Posted by Canadian Dream on October 19, 2009
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.
Posted by Canadian Dream on October 16, 2009
Whenever we buy just about anything we have typically justified the purchase in our minds by some means or another. We buy food because we like the taste of a particular product or it was the lowest price. Marketers have long know about this fact and have often tried to be helpful in allowing us to justify buying their particular product by saying their product is helpful, cool, allow you to save time or what ever angle they can come up with. What’s been different on this front lately is the fact that everyone seems to be ‘green washing’ their products to highlight their environmentally friendly qualities.
A classic example can be found in my latest technology obsession, an ebook reader. I found this post over at the New York Times that points out a study that shows an ebook reader will likely emit less greenhouse gases than the a certain number of real books. So people are feeding my obsession and saying I could buy their product and save the world all at the same time. How convenient?
Yet at the end of the New York Times post they point out the obvious: if you use the library you would likely already cutting down on your carbon footprint from reading books. So hence buying an ebook reader is questionable again, at least for how ‘green’ it is.
Which is really the point of this post: buying something because it is ‘green’ is often misguided justification supplied by marketing people. It’s not always, but often it is. So don’t worry about how ‘green’ everything in your house is or not.
Just use your common sense after reading the product label mostly truly green products like to use numbers or specific information to prove how green the product is while ‘green washed’ products tend to use empty phrases like ‘less chemicals’ or ‘less energy’ with no information to support the claim. Use your head and you likely will be fine and then you can justify your purchase on those old methods of price and quality.
Posted by Canadian Dream on October 15, 2009
Well if you don’t have a TFSA (Tax Free Savings Account) don’t worry because apparently you are not alone. Over at the Wealthy Boomer there is this post which reports that only 34% of people have set up a TFSA so far in 2009. Another 11% plan to do so by the end of the year, while 49% are going to do it in 2010.
So why are the numbers so low right now? I would suspect that most people are actually focused on debt reduction right now rather than actual saving money into an account. Realistically this makes sense since the payback on debt greatly exceeds most fix income type savings products (ie: high interest savings account, GIC…) even if you use a TFSA. The Great Recession woke up a lot of people to the fact the party is over and maybe it is time to get rid of their debt hangover.
What I found really interesting about the post was the fact if you add up the percentages you get 94% of people either have an TFSA or plan to get one by then end of 2010. Of course their is the fact that intentions don’t always translate into action, but that is a stagging amount of people that obviously have some interst in getting one. This would mean that TFSA’s in theory should out pace RRSP as a savings account type of choice post 2010. In 2007 88% of people could have contributed to an RRSP of those only 31% actually did so (see here).
So who knows perhaps TFSA’s might actually get most of us saving again. In any case it’s a good thing.
