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As Rick Anderson said on CBC...some other government (the Tories...NDP wouldn't hit social programs or the libs) down the road will raise it back up. What should peeve off Canadians is they keep saying we can't afford but I bet if one could get the info on MP's pensions over their life time, more $$ are going out there in than in OAS or GIS.

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Every Liberal moves negates an initiative that Harper enforced. What Harper "legacy" will remain?

When the Liberals finally increase the HST to levels before Harper cut it, and the budget begins to balance, the Harper financial "reforms" will be relegated to obscurity.

What had Harper done that Trudeau will not reverse?

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A great post CC. I wrote a long reply but it got lost when I posted it. I don't feel like retyping it. But that was an awesome post. I will summarize that my mom was able to collect at 65 after raising 8 children and working full-time in her later years. She was ready to retire and deserved to qualify for the OAS which she enjoyed for her last 15 years in retirement. And she contributed to adding productive folks to our society and future grandchildren.

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Hey, a few billion here, five or six billion there, nine billion over there. Next thing you know you're talking about real money. But not to fear. There's always bankruptcy and having the IMF administer our finances.

When fully implemented in 2030, the change was expected to save the government $7.1 billion a year (in 2014 dollars), shows a study from researchers at the University of Laval that was published in the Canadian Tax Journal.

http://www.benefitscanada.com/pensions/governance-law/the-impact-of-returning-oas-to-age-65-78462

Edited by Argus
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Hey, a few billion here, five or six billion there, nine billion over there. Next thing you know you're talking about real money. But not to fear. There's always bankruptcy and having the IMF administer our finances.

When fully implemented in 2030, the change was expected to save the government $7.1 billion a year (in 2014 dollars), shows a study from researchers at the University of Laval that was published in the Canadian Tax Journal.

http://www.benefitscanada.com/pensions/governance-law/the-impact-of-returning-oas-to-age-65-78462

Can you state your point here? Think of me as the LCD. I don't have a problem with that. Edited by WestCoastRunner
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Definitely a step backwards. The age requirement for government funding for seniors needs to go up as life expectancy goes up. People are routinely living into their 90s and even 100s now. Funding people to live off government money for a full 1/3 of their lives, or almost as long as their working careers, doesn't seem like it could be sustainable.

The idea of passing a "hump" of boomers in the 2030s after which all this will get better is nonsense. Many boomers will be living well into their 90s (that is, out into the 2050s) and retirees following them will be living well into their 100s.

Barring some unprecedented planetary disaster, the proportion of people in our society over the age of 65 will only ever increase throughout the 21st century.

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Definitely a step backwards. The age requirement for government funding for seniors needs to go up as life expectancy goes up. People are routinely living into their 90s and even 100s now. Funding people to live off government money for a full 1/3 of their lives, or almost as long as their working careers, doesn't seem like it could be sustainable.

The idea of passing a "hump" of boomers in the 2030s after which all this will get better is nonsense. Many boomers will be living well into their 90s (that is, out into the 2050s) and retirees following them will be living well into their 100s.

Barring some unprecedented planetary disaster, the proportion of people in our society over the age of 65 will only ever increase throughout the 21st century.

Do you have stats to indicate the longevity in Canada?

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Do you have stats to indicate the longevity in Canada?

Yes, life expectancy at 65 in Canada is ~20 years, meaning the average person that's survived to 65 to start receiving their benefits will live another 20 years. And a great many (in fact, about half) will live longer than the average.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/health72a-eng.htm

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Yes, life expectancy at 65 in Canada is ~20 years, meaning the average person that's survived to 65 to start receiving their benefits will live another 20 years. And a great many (in fact, about half) will live longer than the average.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/health72a-eng.htm

So really, the majority are living to 85 with some living longer. And you have a problem with seniors collecting about 500 a month?

And mostly they aren't living into their 90s and 100's.

Edited by WestCoastRunner
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So really, the majority are living to 85 with some living longer. And you have a problem with seniors collecting about 500 a month?

No. I have no problem with seniors who need it collecting 500 per month. What I do have a problem with is people not wanting to accept the reality that to keep the costs of programs in check, the age requirements should rise with life expectancy. They should be indexed to each other.

If you want the age requirement to be 65 now at the current life expectancy, fine. But index them to each other. If life expectancy rises another 10% in the next 10 years from 85 to 93.5, then the age requirement should also rise 10% from 65 to 71.5. That will ensure that an equal proportion of the population receives these benefits in the future as now, preventing the budgets of programs like OAS from ballooning as a fraction of GDP. If life expectancy doesn't rise, then the retirement age won't change either.

People are living longer and healthier lives than ever before and the price of that is that they might have to work a few extra years before retiring.

Edited by Bonam
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No. I have no problem with seniors who need it collecting 500 per month. What I do have a problem with is people not wanting to accept the reality that to keep the costs of programs in check, the age requirements should rise with life expectancy. They should be indexed to each other.

If you want the age requirement to be 65 now at the current life expectancy, fine. But index them to each other. If life expectancy rises another 10% in the next 10 years from 85 to 93.5, then the age requirement should also rise 10% from 65 to 71.5. That will ensure that an equal proportion of the population receives these benefits in the future as now, preventing the budgets of programs like OAS from ballooning as a fraction of GDP.

The problem is companies still encourage retirement at 65 and when those people do retire at 65 it's because they can no longer work physically and mentally.

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People are routinely living into their 90s and even 100s now.

When you say this, you're implying that this is the norm. It is by far the exception. Statistic Canada projections have men and women living to 100 in birth cohorts around the year 2100. It's utterly inapplicable to anyone alive today. Living to 100 will be the exception for many more generations. http://www.theglobeandmail.com/report-on-business/economy/canadian-life-expectancy-gains-expected-to-slow/article18031842/
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I should add, what's more important here is the drop off in people's functioning and not necessarily mortality itself. You're working backwards from death, when we're prolonging the amount of time people live with varying degrees of age-related disabilities. Death is utterly irrelevant if people are still losing functioning around the age of 65 and that appears to be the case. Decisions about OAS need to account for functional health and not simply mortality. See: http://www.statcan.gc.ca/pub/82-624-x/2014001/article/14009/c-g/c-g-05-eng.gif

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Barring some unprecedented planetary disaster, the proportion of people in our society over the age of 65 will only ever increase throughout the 21st century.

Well, you pin it on whoever you like I guess but the unprecedented planetary disaster is/will be the increase in people generally.

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A number of issues I have with this issue in no particular order:

1) I think there is too much "anchoring" going on. This is where people rely on too much information for the first piece of information which prevents them from clearly considering other information.

An example of this is to look back when Bismarck brought in pensions in Germany in the 1880's (I think) and then use the age at that time, 65, and the life expectancy then as the basis to determine the affordability of the program now.

The modern version of this is to simply just assume that since life expectancy is increasing that we must increase the age of eligibility despite the changes in our tax system, the increase in our productive and wealth since OAS was first brought in etc etc.

That is, actuaries would be better at working this out if only we would getting them to work out some options so we can make somewhat informed solutions rather than assuming we will not be able to afford something because ohhh, that number seems awfully big.

2) Strange that we can somehow afford pension splitting which costs about $1.2 billion per year and TFSA's which will cost more and more each year and used to be able to afford the family splitting which cost something like $3 billion per year but no, people must wait to 67.

3) Pension splitting is a particular sore spot for me since it has significantly reduced OAS clawback. For example, a guy getting a pension for $110,000 per year plus sharing his CPP with his spouse who also gets OAS does not face any claw back since pension splitting was introduced. This couple has saved $10,000 ish per year in income tax and claw back ever since. Yes, these are real people as I do their tax returns.

4) The reality is we do not know the options very well because we have governments that are always thinking in terms of next year. We saw Harper bring in terrible budget measures that have made our tax system into a petty joke. The Liberals will do similar stupid things with their budgets and tax measures, I'm sure.

If it wasn't for this maybe we could have a commission that would address this issue to come up with more options than simply the binary 65 vs 67.

5) I think 65 would/will work with the end of the family split and with some modified pension splitting that brings back OAS clawback while still allowing couples to save income tax.

Throw in an increase to capital gains (from 50% to 75% or even 100% income inclusion) and I think we would be mostly there for keeping the age at 65.

Pure speculation on my part yes.

But at least I am honest enough to admit it while everyone else pretends they know more and better when they don't and they ain't.

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When you say this, you're implying that this is the norm. It is by far the exception. Statistic Canada projections have men and women living to 100 in birth cohorts around the year 2100. It's utterly inapplicable to anyone alive today. Living to 100 will be the exception for many more generations. http://www.theglobeandmail.com/report-on-business/economy/canadian-life-expectancy-gains-expected-to-slow/article18031842/

Well, what I said was that living into one's 90s was now fairly routine. And it is. Not the majority of people live into their 90s yet, but it is very common, about 1/3 of people who reach 65 will reach 90.

Also, regarding the prevalence of disability increasing with age, that's true. Looking at the graph in your 2nd link, it looks like the average age for "severe disabilities" is ~77, while people spend most of their lives after 40 with "moderate disabilities". In any case, people who have a disability that prevents them from working have access to disability payments (which I support) even if they have not reached retirement age.

As for statscan projections about the year 2100... I wouldn't put much stock in those. It's essentially impossible to predict the ramifications of advancing technology. Many futurists believe that the chances are that before 2100 there will be no fundamental limit to human longevity. I plan to live forever and so should anyone else that's healthy and under 40 today.

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So the thing is OAS or a disability payment? Let people retire. Or better yet, let's seriously discuss mincome.

Well, a disability payment would go to just those who are disabled and can't work anymore. While OAS goes to everyone. Significant difference there.

As for minimum guaranteed income, check out this thread, pages 5 and later: http://www.mapleleafweb.com/forums/topic/25436-what-policies-should-the-conservatives-party-start-putting-forward/

Looking at the numbers, it seemed fairly clear that Canada simply could not afford it, even though I initially liked the idea. Surprisingly, it did look like the US could afford such a program though.

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A number of issues I have with this issue in no particular order:

1) I think there is too much "anchoring" going on. This is where people rely on too much information for the first piece of information which prevents them from clearly considering other information.

An example of this is to look back when Bismarck brought in pensions in Germany in the 1880's (I think) and then use the age at that time, 65, and the life expectancy then as the basis to determine the affordability of the program now.

The modern version of this is to simply just assume that since life expectancy is increasing that we must increase the age of eligibility despite the changes in our tax system, the increase in our productive and wealth since OAS was first brought in etc etc.

That is, actuaries would be better at working this out if only we would getting them to work out some options so we can make somewhat informed solutions rather than assuming we will not be able to afford something because ohhh, that number seems awfully big.

2) Strange that we can somehow afford pension splitting which costs about $1.2 billion per year and TFSA's which will cost more and more each year and used to be able to afford the family splitting which cost something like $3 billion per year but no, people must wait to 67.

We can afford about $850 billion/year worth of programs. That's the total, across all levels of government in Canada. From there, it's a matter of priorities. There is always more stuff that needs money than money to do it with. Paying people to retire earlier than they need to should not be a high priority, in my opinion. This is why I favor the idea of raising the retirement age (while maintaining a robust system of disability systems for those who do become unable to work before reaching the higher age).

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No. I have no problem with seniors who need it collecting 500 per month. What I do have a problem with is people not wanting to accept the reality that to keep the costs of programs in check, the age requirements should rise with life expectancy. They should be indexed to each other.

Historically, it looks like the costs of the program are secondary to the entitlement politics involved. OAS started as a citizenship then means tested "poor" benefit at age 70, not 65, and has been jiggered over the years for political advantage, not fiscal reasons or soundness. So Trudeau's move just continues this legacy:

Not until 1965 did Ottawa start to eliminate the remnants of poor-law attitudes from the pension system. That year, the Pearson Liberals established not only a compulsory, contributory CPP program but also a universal system of OAS, along with a self-administered, income-tested Guaranteed Income Supplement (GIS) in 1966. Benefits were indexed to the cost of living at a maximum of two percent a year. Two years later, the government lowered the age of eligibility for OAS from age 70 to 65.

Such changes were part of the growth of Canada’s welfare state under the Liberals, a phenomenon partly explained by a booming economy and the Liberals’ minority government status during much of the 1960s, when they came to rely on support in Parliament from the NDP, a situation somewhat reminiscent of the Old Age Pensions Act of 1927.

http://activehistory.ca/2012/11/a-short-historical-primer-on-canadas-old-age-security-debate/

Edited by bush_cheney2004
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Instead of a welfare state we should have nationalized a few resources and dedicated the profits to a national retirement fund. Maybe then we could have referred to ourselves as a dividend state. We probably would have had to hire Norwegians to run things though. We're just plain no good at it.

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What does retirement have to do with anything if you can start collecting your Canada Pension at age 60 and keep working and contributing to CPP and even collect EI until the day you drop? The age 67 or 65 only seems to matter with the OAS.

Yes, OAS and GIS is related to age 65/67.

However, one can choose to take OAS as late as age 70 and get a bonus for doing so (the bonus kick is in for every month you wait after attaining 65).

The reason to do this is because you enjoy what you do and you get paid so much that to take OAS at 65 would be pointless since it would all be clawed back.

I have personally dealt with one person who has done this. The guy still works at age 71 and has his OAS clawed back but that's his choice.

CPP is different since it is based on paying into it with the various provisions for child rearing to boost the pension for the breeding crowd.

Lots of options here: take it early with a penalty at 0.6% per month prior to age 65.

If you keep working you still pay into CPP but can opt out by filling out form CPT30 at any time after age 65. It is possible to pay into CPP up until age 70.

You can wait to take CPP as late as age 70 and get a bonus for doing so. Few people do this but it would/could/does make sense for certain individuals who have a family history of longevity to mitigate the risk somewhat and/or need to work as long as they are healthy prior to retirement because they lack savings.

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