ageing canadians, implications

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/stephen-gordon/canadian-population-by-age-2010/article2039509/?from=2039511

Scary - we are just now seeing the tip of the iceberg, with early retirements.
In 15 years, the damage will largely be done.

And at a time when pensions were largely off the radar as election issues!

http://www.theglobeandmail.com/report-on-business/middle-class-retirement-outlook-takes-hit/article2002892/

A new study by the Montreal-based Institute for Research on Public Policy shows that about half of middle-income Canadians born between 1945 and 1970 are likely to face at least a 25-per-cent drop in their disposable incomes when they retire. Middle-income is defined as earning an average annual lifetime income of between $35,000 and $80,000.

D - I have 2 words. So. What.

The Mintz study concluded Canada’s pension system is “performing well” and said 80 per cent of households are saving enough to replace 90 per cent of their working income in retirement.

He said his analysis also found that several bold reform proposals that have been floated – including doubling the Canada Pension Plan and improving the Old Age Security system – would not significantly improve retirement incomes for baby boomers.

Under the various reform scenarios, middle-income earners would see their average after-retirement income compared to pre-retirement income improve between four to eight percentage points for people born from 1960 to 1965, for example.

the IRPP report concludes “more much ambitious reforms than the ones being considered will be required to improve the adequacy of retirement incomes.”

Mr. Wolfson argues Canadians should be willing to open a debate about granting improved Canada Pension Plan benefits to baby boomers even if they haven’t earned them, arguing there is plenty of historic precedent for speeding up eligibility.

D - I've already outlined how the Boomers have received a free - or heavily subsidized- lunch on pensions.
And keep in mind that the tax base will shrink exactly when age-related health costs and social program usage is spiking.
In that context, this proposal is indefensible.

I saw an article in the Record this week proposing we hike CPP pay-in rates by c. 1/2% per year to address middle class retirement income.
The only advantage of this is that it would at least ding retiring Boomers for 1-15 years for their own retirement costs.
Having said that, ensuring the long-term viability of the pension plan has yet to be addressed. First things first.