Northern Light
Superstar
So, we all know people are living longer than they used to, irrespective of the Baby Boom demographic problem.
We also know that Baby Boomers are set to retire beginning in the near future, over the next decade or so.
Given that reality, the State as we know it, faces an enormous squeeze.
People often think only of pensions, which is important, but not really the big issue in Canada.
Here, CPP is stable and fully funded though about 2050 or so, due to the increase in premiums about a decade ago, but there are many other cost and revenue issues of great concern.
People often forget that CPP is only 1/2 the retirement equation for a majority of Canadians, OAS is the other key part.
Old Age Security, unlike CPP, is not funded from a segregated fund/payroll tax, and there is no significant reserve for it.
OAS actually pays out just as much as CPP, and constitutes an meaningful portion of Federal spending.
That being the case, as more worker retire, income tax and likely sales tax will decline in revenue; while gov't expenses in OAS will rise significantly.
In addition to those types of costs, there is the ever rising healthcare bill. I would not for one moment suggest or support cutting services to anyone, nor slashing fairly meager retirement incomes programs.
But in the absence of such cuts, how do we as a country deal with problem of a society still on a crash course with fewer than 2 working adults to every retiree (or person over 65)?
*******
Options:
- Drastic cuts are one obvious choice, though, one I reject. We could cut retirement benefit levels, but doing so if that means providing inadequate income to survive seems quite unfair, and frankly useless. Cutting healthcare is just as problematic.
- We can, of course, cut less desirable government services to make some 'fiscal room'.
- We can try to ...incentivize people to have more children, though this is a partial and long-term solution at best, that will not resolve short or medium term problems.
- We can, of course, raise the retirement age.
***
This last one I greatly favour.
Current retirement age:
65 (Canada)
67 (U.S.)
67 (Germany)
65* (U.K., but rising to 66 in 2020)
A modest increase of 2 years to 67 would provide enormous fiscal relief.
Arguably enough to modestly raise payouts, while still saving a bundle.
Though some contend this would be unfair to those who have more physically taxing jobs.
I don't wonder though, whether 'disability' or 'worker's comp' or simply finding such workers less physical labour as they age may be the better course of action.
For heathcare, the challenges are even more acute and demand some 'resourceful' rethinking of how services are delivered and how to reduce need for them in the first place.
********
Suggestions? Thoughts? Discuss!
We also know that Baby Boomers are set to retire beginning in the near future, over the next decade or so.
Given that reality, the State as we know it, faces an enormous squeeze.
People often think only of pensions, which is important, but not really the big issue in Canada.
Here, CPP is stable and fully funded though about 2050 or so, due to the increase in premiums about a decade ago, but there are many other cost and revenue issues of great concern.
People often forget that CPP is only 1/2 the retirement equation for a majority of Canadians, OAS is the other key part.
Old Age Security, unlike CPP, is not funded from a segregated fund/payroll tax, and there is no significant reserve for it.
OAS actually pays out just as much as CPP, and constitutes an meaningful portion of Federal spending.
That being the case, as more worker retire, income tax and likely sales tax will decline in revenue; while gov't expenses in OAS will rise significantly.
In addition to those types of costs, there is the ever rising healthcare bill. I would not for one moment suggest or support cutting services to anyone, nor slashing fairly meager retirement incomes programs.
But in the absence of such cuts, how do we as a country deal with problem of a society still on a crash course with fewer than 2 working adults to every retiree (or person over 65)?
*******
Options:
- Drastic cuts are one obvious choice, though, one I reject. We could cut retirement benefit levels, but doing so if that means providing inadequate income to survive seems quite unfair, and frankly useless. Cutting healthcare is just as problematic.
- We can, of course, cut less desirable government services to make some 'fiscal room'.
- We can try to ...incentivize people to have more children, though this is a partial and long-term solution at best, that will not resolve short or medium term problems.
- We can, of course, raise the retirement age.
***
This last one I greatly favour.
Current retirement age:
65 (Canada)
67 (U.S.)
67 (Germany)
65* (U.K., but rising to 66 in 2020)
A modest increase of 2 years to 67 would provide enormous fiscal relief.
Arguably enough to modestly raise payouts, while still saving a bundle.
Though some contend this would be unfair to those who have more physically taxing jobs.
I don't wonder though, whether 'disability' or 'worker's comp' or simply finding such workers less physical labour as they age may be the better course of action.
For heathcare, the challenges are even more acute and demand some 'resourceful' rethinking of how services are delivered and how to reduce need for them in the first place.
********
Suggestions? Thoughts? Discuss!
