan your lifestyle
- Plan for the cost
- Go looking for income!
Relying on CPP and OAS alone can be risky. There are many options out there to help supplement your retirement income. RRIF’s, Annuities, other Pension plans and many more.
At McDougall Insurance & Financial, we have specialists that can help you plan for retirement. Call us today!