Retirement planning is a big issue nowadays, particularly with baby boomers. Of course my retirement plan has always been a little different from others and I don't even know how much do I need to retire.
The following is an e-mail I received from a friend of mine and his concern that many Canadians will not have sufficient retirement income when they retire.
----- Original Message -----
From: Todd L
To: Ernie Zelinski
Sent: Monday, August 20, 2012 7:27 PM
Subject: [Retirement] Freedom 55 is an Illusion
Just back from a trip to San Francisco.
I saw this article on Huffington Post. I would love to hear your feelings on this just because is exemplifies the tension that is growing between those who are trying fulfill a sense of purpose of life in retirement years, and the hard reality that at least half of Canadians are really not even close to fulfilling the "entrepreneur's" (or economist's) view of a fruitful retirement.
Canadians to Work in Retirement
You are also aware, I am sure, of the newest statistics that came out citing how many Canadians (53%) had "NO" emergency savings. This is not stating simply "low" savings for retirement, but NO savings.
Retirement Savings of Canadians
I fit into this last category, and I suspect our friend Jim does too in some ways. No retirement, no savings, and no assets (basically, to speak of).
Thus the pain felt by anyone (such as myself), per se, who will see their Old Age Security rolled out to age 67. Therefore, I am not quite sure what the "incentive" is, even within a full-on capitalist dog-eat-dog philosophy, to think that Canada creates a sufficient landing space for those who work their entire life (like me) and pay their Canada Pension and Taxes (like me) for 40 years (like me) and end up basically making less than the poverty line once they "reap" their eventual Canadian Pension Plan. It says, to me, that if a certain person couldn't score a private pension and savings plan, then we (as Canadians) are prepared to let all of those folks who fall into the "middle" ground national pension plan of $18,000 per year (which is fine if you live in an airstream trailer, but not cool if you try to rent a simple apartment). Forget having anything near "home care", at some eventual stage of Alzheimers,but what about basic electricity, garbage pick-up, or water/sewer.
Having said all of that, each situation is different, and guys like Jim and I live on cosmic rules that allow us to "get beyond" the basic needs in life, so ultimately I am not concerned about "us". But what of the other 52%?
This is not a question about finding your way within a system that has opportunity, but reflects views of those who are increasingly facing dwindling pensions/incomes and aren't able to generate "dynamic entrepreneurial energy", but at age 60 or s, just need a bit of a social safety net. Where will they all go in the ext 10 years?
This seems to me to be an important question that you could answer on your blog. Perhaps food for thought?
This was my response to Todd:
I already cover some of these retirement issues in my blog and on several of my websites such as 1001 Ways to Enjoy Your Retirement.
Yes, many Canadians are going to have it tough in retirement. Americans as a whole are going to have it much tougher, however.
Refer to my recent blog post Dying Early as a Retirement Plan:
Here are some retirement quotes as well as retirement sayings to place retirement planning in proper perspective.
"My retirement plan is to find a shopping cart with good snow tires."
— Patty Doy
"My Retirement Plan: Get a job that will last until I am dead."
— Anon, in response to a retirement article
"The Republican Party is a friend of Social Security the way Colonel Sanders was a friend of chickens."
— Charles T. Manatt
"My retirement plan has always been quite a bit different from what retirement experts say is the ideal retirement plan. I semi-retired when I was thirty-five and had a net worth of minus $30,000 (due to student loan debts). Many people will say that this is unreasonable, impossible, and stupid. I did the right thing, however. That is why I have been able to work at my leisure four or five hours a day outside corporate life and make a great living."
— Ernie Z.
"I'll assume that when I retire I can find a good spot under a bridge to park my shopping cart and get some shut-eye."
— darko714 (Alias for person commenting on USA TODAY article about Social Security)
"My wife and I have our retirement figured out ... we will head to the Reno area ... nice climate. On one corner my 70-year-old wife will be a hooker and across the street I will be selling hot dogs until the day I die. I can't think of anything else to do."
— dryheavesdaily, in response to MarketWatch article Four ways 60-year-olds can save their retirement
"My retirement plan is to get great pleasure from living solely to enrage those who are paying for my Social Security and company pension."
— Unknown wise retiree
"As long as I get air conditioning in my cardboard box, I'll be OK [in my retirement]."
— Barbara Whelehan, Bankrate.com Writer
"My Retirement Plan:
1) Work 70hr weeks for average pay.
2) Live beneath my means and save 15-20 percent of my income.
3) Diversify my holdings between cash, RRSPs and PM's
4) Watch cash get destroyed by inflation, and RRSP get destroyed by fraudulent markets and gold get destroyed by deflation when interest rates eventually stop getting manipulated by the government.
5) Retire in a cardboard box living on a diet of catfood and dumpster diving.
— Unknown Canadian in response to Globe and Mail retirement article
In addition to this blog post, I recently read an article about the biggest fear that North American women in their 50s have. It is not about their looks. Their greatest fear is that they will live in poverty in their old age.
Two last quotations about retirement to add to those above:
"A happy retirement doesn't require oodles of money, nor should it mean fighting the cat for food."
— Shelley Fralic, Vancouver Sun
"Uh oh. Half of my neighbors will have to develop a taste for cat food and dandelions. Hey dandelions are great and highly nutricious (just dont eat the ones you've been spraying), as for cat food, I'd prefer to skip that dry stuff and just down the cat."
— Unknown person commenting on USA TODAY article Retirement planning: Assume you won't get Social Security)
One note about the study of Canadians nearing retirement mentioned in the Huntington Post blog. It was best covered (even better than in all the Canadian publications) in this other American publication:
Canadians Short on Retirement Savings
Fact is, I have several friends and acquaintances who are likely to live at the bare minimum of $18,000 a year. On the other hand, I have several friends and acquaintances who will be able to live very well in retirement, much better than me, given that their net worth is anywhere from $1.5 million to $3 million.
In short, there is no answer to the retirement dreams that people have been conned into. There is a serious restructuring going on to account for the excesses that North American baby boomers lived through and must now pay for in terms of a lowered standard of living.
Ernie J. Zelinski
International Best-Selling Author and Prosperity Life Coach
Author of “How to Retire Happy, Wild, and Free”
(Over 165,000 copies sold and published in 9 languages)
and The Joy of Not Working
(Over 250,000 copies sold and published in 17 languages)
The Day I Knew Invest Now Changed Someone’s Life
10 years ago