The age of retirement, proposed changes don't make dollars and sense
By NextHome Staff
July 11, 2019
July 11, 2019
A new report, by the Canadian Institute of Actuaries (CIA), is calling on the government to raise the retirement age to 67. Compared to 50 years ago, the report says that there are fewer working Canadians contributing to the Canada Pension Plan (CPP), compared to the number of retirees. In the 1960s there were seven Canadians working for every retiree. Now, that number is less than three. While it might sound like it makes economic sense, it could leave some in a financially vulnerable situation – especially those who have been unable to save enough for retirement.
Retirement updates
The report is calling on the government to have a discussion about when Canadians can start receiving Old Age Security (OAS) and CPP benefits. The previous government raised the age of retirement to 67, but the current government brought it back to 65. Populaity aside, Canadians are living longer, healthier lives. The president of the CIA, John Dark, says, "It makes sense to update our country's retirement income programs to reflect this fact."New proposals
The CIA report suggests that senior benefits start two years later than they now do. You can take early retirement with reduced benefits at the age of 60, or delay getting retirement benefits until the age of 70, and receive more. With their recommendations, the age for early retirement would be at 62, standard retirement at 67 and late retirement at 75. This would give Canadians the opportunity to accrue more savings and, ultimately, receive higher benefits. Plus, Canadians would be allowed to keep money in their RRSP until the age of 75. Currently, Canadians are forced to convert their RRSP into a Registered Retirement Investment Fund (RRIF) at the age of 71, and then draw from it on an annual basis.We can no longer rely on workplace pensions, which made up the lion's share of retirement income some 50 years ago