Retire Poor! Canadian Version. Here’s How
Ever see that headline? Nope
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Generally speaking it’s not a destination many people are seeking. But lots of us arrive there. There’s this couple I know, and a single friend, all in their 60’s. Thinking about retirement and recognizing they did not do all the things they should have. So it’s made me think, and do a bit of research.
The financial advisors that target a different economic bracket (like the ones that expect to retire rich, or at least not poor), have lots of good advice for the wealthier demographic. They say things about how to take risks (or not) in investing, how and why to start saving for retirement when you are young. You can often read the advice they give to people about how to make the most of their investments in home, recreation property, RRSP’s, Tax Free Savings Accounts etc. I have noted there is very little advice for poor or lower income folks who are figuring out what retirement might look like. I guess there’s no money in it. (Pardon the pun).
Around a third of Canadians will retire needing the Guaranteed Income Supplement (GIS) when they start collecting their Old Age Security (OAS). Some of them don’t own a home and will need to pay from their limited income to rent a place to live. The Guaranteed Income Supplement is money the Canadian government gives to very low income retired seniors. To be clear, you don’t qualify for the GIS if you have substantial income because unlike OAS it’s income tested to a much lower level; you don’t get it if you have much taxable income at all.
And here is the thing. This couple and my friend worked hard all their lives. These are people who contributed to the economy by working, who paid taxes. Two of the three worked mostly in the social service sector usually for non-profits or charities which most often meant no pension plans, and usually meant lower wages. Bad choices when you are thinking about retirement. Actually none of these three spent much time doing that. That’s probably why they find themselves in this place.
What is my point? To remind young people to only take jobs with pension plans? By 2014 only a third of jobs in Canada had company pension plans. These jobs are harder and harder to find. We of course should suggest to young people that they need to…
