US Government Shutdown Mega-Thread

[Wilber]

IMHO they ought to raise the contribincreasing the compulsorytion rates, increase the CPP and lower the unfunded portions.

OAS and GIS should really only be for those who haven't worked their whole lives and so haven't contributed to CPP. Deducations should be large enough to supply a reasonable income for CPP contributors by itself, and the current scheme largely is not. Unless you've saved a lot of money you are going to be collecting OAS too.

That's supposedly what RRSP's and TSFA's are for but people have to make use of them. Perhaps increasing the compulsory contributions is the way to go.

[Argus]

That's supposedly what RRSP's and TSFA's are for but people have to make use of them. Perhaps increasing the compulsory contributions is the way to go.

Mine are maxed out, but I have a high income. Most people don't. Not sure what the average is but saw an article which said about 26% of Canadians contributed to an RRSP last year. Not good, but human nature. There are bills to pay, kids to raise, the future is far off...

[Wilber]

Mine are maxed out, but I have a high income. Most people don't. Not sure what the average is but saw an article which said about 26% of Canadians contributed to an RRSP last year. Not good, but human nature. There are bills to pay, kids to raise, the future is far off...

So you are for increased compulsory contributions.

[Argus]

So you are for increased compulsory contributions.

Yes. People will always find other things they need to spend money on, adn what happens when they get elderly and can't work if CPP isn't enough to support them? The state does, with its taxes, through OAS and GIS. Mind you, to a certain degree this is still going to happen. If you never make much over minimum wage you are not going to be able to contribute enough to support yourself in retirement.

[August1991]

What the CBC writer did was basically look at the maximum for social security, which is higher than Canada's maximum, not the average. So if you make a lot of money you will make more from Social Security than you will from Canada's pension plan

The average SC payment is as I stated, about $1200 per month.

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/13/

On average, Canada's is better due to the combination of CPP, OAS and GIS.

I can play that game too Argus. The "average" CPP payment is about $602 per month. Link

As to OAS, it is clawed back and the GIS (GAINS) is means-tested. In effect, relatively few Canadian pensioners receive either.

To compare comparables, I think it's possible to argue that an equivalent retiree in the US receives about twice the social security payment of an equivalent retiree in Canada. Moreover, for older people, US Medicare works better than our provincial health systems.

====

I stand by my claim that the US federal government is generous to retirees. Even Krugman described the US federal government as a big tank with a generous retirement package. And despite b_c's claims above, this big tank with generous package does not pay its way. For every 3 dollars spent, the government must borrow 1. When the economy improves, and tax revenues increase, this borrowing need will decrease. But even with a full-employment economy, the US federal government is simply not sustainable.

To become sustainable, I suspect that the US dollar will lose value and/or Americans will choose to spend less on tanks. Something has to give.

Edited October 28, 2013 by August1991

[Smallc]

As to OAS, it is clawed back and the GIS (GAINS) is means-tested. In effect, relatively few Canadian pensioners receive either.

You don't know what you're talking about. There is a minimum income threshold in Canada that is north of $1300 per month and if you make under the threshold, you get GIS. OAS doesn't start to get clawed back until you're making almost $70K per year. You're wrong.

[August1991]

You don't know what you're talking about. There is a minimum income threshold in Canada that is north of $1300 per month and if you make under the threshold, you get GIS. OAS doesn't start to get clawed back until you're making almost $70K per year. You're wrong.

Smallc, I was perhaps cavalier to use the term "relatively few" but to receive any GAINS, a person has to have an annual income below about $17,000 - $1300/month as you state it. The OAS starts the claw back at about $70,000. (The maximum OAS payment is about $500. The maximum GAINS is about $550. YMMV.) Link

For better or worse, Canada's programmes (CPP/RRQ, OAP, GAINS etc) are more focussed on poor elderly people. In the US, the generosity is across the board. (Hint: Unless you can ensure having a retirement income above $80,000 or so in Canada, you might as well spend it while you're young.... )

-------

But I did not really want to enter a Team A/Team B style debate here on the relative merits of Canada/the US for retirees. My main point is that the US federal government is generous to retirees, and this generosity, coupled with its spending on the military, make the US federal government unsustainable.

A lower US dollar and/or cuts in US military spending are likely. Another possibility is a federal sales tax (VAT/GST) but that would be political suicide.

Edited October 28, 2013 by August1991

[Argus]

But I did not really want to enter a Team A/Team B style debate here on the relative merits of Canada/the US for retirees. My main point is that the US federal government is generous to retirees, and this generosity, coupled with its spending on the military, make the US federal government unsustainable.

There is no evidence they are 'generous' to a greater degree than Canada. Their own figures show an average monthly payment of $1200 which is less than the combined Canadian pension plan delivers. You have also failed to show any evidence that the US medicair system is more generous than state funded programs elsewhere. So now you're bringing in the military. Okay, the US spends a lot on their military, but the conservatives in the US have made no moves to cut military spending. Quite the contrary. Most of them want to increase it. Meanwhile, taxes on the wealthy are lower than they've been in generations. The refrain oft heard is "oh, you won't really get a lot more by increasing taxes on the wealthy'. Hello? The top 1% own half of all stocks, bonds and mutual funds. In other words, half of all the wealth is owned by that single small group who are paying very miniscule taxex in comparison to their income due to a couple of decades changes in the tax codes which gave favourable treatment to the incomes which bring them the most money - dividends and capital gains.

[Smallc]

Maximum OAS is closer to $600 than $500. You're wrong August. It's that simple. Every Canadian senior is guaranteed more than the US average for overall income.

[Guest American Woman]

Maximum OAS is closer to $600 than $500. You're wrong August. It's that simple. Every Canadian senior is guaranteed more than the US average for overall income.

Say what?? What do you think the US average for overall income is?

[waldo]

Say what?? What do you think the US average for overall income is?

The average monthly Social Security benefit for a retired worker was about $1,230 at the beginning of 2012.

[Smallc]

Say what?? What do you think the US average for overall income is?

And the minimum in Canada is over $1300 from all sources combined.

Edited October 29, 2013 by Smallc

[Guest American Woman]

And the minimum in Canada is over $1300 from a sources combined.

That doesn't answer my question, so I'll ask again. What do you think the minimum is from all sources combined in the United States?

You can't compare an "average payment" that is being made in the U.S. with what the potential payment in Canada could be - which is what you appear to be doing. The figures you quote appear to be for Canadians retiring at 65. Lots of people collecting SS took early retirement, so of course that's going to lower the "average" that's being paid out in the U.S. There are also supplemental programs for those who fall into the low income bracket. SS benefits aren't the only benefits some retirees receive.

Edited October 28, 2013 by American Woman

[waldo]

That doesn't answer my question, so I'll ask again.

why the perpetual tease? Put your number up... is there a problem?

[bush_cheney2004]

...... Lots of people collecting SS took early retirement, so of course that's going to lower the "average" that's being paid out in the U.S. ....

Yes....the majority of U.S. "retirees" take early Social Security benefits, which reduces them by about 7% per year of early retirement. Also, the cost of living is higher in Canada for many basic things, meaning that the American retiree can make a dollar go further. Social Security also pays disability and survivors benefits.

CPP also has early payment options as soon as age 60. Averaging such things is not very helpful in this discussion.

Edited October 29, 2013 by bush_cheney2004