Almost Canadian

I believe that I am paying for my government pension in Canada. Am I wrong?

I plan to have a great retirement because I live within my means and I am putting lots into various retirement plans. I see a vast cross section of the finances of Calgary's population. I never cease to be horrified by how many have so little put away for their retirement. It seems that many prefer to spend all they have now, and then some, to keep up with the Joneses. No doubt, when their retirement comes around, they will be bitching about how the "government" should assist them. They won't look in the mirror when they are asked why they are in the position they are in.

Engineer_abroad

No that's not how it works, Soicial insurance, security or what ever you want to call it is and always has been an inter-generational transfer of wealth. Your payments don't go into an indiviudla acocunt with your name on it it goes into a global account used to pay current pensions. Think about it, the rate at which pensions is paid is based on age of retirement and how many years you paid not how much you paid in. This may sound harsh, but this system worked when their was a larger death rate (money from those that died early paid the higher amounts for those that didn't) but with people living longer that extra money can only come from increased burdens on the current tax payer. The money for your retirement will come from the next generations RSP contributions and so on and so on.

'bitching about how the government should assist them' - You mean exactly like the current generation of retirees does when they complain of wanting the tripple lock to be reestablished or above inflation increases in pensions or the right to keep their homes when they need long term care? I admit I am talking more form a UK perspective here but I would be surprised if the Canadian system was fundamentally different.

Almost Canadian

I defer to your greater expertise but it was my understanding that, in Canada, one contributes to one's own fund, albeit one that it is held centrally. I accept that the UK one has always been paid by those that are currently working.

I believe that people should be responsible for their own situation. Therefore, if one doesn't provide for one's own retirement, they have no one to blame but themselves. Obviously, there should a safety net for those that are unable to do so but having the latest vehicle in one's drive, rather than saving for one's retirement is, IMHO, not a valid reason to expect one's neighbours to have to fund one's retirement.

Engineer_abroad

Absolutely agree, but for that to work there has to be a fair and level playing field to begin with. i.e. asking an asset poorer current generation to pay more to support the current field of asset richer retirees or close to, thereby preventing that younger generation from contributing to their own pensions is not a sustainable way of ensuring people can save for the retirement.

The locking out of many from the housing market removes a huge segment of what people often use as retirement funds. This is then combined with the fall in interest rates which hurts those without property based retirement assets the most.

The real issue here is that more housing stock is required to level the supply/demand curve and cool the market. As I have said this isn't necessary about a market burst in which house process drop but a stagnating of house prices whilst wages catch back up.

If things don't change in Vancouver soon the city will become a Disney land with only the top 5% or so being able to live there. this will make it almost impossible for the city to offer basic services. As I see it BC government has 2 choices 1) cool the market or 2) diversify the jobs market across the region.

Shard

Some good points.

Interesting read about the equality gap: Generation rent: can your landlord be your friend? | Cities | The Guardian

Shard

That's the crux of the article, that in parts of Britain (London, etc) that it's only those young people from a more affluent background that are going to be able to get on the property ladder, and that the high rents are only going to exacerbate any wealth disparities.

scrubbedexpat091

Pretty much the same in Vancouver and some suburbs I would imagine.

scrubbedexpat091

One example of why it's hard for people to relocate from Vancouver and Toronto, jobs.




Toronto, Vancouver are creating all Canada's job growth - Business - CBC News

Engineer_abroad

Nice article, (especially for the Guardian ). I agree that the common theme is that the younger generation who have bought have done mostly on the back of money given to them by the older generation. i.e. wealth is being accumulated by those with existing wealth (so much for trickle down economics). What is also indicates is that many of those who were given money for the deposits cant actually afford the mortgage without renting out to people (because they had deposits). On the other hand their renters are more than capable of paying the mortgage but because they are locked into paying for someone else's asset they cant amass the huge sums required for their own deposits.

It isn't just the UK or Canada seeing this. the following paper shows that the Gen X and Y have less net financial worth than previous generations (when they were the same age).
http://inequality.stanford.edu/_medi...enerations.pdf
In particular look at the 29-37 age rage (study was in 2013). This group of Gen Y/X (born mid 70's to mid 80's and often call the MTV generation) are the most impacted, no surprises given they were the generation told they had to go to university and graduated with massive debt right into the global financial meltdown and who's wages stagnated for years.

Former Lancastrian

Things can't be that bad in Vancouver as even a student can afford to buy a house.
Vancouver mansion sold by Canaccord founder for record $31.1 million now owned by ‘student,’ records show | Financial Post

The majority owner of a Point Grey mansion that was sold earlier this year by Canaccord founder Peter Brown for a record $31.1 million is a “student,” property records show.
Mortgage documents attached to the land title papers show that a mortgage of $9.9 million was taken out by Zhou and Feng from the Canadian Imperial Bank of Commerce on April 28. The bi-weekly payments are listed as $17,079.41.

Stinkypup

Slightly more upmarket than our student terraced houses was in Edge Hill, Liverpool then.

BEVS

Hi All.

You will maybe notice that I have moved several posts from this thread about Vancouver housing costs into a thread of their own.

This is because they became more of a conversation about one person's plight , rather than general chat about the topic. So to keep this thread clear. I have moved them

Thanks

Thankyou.

Shard

Thank goodness 100% mortgages are creeping back in - that should help some younger people get on the ladder.

Engineer_abroad

Especially where they can prove they have been making rent payments for a significant period which are far in excessive the mortgage payment.

JanJoplin

Aviator, I heard about you. Glad to come across you at last, apparently you are one half of a famous duo.