Some observers have slammed Finance Minister Jim Flaherty's 2012 federal budget for resetting Canada's retirement age to 67. Clearly criticism’s for such draconian measures are coming from those Canadian’s who have become accustomed to and comfortable with their “rights of entitlement” under our burgeoning nanny state that began to take shape in post-World War II Canada.
Let’s quantify these draconian measures that have resulted in those born in 1963 or later (the writer being one who falls within this demographic cohort) to be eligible to draw OAS two years later at the age of 67 versus 65.
If an individual born in 1963 feels it is their birthright to retire at the age of 65, and chooses to do so by increasing their personal savings in order to make up the two year loss of the maximum OAS benefit they need to somehow save an additional $12,962.88 over the next 16 years or $67.52 per month. This is assuming the money will be invested in an asset or security that will simply return interest payments or a dividend that will keep up with inflation. Let’s not even consider looking at any potential capital appreciation of an asset in this global macro-economic climate. For those born after 1963 they can do their own math but will quickly recognize the monthly burden and sacrifice to save will be less.
Wow, $67.52 per month! Although we are entitled to all the wonderful luxuries of modern Canadian life because we are all special how much is a; double skinny latte, deck of smokes, case of ale, bottle of wine, 300 channel digital TV subscription, cell phones for us and each of the kids, the brand new vehicle every couple of years, boat, quad, snow machine, or cruises on the Mayan Riviera?
It’s also important to note that when the Old Age Security Act came into being in 1952 and retirement benefit age was set at 65 the average file expectancy in Canada was 66 for males and 72 for females. Since this time average life expectancy has risen by over 11 years.
Once considering that I have to work and wait an extra two years to collect my OAS, but I’m also expected to live more than 11 years longer than my boomer generation parents, makes me conclude that Minister Flaherty has given me a better deal than I’m entitled to.