Increasing Retirement Savings

[amorak]

Originally Posted by the yen man

what really burns my fried rice is hearing stories of people who abuse our system here in canada. My uncle married a woman from china and so she sponsors her two parents to come over here. She doesn't work at all and just lives off my uncle. Her parents come over having never ever contributed to the tax system, live here for the minimum required years in order to become a citizen, and now they receive full oas and all the perks of being a senior in canada. Free health care and a multitude of tax breaks for my uncle for being his dependents.

Austrailia has it right. they don't accept immigrants past a certain age to avoid the situation i described above.

dear god why can't we have this?!

[MoneyGuy]

Originally Posted by The Yen Man

What really burns my fried rice is hearing stories of people who abuse our system here in Canada. My uncle married a woman from China and so she sponsors her two parents to come over here. She doesn't work at all and just lives off my uncle. Her parents come over having never ever contributed to the tax system, live here for the minimum required years in order to become a citizen, and now they receive full OAS and all the perks of being a senior in Canada. Free health care and a multitude of tax breaks for my uncle for being his dependents.

Austrailia has it right. They don't accept immigrants past a certain age to avoid the situation I described above.

Can't disagree with 99% of this, but will point out that OAS doesn't work that way. The parents of a woman who came here as an adult would not qualify for full OAS. Just sayin'. Otherwise, yup.

[fundmark19]

so 20k in rrsps put bi weekly installments equaling a total of 3k each year into mutual funds have 2 rental props and primary residence am I doing enough for retirement? I don't really have much investing outside of the mutual funds within rsp. I am in my mid 20's. My bi weekly investment is 10 percent of my net income for that period

[MoneyGuy]

Originally Posted by fundmark19

so 20k in rrsps put bi weekly installments equaling a total of 3k each year into mutual funds have 2 rental props and primary residence am I doing enough for retirement? I don't really have much investing outside of the mutual funds within rsp. I am in my mid 20's. My bi weekly investment is 10 percent of my net income for that period

Not enough info to say, but I'd guess you probably are doing fine. As I said, insufficient info provided. When I run these numbers I collect reams of info. You can'gt expect anyone to tell you for sure with just this....

[Phaneuf3]

Originally Posted by The Yen Man

Austrailia has it right. They don't accept immigrants past a certain age to avoid the situation I described above.

Don't accept any type of immigration at all or don't give full citizenship with all the perks that come with it?

[The Yen Man]

Originally Posted by Phaneuf3

Don't accept any type of immigration at all or don't give full citizenship with all the perks that come with it?

Not really sure, I only heard this from an ex co worker who was immigrating to Australia. He was telling me after a certain age, it's really hard to get Australian citizenship. They don't want people retiring there (because of their nice weather and beaches) and not contributing to the economy.

[Phanuthier]

Originally Posted by Cowboy89

I'm not really down with blaming and labeling entire generations as having money problems. It's rather a human nature problem. Most people don't have the discipline required to do what's necessary to retire comfortably, and of those who do, too many of them are too ignorant to execute it properly and end up stuffing all their money in ING Direct accounts or bank GICs that in effect lose economic value over time by the effects of inflation and taxation .

This is where I stand as well. I'm not going to say Boomers or mid-20's or kids these days are stupid. This is not generation specific, people of all generations do stupid things like live beyond their means and buy status cars and whatnot. I'm not going to say everyone is like me, but I gave a perfect example of a large (ignored) portion of mid-20's guys when I referenced all my roommates and I (5 of us) save a over 50% of our gross paycheck each month. And we aren't living a crappy lifestyle either, we are having a blast and enjoying life, we just don't need a BMW to do that.

I can't say much for mid-20's going travelling because I don't know their situation (? it is only $2000-3000 for a few months, which is half of a semesters tuition, and in some cases, many university programs are 5-year coops and internship salary is pretty good, so its not as big of a deal as you think... they aren't fancy hotels they stay in, its hostels). Back in the Boomers age, wasn't it common to buy a Ford Mustang or some crap like that when you came out of university? Are the Europe traveler also buying a BMW too? I'm pretty sure its common norm for all generations to spend to their fancy when they graduate, this isn't just a generation specific.

I can say, though, that I can understand kids living at home later. A university degree is the new high school degree, you pretty much need some post-secondary education whereas for the Boomers you didn't. Even a masters degree is common these days. Rent, cost of living et al has increased faster than annuel income, driven by demand and people buying. Yes that includes Boomers as well. But, I don't get this kids vs parents thing, so a kid lives at home, should a parent guilt them out of a house? At the same time, doesn't a child owe it to their parents to help them out when they retire? In my situation, I came from a average middle class family and I got a lot of help from my parents through university. Now I have a good job, and I have no problem helping them out through retirement and I'm probably expected to as well. Because they are family.

[Phanuthier]

Originally Posted by The Yen Man

Meanwhile, some of those kids have given up ever owning a home and are the ones buying expensive cars, iphones and ipads, and go on backpacking trips to Europe and Asia.

Lets back that truck up. Whats the difference between a 45 year old (working for 20 years) buying those vs a 25 year old (working for 3 years) buying this? (I assume you are talking about graduates here). A 45 year old, with a wife and 2.5 kids probably has probably 2x's the expenses to go along with 2x's the salary. In the end, the net result is the same for both, isn't it? So why is it suddenly a-ok for older people to do this, but not for younger people?

Also, if you do the math on it, a expensive car will kill you, but the rest won't. Own an iPad for 2 years, that $250 per year. For an average salary, thats nothing. Own a iPHone for 2 years, same thing - its really inconsequential. I have a motorcycle, insurance is $25 a year and I paid $3700 for it. Again, compared to a car, its nothing. Now for those that own $40k cars like a SUV or a BMW or Mercedes, you could tally up my motorcycle, my Honda car, a smart phone and it still probably wouldn't match what you pay for your car. So, don't start critisizing how others spend nickles and dimes when you are sinking bills into a new car.

(note: by you, I'm not saying you Yen Men, I don't know your situation. I'm targetting to people who drive expensive cars and probably struggle on their own, yet point fingers at someone else and say they are doing it wrong)

[The Yen Man]

Originally Posted by Phanuthier

Lets back that truck up. Whats the difference between a 45 year old (working for 20 years) buying those vs a 25 year old (working for 3 years) buying this? (I assume you are talking about graduates here). A 45 year old, with a wife and 2.5 kids probably has probably 2x's the expenses to go along with 2x's the salary. In the end, the net result is the same for both, isn't it? So why is it suddenly a-ok for older people to do this, but not for younger people?

Also, if you do the math on it, a expensive car will kill you, but the rest won't. Own an iPad for 2 years, that $250 per year. For an average salary, thats nothing. Own a iPHone for 2 years, same thing - its really inconsequential. I have a motorcycle, insurance is $25 a year and I paid $3700 for it. Again, compared to a car, its nothing. Now for those that own $40k cars like a SUV or a BMW or Mercedes, you could tally up my motorcycle, my Honda car, a smart phone and it still probably wouldn't match what you pay for your car. So, don't start critisizing how others spend nickles and dimes when you are sinking bills into a new car.

(note: by you, I'm not saying you Yen Men, I don't know your situation. I'm targetting to people who drive expensive cars and probably struggle on their own, yet point fingers at someone else and say they are doing it wrong)

I was actually just saying it's unfair to paint baby boomers all in a broad stroke. There are spend happy people regardless of age. I was just giving an example of younger people being irresponsible with money, that's all. I'm not saying all young people are that way.

[chemgear]

Yup, just like the fact that all realtors aren't bad/"evil incarnate" as some people might like to think or say. Forums here have more than shown that.

People seem to be readily acknowledging some generalizations as being a little unfair.

On the other hand, iphones/ipads aren't nickels and dimes. Monthly plan fees (though less than a car certainly) can be like 50ish a month before app/additional costs? In one instance, I know a family that can't afford their vehicle payments and are worried that it'll get repo'd soon - but it didn't stop them from buying a brand new iphone and ipad with their respective multi-year contracts.

[Azure]

Its pretty common for someone from our generation to live beyond their means too. So I don't think its fair to blame any specific generation of people.

People never save enough money. Fact of life. We all want to live in the now.

Better education, and more readily available long term saving plans would help. Providing more incentives for employers to match pension contributions, or even have their own pension plan is also a good idea.

There is no reason why CPP can't be grown in more ways than just contributions from the Canadian people. There are a variety of ways to invest the money that would offer some pretty good stable returns.

[Cowperson]

Originally Posted by Phanuthier

But, I don't get this kids vs parents thing, so a kid lives at home, should a parent guilt them out of a house? .

I'm reminded again that 80% of Italian males under the age of 30 live with their parents.

At the same time, doesn't a child owe it to their parents to help them out when they retire?

Around the world, the usual thing to see in poorer societies/cultures is larger families. You need lots of kids to take care of you in later life.

The wealthier a society becomes, the lower the birthrate.

The America of Tom Joad and The Grapes of Wrath has been in the rear-view mirror for a long time.

Cowperson

[The Yen Man]

Originally Posted by Phanuthier

I can say, though, that I can understand kids living at home later. A university degree is the new high school degree, you pretty much need some post-secondary education whereas for the Boomers you didn't. Even a masters degree is common these days. Rent, cost of living et al has increased faster than annuel income, driven by demand and people buying. Yes that includes Boomers as well. But, I don't get this kids vs parents thing, so a kid lives at home, should a parent guilt them out of a house? At the same time, doesn't a child owe it to their parents to help them out when they retire? In my situation, I came from a average middle class family and I got a lot of help from my parents through university. Now I have a good job, and I have no problem helping them out through retirement and I'm probably expected to as well. Because they are family.

I lived at home until I was 29, and I'm not ashamed to admit it. It was pretty sweet. My mom was pretty choked when I finally moved out. But I notice this tends to be a North American thing vs. an Asian thing. Asians generally want their kids to live with them forever. I find they value family closeness over individualism a lot more than North American society.

[fundmark19]

I am not asian and my mom begs me to move home on a weekly basis. I say i'm getting sick she says move home to get better. Then I respond with "Mom I am 23 married and have my own house I am not moving home!" She then gets sad and a week later tells me to move home all over again.

[Cowperson]

Originally Posted by fundmark19

I am not asian and my mom begs me to move home on a weekly basis. I say i'm getting sick she says move home to get better. Then I respond with "Mom I am 23 married and have my own house I am not moving home!" She then gets sad and a week later tells me to move home all over again.

The opposite trend is adult children are becoming increasingly resentful of the oozing love their formerly formal and frosty parents shower their current pets with.

"Where the hell were these parents when we were kids?" is the lament.

Pets are like a do-over for parents. They've got a second chance to make right all their previous mistakes.

There was a great article on this about a year ago in the Globe & Mail or National Post and I've seen other references around . . . .

Pretty funny actually.

Here's something from David Foot, the great demographic mind . . .

http://www.footwork.com/globe5.asp

Cowperson

[The Yen Man]

Oh, I'm not saying all Asians are a certain way and all North Americans are another. I remember learning in school that from a general society perspective, the trend in Western culture is to value individualism and freedom from family vs. Asian culture of family closeness and living with large families.

Just as I expected my parents not to kick me out of the house once I turned 18 and help me out while I was going to university, I also expect to take care of them once they're older. And I have no problems with that.

[looooob]

Originally Posted by Cowperson

The opposite trend is adult children are becoming increasingly resentful of the oozing love their formerly formal and frosty parents shower their current pets with.

"Where the hell were these parents when we were kids?" is the lament.

Pets are like a do-over for parents. They've got a second chance to make right all their previous mistakes.


Cowperson

I've also heard similar issues from some adult friends about their parents interaction with the grandkids as opposed to themselves when they were kids.

[chemgear]

Originally Posted by The Yen Man

I lived at home until I was 29, and I'm not ashamed to admit it. It was pretty sweet. My mom was pretty choked when I finally moved out. But I notice this tends to be a North American thing vs. an Asian thing. Asians generally want their kids to live with them forever.

Indeed - it's not uncommon to have multiple generations within the same household.

Come to think of it, I wonder what the numbers of "old-folks" homes would be in North America versus say Hong Kong. I'd imagine much more prevalent here.

[Rathji]

Originally Posted by looooob

I've also heard similar issues from some adult friends about their parents interaction with the grandkids as opposed to themselves when they were kids.

You always give grandkids back, so it is easier.

I am amazed how good my mom is with my kids. We talked about getting a sitter or using daycare to cover overlap when my wife is at work, and she said "no way am I going to let that happen when I could be spending time with them", so she rearranged her work schedule and 2 afternoons a week my kids spend with Grandma.

[Tinordi]

http://canadianfinancialdiy.blogspot...er-choice.html

"The principal finding of this study, however – that is, a projected gradual increase in the proportion of future retirees likely to experience a significant decline in their standard of living upon retirement – persists even with differing assumptions for future real wage growth, inflation, rates of return, RPP coverage, and future saving rates." (page 2)

"... the proportion of newly retired individuals unable to replace at least three-quarters of their average pre-retirement consumption from the sources we model is projected to nearly triple over the next 40 years (see Figure 9). If current trends persist, by the 2046-50 period, about 45 percent of workers currently aged between 25 and 30 years would not meet our 75-percent threshold ... " (page 20)

"This decline in potential consumption replacement would be felt across the entire earnings distribution ... " (page 20)