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Retirement Is Dead

macleans.ca

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Re: Retirement Is Dead

#31

Post by laurencerowe »

throw0101d wrote: post #30
laurencerowe wrote: post #27

Earlier quoted context omitted.

> once your income is CAD >95k/indiviudal OAS starts getting clawed back (IMHO it should be clawed back much sooner). The downside of means testing pension payments is that it acts as a disincentive to discretionary pension saving. The previous UK system (pre-2009) was an extreme example of this where those without additional pension savings got topped up with pension credit (GIS equivalent) that was clawed back at 1…

Someone making CA$ 90k will get the full OAS. If they have a spouse who makes $90k, they will also get the full amount. So a household with $180k income is getting a bunch of government money. Why does a couple with $180k HHI need to get anything?

Broad based benefits tend to receive more public support. Just tax those with high incomes to get it back. Otherwise the bumpy effective marginal tax thresholds (which increase and the decrease again as income increases) end up incentivising gaming the system by shifting when income is realised.

Presumably the optimal strategy if you have retirement income within the range where you face a 15% clawback might be to withdraw extra income one year so that you can avoid the clawback the following year, since the higher marginal tax rate would be less than the clawback saved.

Re: Retirement Is Dead

#32

Post by s1artibartfast »

throw0101d wrote: post #30
laurencerowe wrote: post #27

Earlier quoted context omitted.

> once your income is CAD >95k/indiviudal OAS starts getting clawed back (IMHO it should be clawed back much sooner). The downside of means testing pension payments is that it acts as a disincentive to discretionary pension saving. The previous UK system (pre-2009) was an extreme example of this where those without additional pension savings got topped up with pension credit (GIS equivalent) that was clawed back at 1…

Someone making CA$ 90k will get the full OAS. If they have a spouse who makes $90k, they will also get the full amount. So a household with $180k income is getting a bunch of government money. Why does a couple with $180k HHI need to get anything?

Mostly to keep them from burning down the whole system.

It is the same with social security in the USA.

The higher earners are already heavily subsidizing the lower. Take away their returns and they will vote to dismantle the whole thing.

Re: Retirement Is Dead

#33

Post by what »

220hertz wrote: post #2

Man, I though MacLean's was dead. I haven't see one of those in 25 years. But from the article: Forty per cent of us in this age range have less than $5,000 in savings. That's Canadians, aged 55-64. I expect younger generations will be no different. It's an awful lot of people, given the age demographic in the country.

Instead they have a house that they paid 40k for and is worth millions now. Younger generations won’t have that.

Re: Retirement Is Dead

#34

Post by Havoc »

He owns property, could afford raising two kids and can speak of social safety nets.

That seems comparatively grand compared to what humanity has set subsequent generations up for.

Don’t think it’s a coincidence that people are depressed, doom scrolling, taking long bets on prediction markets and approaching life with a general sense of financial nihilism. May as well get that avocado toast if house prices are perpetually out of reach

Re: Retirement Is Dead

#35

Post by what »

throw0101d wrote: post #17

There is a lot of misguided thinking about retirement, as shown by things like "Canadian couples say they need $1.7M to retire. Are you on track?": * https://globalnews.ca/news/11705204/canadian-couples-retirem... This survey is released by a bank that makes money from AUM fees for things like mutual funds. It is in their interest to think you need more, but most folks do not need as much as they believe. The study t…

I only watched part of 1, but the answer was “no, you can’t retire on 250k”.

Re: Retirement Is Dead

#36

Post by andrekandre »

laurencerowe wrote: post #31
throw0101d wrote: post #30

Earlier quoted context omitted.

Someone making CA$ 90k will get the full OAS. If they have a spouse who makes $90k, they will also get the full amount. So a household with $180k income is getting a bunch of government money. Why does a couple with $180k HHI need to get anything?

Broad based benefits tend to receive more public support. Just tax those with high incomes to get it back. Otherwise the bumpy effective marginal tax thresholds (which increase and the decrease again as income increases) end up incentivising gaming the system by shifting when income is realised. Presumably the optimal strategy if you have retirement income within the range where you face a 15% clawback might be to wi…

  > Just tax those with high incomes to get it back.
it also has the direct benefit of drastically reducing the bureaucracy since you don't need all those eligibility checks and associated paperworks (and associated costs)

Re: Retirement Is Dead

#37

Post by ozim »

cagey wrote: post #15
ozim wrote: post #9

Earlier quoted context omitted.

It gets worse when you read financial "social media" people repeating BS like "high yield savings account" there is no such thing as long as I am alive, it is something from maybe 80's or 90's or even earlier. My cousin had the idea of "just put some money in savings account each month and never check it" - that's exactly super outdated advice or a crooked one where someone doesn't know anything about ETFs and heard…

[Speaking as a US citizen] > ... BS like "high yield savings account" there is no such thing as long as I am alive ... HYSA are in 2026 readily available. > ... well "money market accounts" seem better and kind of like of HYSA, but the hell those are not really that easily available. Likewise readily available: open a free brokerage (or "cash management") account at Fidelity.com online (it is easy and acts similar to…

What are the rates of your HYSA?

between 2.5% and 4% that's normal savings account rate and high yield is BS.

Re: Retirement Is Dead

#38

Post by [deleted] »

palemoonsinking wrote: post #12
heathrow83829 wrote: post #6

I find it hard to believe the author could not figure out personal finance. He's certainly smart enough with that economics degree and those epic writing skills. If we're just looking at how to improve the individual: The issue is lack of self discipline. as he said, it's just too easy to spend. The solution: more social security, in effect a forced retirement plan. Instead of 7.5%, make it 10% or even 15%, 20%, what…

I'm not a fan of housing as an investment but ignoring that it is an investment is a social form similar to tax evasion. This author owns there own home and even if they have an infinite length mortgage they are likely to end up with new principal to do a reverse mortgage on and similar investment return to someone buying on margin with no interest. It's basically just moving the elitist pension system from the job t…

[deleted]

Re: Retirement Is Dead

#39

Post by throw0101d »

laurencerowe wrote: post #31
throw0101d wrote: post #30

Earlier quoted context omitted.

Someone making CA$ 90k will get the full OAS. If they have a spouse who makes $90k, they will also get the full amount. So a household with $180k income is getting a bunch of government money. Why does a couple with $180k HHI need to get anything?

Broad based benefits tend to receive more public support. Just tax those with high incomes to get it back. Otherwise the bumpy effective marginal tax thresholds (which increase and the decrease again as income increases) end up incentivising gaming the system by shifting when income is realised. Presumably the optimal strategy if you have retirement income within the range where you face a 15% clawback might be to wi…

> Just tax those with high incomes to get it back.

This appears to not raise as much money as many people think. Interesting conversation with UK tax lawyer Dan Neidle on the topic:

* https://www.youtube.com/watch?v=hgQONOM15HI

* https://en.wikipedia.org/wiki/Dan_Neidle

(Of course there could be reasons besides strictly revenue to do it, but folks should be realistic about the pros and cons.)

Re: Retirement Is Dead

#40

Post by throw0101d »

what wrote: post #35
throw0101d wrote: post #17

There is a lot of misguided thinking about retirement, as shown by things like "Canadian couples say they need $1.7M to retire. Are you on track?": * https://globalnews.ca/news/11705204/canadian-couples-retirem... This survey is released by a bank that makes money from AUM fees for things like mutual funds. It is in their interest to think you need more, but most folks do not need as much as they believe. The study t…

I only watched part of 1, but the answer was “no, you can’t retire on 250k”.

Yes, you can. Or rather some people can. People have to be realistic about what they can save and the lifestyle they need (versus want).

Depending on the commitments you had during your working life, you may need as little as 40% of your working income in retirement to have the same lifestyle (as opposed to the 70% number that is bandied about so much).

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