If you haven’t been reading the Globe and Mail for the last few days I would suggest you head over and read their Retirement Lost series. If nothing else the series seems to includes some eye popping pieces of data like this little data set:
- 17.6 million: Number of people in the Canadian work force.
- 11 million: Number of Canadian workers without pension plans.
- 4 million: Number of those workers with registered retirement savings plans.
So by doing a little simple math we can get the number of those people without a pension plan (other than CPP obviously) and no RRSP (11 million – 4 million = 7 million). Express that as part of the work force in % and we get 39.7% of working Canadian’s don’t have an RRSP or a pension plan, which seems like a huge number.
Yet keep in mind that would include those who are towards the start of their career or even summer jobs as students. Neither of which you would expect to have an RRSP or pension. So let’s be generous and assume that we don’t expect 20% of the workforce to have a pension or RRSP, that still leaves a staggering 20% of people with no obvious retirement savings.
Now consider for a moment that means two of even five people you would meet with a job would have nothing saved for retirement. Then add in the fact that with the boomers retiring over the next decade and we that remain working will have to fund their health care costs and OAS benefits. Also keep in mind that most defined benefit plans are government run, which means most of them are funded with our tax dollars. It’s getting fairly obvious that there will be some enormous pressure on the government to do something to deal with this and it will likely involve the younger generations footing the bill.
I like to think I’m fairly optimistic about the future most days, but in this case the picture isn’t looking good. I wondering how long will it be before the government joins the rest of the employers in Canada and stops offering a defined benefit plan to it’s workers or at the very least offers much less of a benefit? Or how long until someone does the math and realize OAS will have to be cut back in the future?
Regardless don’t ignore this ‘pension crisis’ that is going on or you might find yourself giving up your own retirement dreams to pay for your parent’s retirement.