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Originally Posted by OMG!WTF!
Interesting point. Theoretically any large fund, pension fund, reserve fund, investment fund etc, should be hedged for inflation....a $100 contribution in 1965 should have accumulated enough returned income to satisfy its 2015 value. As well, it's all relative as your current 2015 contribution will be laughably low whenever you retire.
What I was trying to say is that the OAS portion of your contribution is not actually a pension or old age security at all. Anyone who has paid any amount into it and then doesn't qualify for getting it back is getting taxed to the tune of about 15% for their entire working life.
So like I said, don't worry, if rich seniors get off the hook for health care premiums, they will make up for it in OAS clawbacks.
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Theoretically they should put enough away from your contributions that the investment income makes up for inflation and your contributions pay for your pensions. Politically, they didn't, so current old people paid very low rates until the 1990s. Then, rates went way up to pay for the undercontributions of the past. Essentially, current young people pay for their own pension plus a good part of the pension of someone who undercontributed their whole life.
OAS actually works out the same way, although the mechanism is different. The boomers paid for the OAS of the greatest generation when they were working, but there were many more of them to divide out the burden and they deficit financed it. As the boomers retire, the ratio of people collecting OAS to those working will be much higher, increasing the burden on the current workforce.