Quote:
Originally Posted by Locke
Yeah, I'd be interested in hearing your perspective on this because in my experience people are getting to 'retirement age' and then start collecting their CPP and OAS and realize:
"Oh what? I cant retire on this."
Because they may not own their own homes outright or they dont have their own RRSPs or various other retirement savings methods.
And at the same time, part of what sparked the Estate Tax debate is the fact that CPP and OAS are not magic, they are pension funds and the current generation drawing from those funds are drawing significantly more than they contributed, this is what makes most modern pension funds a Ponzi scheme, they constantly have to find new suckers to contribute to pay the old suckers who are collecting.
How about turning the discussion on its head somewhat and coming back at the original point?
How would you feel about, instead of an Estate Tax, a requirement for full financial holdings disclosure and anyone who has a net worth at retirement (65) in excess of $1M becomes ineligible for CPP and OAS regardless of their lifetime contributions?
It would help alleviate strain on the pension fund and yet doesnt adversely effect those who need it.
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That is an interesting one. Personally, I don't have a problem with having people not qualify if they exceed some limits. The question again, is what should the limit be? I don't think you can base it on net assets - a million is not much for a couple facing 40 years of retirement for example.
I think you would have to base it on income - if your income is greater than X, then you wouldn't qualify for OAS and CPP (that year, making it an annual test).
To me, this is a better route to go, because, instead of taxing savings (estate tax), it reduces pressure on the social safety net.
Also, what if someone's savings disappeared? If you based it on assets, and turn them off, they might be screwed at some point.
But if you base it on income, if they lose their savings, then their income would drop and they would requalify.