Last updated: February 15, 2012 10:25 am
Old age insecurity
Canada’s 20-somethings vs. the looming retirement crisis
MONTREAL (CUP) — In 1959, Canada welcomed 461,703 little bundles of joy into the world. This was our country’s biggest baby boom and, given declining birth rates, will probably hold its place in the record books until the end of time. In 2024, those babies will turn 65 — the age at which the government has traditionally said that people have worked long enough and should enter into retirement.
And we are screwed.
Recently, Prime Minister Stephen Harper infuriated old-timers and soon-to-be-old-timers across the nation when he suggested there’s a need to reform Old Age Security, which is a government program that provides seniors with a monthly cheque of $540 or less, depending on income.
Unlike the CPP, where the payout is based on how much you’ve contributed over a lifetime, you only have to have lived in Canada for 10 years to collect OAS.
Many are speculating that Harper may raise the eligibility age of OAS from 65 to 67. But why should the youth of Canada care? According to Jim Flaherty, changes to OAS won’t be implemented until 2020; if it takes much longer than that, we could be in trouble.
For the most part, we cannot picture a time when the endless beer pong tournaments and blatant disregard for sunscreen will actually be visible on our faces. We can’t imagine a time when motorized scooters will become our reality … but neither did the acid-dropping baby boomers of 1959, and they’re a paltry 12 years from retirement.
It will happen. We will get old and sleepy and we won’t want to work anymore. But if pressure groups can stop OAS reform from happening, our generation will lose the ability to complain about technology and "those damn kids" from the comfort of our living rooms. We’ll still be working to support the last generation of retirees.
So while organizations like the Canadian Association of Retired Persons have got a pretty aggressive bee in their bonnets about the two-year increase, they are selfishly throwing the very people they struggled to support under the bus.
I don’t have a vendetta against the elderly; they have raised and nurtured us and worked hard to do so. It is the elected government up to this point that has gotten us into a debacle.
Here’s what is going to happen in 12 years: mass retirement, huge gaps in the workforce, a crazy reduction in taxable income (less money, more problems), and a lot more people to support.
At this rate, we’re going to see a drastic reduction in benefits for our generation — if we get anything at all — and we may not be getting any of the OAS that we’re paying into right now.
But we also aren’t entering the workforce as early as the baby boomers did. Our generation takes its sweet-ass time dawdling, married to ideas like “doing something we love” and “being happy,” which is not necessarily a bad thing — but means that we often don’t start really working until our mid-20s. This leads to less money in the current system and less contributed to our pensions.
Now, the program is costing taxpayers $36 billion and will skyrocket to $108 billion in 2030. Canada’s entire federal budget this year is $235.6 billion, and there are no planned tax increases. We’re heading towards trouble that cannot be staved off unless the OAS is reformed.
It’s not like our government is actually saving the money that we are contributing to things like OAS and the Canadian Pension Plan in a special savings account that it is forbidden to withdraw from. The government is spending it. It is overspending it — to the tune of $29.6 billion, also known as the 2011 Canadian deficit.
Harper is spending money like a west-coast rapper on things like jets and jails set to be filled with the victims of legislative warfare.
So what does two years really mean?
Two years will allow more people to replace the giant group of individuals that will stampede out of office buildings everywhere in a dozen years. Two more years of solid contributions to retirement programs could make a huge difference.
In a Jan. 31 article in The Globe and Mail, Brian Lee Crowley said that pushing the retirement age to 70 would be a more realistic policy for a population that has increasingly high life expectancy. It would also alleviate the burden for us youngsters.
We are the ones who are going to have to pay for these policy decisions out of the pockets of our skinny jeans.
And it seems counter-intuitive that, just when we’re figuring out how to get a job, we also need to be considering how — and when — we’ll be getting out of having a job.