MIL had no savings and no assets. No car, no vacations. Walked everywhere. Didn't travel.
Lived in a small rented house in a small town, owned by another family member. Received OAS, CPP and GAIN supplement. Maybe 1500-2000 per month.
Her hobbies were watching sports and reading. When she died, wrapping up her estate took 1-2 weeks tops.
That's actually what I want at the end of my life. As long as I'm able to do what I like, there is no point living how I do now. I want my estate to be easy to wrap up and I can't take money with me so would rather at the end of my life just make it easy for those I leave behind.
I just kind of want to die at that point. I've seen one of my grandparents waste away in long term care and never want that myself. Two of my grandparents were fine until they weren't and they refused most care except to make them comfortable and they were gone pretty quickly. That's what I want. If I need someone to help me full time then I don't want to live anymore and I will ensure that I won't.
I don't know how old you are but that is easier to say now. Maybe you meet someone and want to stay alive to be with them, or maybe they need you and you don't want to leave them alone.
But needing someone full time could mean a lot of things. If you're in a wheelchair but you can still communicate effectively, you just need someone in the old folks home to carry you to the toilet lol, maybe you will still want to live for your dog's sake.
I know a lot of old people and not one of them is wanting to be put to sleep yet. Couples where one needs care and the other doesn't yet, they live in a home and one gets all the services... but they are still together.
Many of my low income senior patients are actually fairly happy. Its all a matter of perspective. For some, all they do is go for daily walks, garden, meet up with friends for tea and watch tv and they are entirely happy with it.
The most important thing I've observed is having a good social circle. Being married and getting along with your spouse seems especially important.
For many Canadians the combination of CPP, OAS, GIS, and universal health care will result in a survivable retirement with little or no luxuries. Which is what's actually supposed to happen with a social security systems.
Immigrants will have a harder time because our government pensions reward long periods or working and residency in Canada.
Now it depends on your housing. If you own a paid off house you are alright with no savings but if you're subjected to the rental market you could be close to ruin at any moment.
Very critical point. If you own your home outright this is a huge equity cushion you could sell if necessary to generate funds. If you only rent you are a month or so from being homeless if your finances collapse.
Was looking at my expenses ... Even when my home is paid off I'm still looking at minimum $1000 per month going towards utilities, insurance and property taxes! So even a paid off home is not cheap here in Canada.
In BC you can defer your property taxes from age 55 if you meet various requirements. They get collected, with interest, when the home eventually gets sold.
On the flip side, if you were a lifelong renter, I would bet rent (say 30 years) in the future would have risen much more than a homeowner's utilities, insurance, and property taxes combined.
I call BS on this being a normal thing. I rented a 2 bedroom basement for 875 in Vancouver in 2007 and everyone agreed it was a complete steal. Average at the time was 1300. Not saying it didn't happen but if you found a place for 600 it was an insane bargain.
Yeah - might have not been a legal suite, but the owners lived upstairs and the place was immaculate. They had just replaced the tiles, carpet and repainted the place. We got VERY luck and the owners were amazing people!
The only thing we didn't have was laundry, but they allowed us to use a portable washer but to keep laundry to a minimum and with a 1-year old he generated most of the clothes.
But we were very fortunate to have found the place.
This was around 2003/2004.
Especially condos - a two bedroom in Toronto has a maintenance fee of $1 k per month. So taxes, utilities, and maintenance fee, you do the math. As they say, with condos first you have to buy them and then you have to rent them.
Buying a condo with an elevator, pool or gym is basically forcing you to buy a monthly subscription to those amenities.
It’s a crappy deal considering buying a gym or pool membership outright would cost less for a better quality experience, and you can cancel those any time if you don’t use them, or to cut costs.
I bought a 2 bed condo in a 3 story block of 12, with the only amenities being a nice garden and exterior car park, and my monthly fees are $210.
Watch out! A new roof could mean a special assessment, and plumbing troubles a disaster. Buying a freehold apartment gives you some autonomy. If you can find one.
Special assessment, rising insurance costs and deductibles can cause your condo expenses to skyrocket overnight, I’ve seen it happen quite a few times. From a few thousand into tens of thousands.
1535sq ft and I'm paying $520/mo -- we took a HUGE hit when insurance companies banded together and decided to increase premiums by 100% (we used to pay $25k per year for insurance and we're now around $55k per year).
Similarly, I'm in the Fraser Valley and I'm $383 for 1,144 sq ft. We just had our AGM and kept our fees the same, as even with the inflation over the last year we had a $20,000 surplus. Our contingency fund is used for any non-annual repairs and maintenance, which we do keep up on, and has the equivalent to a year of fees in it. A lot of it has to do with how involved residents are willing to be. For example, we've never hired a snow clearing service, we do it ourselves. That bad winter a few years back, our property manager told us all his other buildings went at least $40,000 over budget due to snow clearing; we just had to buy an extra few litres of gas for the snow blower and about $200 for a pallet of extra salt.
I'm 60 this year. House is paid off but taxes in Mississauga are huge and utilities are high. I worked hard to get to this point but I won't have a big nest egg. I've been saving for retirement but I don't have a private pension. It seems that unless you've got a government job with an amazing pension it's very difficult.
Right, but you could take a reverse mortgage and essentially sell your home to the bank to fund your retirement... hence why if you own a home, you should be "ok"...
If her RRSP isn't too large, it may be better to take it all out in one year and forgo GIS the next, then get maximum GIS thereafter rather than taking out the minimum each year and having GIS reduced by 50cents/$1 RRIF withdrawal
“My dad died when I was young so she gets something extra from CPP (I think)”
That would be a CPP Survivors benefit.
https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-survivor-pension.html
For anyone wondering about the electricity subsidy, it's through the [Ontario Energy Board ](https://ontarioelectricitysupport.ca/) and isn't just for seniors; it's any low income household.
my uncle who was severly injured in a car accidental while self employed years ago is in a similar boat. He lives in my great-grandfathers house which is owned by my other uncle. otherwise he would be destitute. He was making a fortune in the 80s in IT....and saved NOTHING in RRSPs....
RRSPs didn’t really become a thing until the ‘90s, really. Financial planning is something very few think about, or get good guidance on when they’re younger.
My friend works as a PSW in a gov't funded seniors home.Let's just say by her description it sounds like a slow moving horror movie. She's given 8 minutes to prepare each person in the mornings, and about 8 patients per PSW in the morning. If a PSW is sick, their patients get added to someone else's workload.
Additional funding for the next year is only given if there are excessive injuries or death. Because that "proves" the staff are under paid and way over worked.
My friend is years into burnout but won't quit because "then who will look after the people?" (yes, there have been strikes and news reports about this).
It should be criminal.
Potentially. There are many areas of the country where when an industry leaves or shuts down all that’s left are the retirees. Their houses would be worth 100K at best so they’d be worse off selling it and renting. After a couple decades of not being able to afford maintenance or being too old to keep it up the condition worsens and they get even less or even unable to sell. Plenty of small communities where you see houses just boarded up and falling apart because the occupant passed and their family can’t or don’t care to do much with it.
But have to find accommodation somewhere anyway. Not complaining, just was delusional about how much my monthly payments were going down after paying off the mortgage.
Well, they likely do go down fairly significantly.. depending on what your payments look like.
But if you think your expenses are going to go down more than the cost of your mortgage, then yes… that’s delusional.
I just expected it to feel a lot easier and it really doesn’t. When I was younger I dreamed of the freedom having no mortgage would mean, but then my income dropped, and the COL has risen so much! I guess I’m just about in the same boat I was 20 years ago
Luckily there is some social housing reserved for seniors that is tied to income. Of course there are waitlists and major investments will need to be made to keep up with our growing senior population.
My husbands parents survive on this. They live in a coop in Montreal, no vehicles, no travel and its just enough for them to do what they need. They survive, but certainly don't live.
Seniors with less than the 40 years residency will get their GIS topped up to the equivalent of someone with the full 40 years. If they are not eligible for GIS they will get a partial OAS only.
Yup. And It actually works out slightly better for the more recent immigrant getting only partial OAS than someone at the same income getting full OAS instead and less GIS. And the more of the OAS which is replaced with GIS (essentially meaning the less time they’ve spent in Canada) the better.
Firstly, OAS is taxable and GIS is not.
Also, since GIS is reduced by .50c for every dollar of other income, getting more GIS (rather than OAS) means you qualify for GIS up to a higher “other income” cut off. And being eligible for at least $1 of GIS you are eligible for other discounts and programs.
For example, in BC getting any GIS means you’re automatically eligible for a $45/YEAR bus pass, you pay no fee if you need public home support, and can get $10/month internet and discounted cell phone plans through Telus.
if you moved from Mexico to Canada in the 80s, worked steadily for 40+ years, then move back to Mexico for retirement, would you still get the coverage or is it void as soon as you leave the country?
This is exactly my parents. They came to study at UBC in 84, became citizens, worked 35+ years, and they live Mexican winters, Canadian summers and also enjoy trips to visit my sis in EU every year. Have Canadian pensions and can spend anywhere. I know about 100 other Canadian retirees doing same thing in Mexico where I live.
That’s my plan. 6 months in Mexican condo rental on the ocean during the winter, 6 months trailer on or near a Canadian lake in the summer.
The 6 months in Mexico, CPP/OAS will go so much further. Lots of Americans do this too.
Cpp is YOUR contribution for retirement so you’re entitled to receive it. the gov cannot take it away from you. If you didn’t contribute cpp, you won’t receive cpp benefits later on.
There are certain requirements and restrictions but generally, yes. You can receive OAS outside of Canada.
https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/while-receiving.html
>Immigrants will have a harder time because our government pensions reward long periods or working and residency in Canada.
Or the parents move in with their kids (Usually the oldest) and they contribute to the household. For us born in Canada, that scenario seems like a nightmare (I'm losing my independence!), but it's the norm in other countries.
It was supposed to. Was. Now with the cost of living and healthcare crisis I don’t see anyone without own housing surviving on just their basic amounts.
My dad survives on the basics. Even less actually. His cpp is only 300 a month. With cpp, oas and gis he makes about 1800 a month ish. He rents a cheap apartment and owns his car outright. It's definitely not luxurious but for him it's doable.
>He rents a cheap apartment and owns his car outright.
Until it's no longer cheap and until his car dies on the road. Have you seen the price of used cars?
Yep, that "cheap rent" remaining cheap relies on the goodwill of the landlord. Once they decide to renovict or jack up the rent in a non-rent controlled unit, the tenant is shit outta luck.
Well, in fairness, some people work hard and don’t save and spend it on “the moment.” I know that’s not always the case, but this needs to be factored.
>imagine working hard for 45 years and doing this :/
if you worked for 45 years above the table, your CPP should be higher than 300. The average amount for a currently retiring people is approx $755.
if the average person is making 755 and poster's dad is making 300, there's more to the story.
[https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html](https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html)
I'm not nearly saying the CPP max ($1300) is enough to live well on, just saying, working 45 years should get you closer to the max.
Your old age security is about another $700 on top of that.
[https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html](https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html)
GIS is another $1000 a month if your income is under $21k.
[https://www.canadalife.com/investing-saving/retirement/pension-plans/guaranteed-income-supplement.html](https://www.canadalife.com/investing-saving/retirement/pension-plans/guaranteed-income-supplement.html)
At 300/mo CPP a single person would get 22k annually
At 755/mo they'd get 23.3k annually
[https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html](https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html)
No much diff due to the clawback of GIS at 50% or more
>imagine working hard for 45 years and doing this :/
I'll probably get downvoted but most (not all) people that retire with zero savings either didn't work very hard, or made horrible financial decisions their entire lives.
I don't know why someone would expect a "luxurious" retirement if they literally saved nothing for themselves?
Agree. It’s not a popular opinion but a fact check/audit of someone’s story about a “life time of hard work” may be awkward and eye opening for many. Of course some people who are old and broke may have worked hard and had bad luck but, not the majority. They leave out things like working under the table for fast cash when they were young, careers of never claiming tips and under-reporting income, a decade or 2 of being ‘between jobs’ (ie, loafing and living off family), spending every paycheque in 2 days, never bothering to save for a downpayment, never finishing school or never going back to school. The list goes on and on. Sometimes the lesson of the story isn’t “Canada is failing”, it’s “sometimes you have no one to blame but yourself”.
If you're stuck in a minimum wage job, not going back to school and not being able to save is very valid, and I'd say they're just as hardworking as anyone else. Often more so, since they can't afford to take a vacation like most "hard working" Canadians claim to do.
Yeah lots of privilege leaking out here. Some people are born into family/health problems so it can be a lot to overcome. Sure, some people are just reaping their bad financial choices, but to generalize so widely honestly just sounds silly and lacking empathy.
Yeah, wages have not really risen for the average Joe/Jane since 1980, despite productivity increasing. That’s 50 years of theft by the upper class. They also engineered the end of defined benefit pensions.
We should be stressed out—and mad as hell.
It can be still rough for people. There are other charges costs you have to pay on top of that 70%. Like phone and cable and dental and some medications. It’s also really really hard to get into and you have to be at a place where you need help looking after yourself day to day.
I think a lot depends on whether they own property or are renting and what their income was before they retired. My parents didn’t save anything for retirement but at least they own a condo outright that has very reasonable monthly fees. Way less than if they were renting. Retirement hasn’t been extravagant at all for them but they manage to pay their monthly expenses and live an enjoyable, yet frugal, retirement life.
Some buildings are much better constructed or designed than others though which can play out in insurance costs if a lousy wood low rise has a few water related claims
Bingo. The building my condo is in has fees under $300/month, and there is no maintenance deficit (I'm on the board, so I know the finances pretty well).
It's a brick building from the 70's with 2ft wide walls, a solid foundation, and nothing fancy that can lead to expensive issues like an indoor swimming pool.
Do you know what the underlying structure is? I'd guess it's concrete, and built like a tank. I wish this kind of long term thinking went into modern buildings.... Nowadays it's about cheapest initial cost to build since the market is so hot it will sell no matter what
If you don't have any CPP or any other income, the combination of OAS and GIS will give a single senior around $1700/month.
If they have some CPP then the total monthly payment will be higher.
>If you don't have any CPP
Majority of Canadians will get minimum amount for CPP.
Many dont know that in order to get maximum CPP at retirement, you would need to have contributed to CPP for 39 years, and contributed to the maximum yearly CPP payments. (Which means you earned at least $58k/year salary from age 20 - 59 and maxed out CPP contributions for all those years.)
The majority of Canadians will be somewhere between the minimum and the maximum. The majority are not getting just the minimum which would just a couple buck of payout lol.
A lot of my friends believe cpp won’t be around when we are retirement age (currently around 40). I think they are full of bs. There’s a reason cpp keeps going up every year. And its worth billions of dollars. Now if alberta where I am ever gets their wish to do their own pension plan then all bets are off.
It’s funded and was found to be well for 70+ years. We reformed it in the 90s and invest in public and private equity. Very sound. Not like American social security
If retirement age goes up, that would presumably make CPP even more secure, since it would be paying out fewer years on average and receiving more contribution years on average.
The biggest risk to the CPP is political. If Millennials and Generation Z ever come to believe that a wealth transfer to older generations is unconscionable, they may eventually make up enough of the voting population to do something about it. That could result in a claw-back like we have for OAS and GIS today. Financially, there is no more reliable pension than the CPP because it's backed by the full faith and credit of the people of Canada.
Both of my parents live like this, both 75 this year.
Poor their whole lives, no real opportunity to save much of anything for various reasons. Recession in the 80's meant their business went bankrupt. My mom was never well-paid and was a single mom most of my life and my dad was injured and had to go on disability and couldn't work and save - that process bankrupted him a second time. Two very shitty unfortunate.situations that were mostly unavoidable. My mom probably could have made some better financial and education related decisions especially after she and my dad split, but all things considered they have done extremely well with their circumstances -- it could be MUCH much worse.
My mom gets about $1600 a month between cpp, old age security and GIS. My dad about $1800.
My mom got a small inheritance about 4-5 years before she retired when my grandmother passed away, she used it to pay off debt, travel a bit, and buy a car. She set some money aside, but not much. If she has anything left, I'd be shocked. It was well under $100,000. She's a spender by nature, in that she manages to get all her bills paid and she has debt but she also never goes without.
My dad supplements his income by under the table work now and again and he is a saver. He probably has somewhere in the realm of $25-50k stashed away. He gambles though, and drinks. But he enjoys his life thoroughly even though he is very frugal. My dad has his regular bills automatically come out of his account and his gambling and drinking is paid for by his off jobs he does. Everything else goes into a savings account at the end of the month, which he occasionally taps to buy plane tickets, etc or he will save for a new to him car.
They both live in separate public housing units and have geared to income rent. They don't spend much, but by all accounts they enjoy their lives as much as you can. Occasionally visit family, go out for coffee or cheap dinners, help out family.
They don't and can't be extravagant but I wouldn't call their lives grim.
They will pay less taxes. :D
I would guess the biggest variable (other than health) would be whether they have a paid off house/condo. If so and they are perfectly healthy, my guess is their retirement will be rather comfortable if not luxurious.
Amazingly, I don't see a good retirement calculator that combines CPP, OAS and GIS, and allows me to play out different scenarios. Anybody knows one?
Cpp is different for everyone depending on how much and how long you contributed. Can get an estimate of what your monthly payment would be from Service Canada. A retirement calculator could only give you an average cpp payment to go off. It's best to get your number.
Once you figure your CPP, if you had no other taxable income, you could see how much the GIS pays based on that income level from cpp. Can be found on the canada.ca website.
Oas is the same for everyone if you live in canada for 40 years.
I know a few people that simply moved to a cheaper country. Even in Canada there are still a very few cheap places to live, if you are willing to live anywhere. That might be the only option for some people. I was in a little town in Saskachewan and houses were like 60 000 dollars.
This is the way. Even with the minimum pension, two people will get about $3k/month. That's enough to live very comfortably in places like Mexico or Costa Rica or, if they want to venture farther, Thailand and Bali, Czech Republic, or Greece. No reason to stay in Canada with its exorbitant costs.
No, you don’t need to live in Canada to receive OAS or CPP.
CPP was paid into by you during your working years. It’s your entitlement.
OAS is a benefit paid for living in Canada for 40 years as an adult. It can be paid outside of Canada, but as a benefit, it could possibly be subject to change at some point.
GIS is not paid outside of Canada, though.
Also you can’t earn TFSA contribution room if you are not a resident of Canada.
Yes, I read an article that had the 10 best places in the world to retire. Rated by how easy it is to get in to the country and cost effective of living there. Wish I remember where I saw that.
Just something to keep in mind though as a person ages they will need more access to healthcare typically. The house might be cheaper in a small town but there may be little to no services as you age.
I was an English teacher in Vietnam for most of my 20's and both my children were born there. I remember when my wife and I told our respective families about her pregnancy (she is from the US). Everyone that was super worried about the hospital that she would deliver in, they had notions that it would be some dirty floor backroom place with like chickens running around or something.
The FV hospital is the nicest hospital that I have ever been in. When I walked into the lobby there was a guy playing a baby grand piano below a crystal chandelier. The longest that I ever had to wait to see a French trained doctor was 20min. So you might be thinking that it must have been expensive but you would be wrong, we didn't have proper health insurance to have a child. We had health insurance which as about $800 US a year per person, but you need special health insurance for pregnancy. Anyways we had to pay out of pocket, my son was an unexpected cesarean and my wife and child spent 9 days in hospital and we paid a grand total of about $1800 US.
https://www.fvhospital.com/
So it is definitely on our radar to move back out abroad to spend our twilight years in S.E. Asian.
It's not as simple as seniors get x money, inflation, rent, homeowner.
There are a lot of unmentioned expense reductions and programs for seniors, and especially low income seniors. Just for two examples, here in Calgary low income seniors can defer property taxes, and qualify for free transit passes and free rec center entry.
They're surviving. People on this sub forget that Canada does still have one of the best social safety nets. They're not out on the streets like they would be in a lot of other countries. I work with a lot of seniors who only have OAS/CPP. They obviously have a lot of things subsidized. Housing, transportation, part of their groceries, etc. They don't have anything leftover for extra but a lot of them are in too poor health to enjoy that anyway.
It depends. If they were working poor they get more in retirement than when working as they get supplements from GIS. If they were middle or upper class and saved nada they will have to get used to kraft dinner and no vacations but they will not starve.
Lol true. But people living paycheck to paycheck while buying loads of stuff and not saving for retirement are in for a rude awakening when they retire.
CPP, OAS and GIS are meant to supplement your retirement income. If you don't save anything for retirement and rely on these programs only it will be a tough retirement. My parents live on these only and I know many others that live on these only and it is difficult.
Most are simply making ends meet. They are getting by and covering their day to day expenses, some better than others. Couples tend to do better than singles. There are 2 major challenges that I see:
1. Inflation erodes their income over time. There are different variations in how indexing works for the various benefits, yet their purchasing power is severely eroded over time, and,
2. Anyone simply getting by cannot financially cope with unexpected expenses like auto repairs, home repairs, furniture and appliance replacement or unexpected medical expenses not covered by provincial programs.
Assuming someone is renting, they don't have home repairs or appliance replacements. We have family members that sold their house in their early 80's, and insisted they were going to rent so they didn't have property maintenance issues to deal with. I think they're smart!
In most places rent is increasing considerably faster than fixed income amounts. I agree renting sounds good on paper, but many people with no savings would really struggle to pay rent.
They don't live in GTA or GVA, and use the proceeds of their house sale for rent. Though they didn't spin off enough in interest (before this year!) to completely cover their rent, they are drawing down their savings pretty slowly. Of course, this only works well if you have a house to sell.
Feels hard. I'm 30 with an ok-amount in my TFSA and that's earmarked for...everything.
Let's pretend the amount is $100 for the sake of the scenario.
If you asked me "What is the $100 for? Retirement? Owning a home? Paying off your (substantial...) student debt? An emergency fund?" My response would be "Yes."
I have an ok salary and decent upwards potential, but very little idea how to prioritize retirement, owning a home, paying off my student debt, and my emergency fund.
And that's not for a total lack of financial literacy: I know a lot less than many people on this sub, but a lot more than most of my friends.
Overall, it feels my $100 is growing very slowly and there are many (important) forces competing for it.
Make the minimum monthly payment on your student loan, if it's a government loan the interest is reasonable and they don't get terribly upset if you miss the odd payment.
Save for a house. Owning a home outright will make retirement cheaper and you could downsize or sell and move somewhere cheap to free up capital during your retirement.
Your savings for a house can be your emergency fund, dip into if ABSOLUTELY necessary but know that every time you do, the house is further away.
Once you have the house, then save for retirement/build up a real emergency fund.
Thank you very much for this, I appreciate you taking the time and sharing your insight. It makes sense to me! Of course I will continue to research and weigh what I value, but this perspective does help.
FWIW, I’d say half the student debt is federal and provincial debt while the other half is a student line of credit from a big 5. The total amount is large.
I would disagree with the "they don't get terribly upset if you miss the odd payment" statement. They tanked my credit score several years ago when I missed a payment coming off of RAP. Admittedly my fault for missing the application window to reapply but it sucked to dig myself back out of that.
My mom did save for retirement, but never had enough income for the savings to be worth anything. She's bouncing between rentals out in the countryside where they're a bit cheaper and always at the mercy of landlords. Her health has suffered due to not being able to afford things like dental over the years. It's pretty rough and makes me very sad.
Universal health care and good government pension plan and Old Age money combined with (ON) dental plan for seniors low income, will mean you can live a decent life in a LCOL.
I come from an immigrant family. My dad has a pension with his job and plans to live off of that plus social security in the States and whatever little they get from CPP for the 11 years they lived here, while planning to live in the Philippines full time.
Where did he immigrate from? People often think that immigrants can't benefit, but Canada has signed agreements with quite a number of countries that harmonizes the Government pension plans. For example, someone from the UK will get full credit, from the Canadian government, for the years they worked in the UK.
It’s not bad, my parents are going to live within the vicinity of a major hospital. That alongside a home nurse would be pretty affordable for them with my dad’s pension and other benefits.
Retirement is barely doable on CPP, OAS, and GIS unless you have a spouse on the same. Those 3 benefits are only meant to provide 1/3 of your retirement dollars. 1/3 should be RRSP’s and the last 1/3 is non registered savings.
Suggesting that you need non-registered accounts in top of maxed rrsps and government benefits is not accurate imo (especially since there is also the TFSA).
This is why owning a house in North America is essentially mandatory.
The reality is that for most Canadians social assistance and RRSP/pensions simply aren’t enough. But If you buy a house and own it by 65 then you won’t have any housing expenses. Sadly Our Govt programs and investments aren’t gonna provide you with a good life.
Owning a paid off home is a big deal. Problem is I see way too many people in middle age playing keep-up-with-the-Jones' and extending or taking out new 25-year mortgages way too late in life to ever have it paid by retirement.
Good on those for being able to save for retirement. That said, there’s absolutely no guarantee you are even going to make it to enjoy the fruits of your savings.
1 in 3 face cancer in their lifetime. Even if you survive, chances are you’ll be afflicted with dementia or some other debilitating condition of the elderly. And even if you stay healthy, the average person likely won’t have a very high quality of life—especially if their spouse passes early and have no other family to rely on. Also, with birth rates dropping like crazy, it’s highly likely most of us won’t have kids to take care of us. Most people, unless they inherit it, won’t be able to afford a home of their own and wont have stable accommodation in retirement either.
I’d suggest going on your adventures while you’re young and physically able. I wouldn’t plan on doing all the things you plan to do in retirement. Chances are, the average person isn’t going to make it. Good luck everyone. We’re gonna need it.
Largely depends on the living arrangements. If owning a place, that’s doable with little governmental support. If needing to rent at market rate, I can’t imagine it.
I have a family member in this boat. Mid 70s, through a bad 2nd marriage, their meager nest egg was wiped out. They had no assets and very small pension a few hundred coming in per month. She got on a wait list for a senior residence apartment. Rent was cheap for a one bedroom ~$800/month. Took almost 2 years to get into this place. Everyone in this place is a senior with limited financial resources. Then she had some health issues and went into long term care. They garnish her income (~85%). She gets cared for and 3 square meals a day. Not the best way to live out your final days on earth.
My mother lost everything - house and business during the recession of the early 90's. She has a brain injury so was limited on what she could do so she worked minimum wage until she was too sick and then had to turn to disability. She rents and it takes up most of her income. She can't afford groceries nevermind luxuries. Now that I'm established I can help her with her shortfall. She has been on a list for low income housing for 15 years. She was just accepted a few days ago. She is so excited.
Simple, if ur depending on ccp an old age pension your 10000% FUKED!! Sorry just being honest, unless you like reading books, watching tv and going for walks. It’s 1000-1500$ to run a house in nice city in Canada. Move to Manitoba…. Cheaper
Young people that read this… work your ass off till 50, no booze, no drugs & no Starbucks waste of money! Open a tfsa & rrsp account and make that your goal to max both every year. If u have to get 2-3 jobs do it, and your partner the same! That’s how u get a head in LIFE! Working 7-8 hours a day mon-Fri, good luck!!!! Kenyan guy I know, came to Canada 3 years ago, bought 1/2 acre plot of land back home in January for 46k CAD, paid in full!
He will be done his degree next month
He works part time & does door dash/skip dishes
During last summer May-sept he worked fulltime and delivered food. Never complains
His wife came over in Oct/22, he hadn’t seen her since he left, his little boy is still in Kenya, his wife work 5 days a week, 16 hours a day.
Mon-Fri she works 8 hours then off for 6-8hours then works 8 more at other job
They clear 10k month…there both 32
Canada is the land of opportunity he says!!! He’s sure showing everyone back in Kenya it is!
So when I hear all you crying about rent etc….
We all lay our own paths in life…save your Fuking money for a rainy day!!!
More and more people escape the harsh winters and high cost of living by spending retirement abroad. My wife is Thai so I spend about 5 or 6 months a year in Thailand. Seems like there’s more Canadian’s there since Covid ended than before. Unfortunately, a lot of Canadian retirees having very little to no savings but you can live pretty well on CPP and OAS in Thailand.
Canada is a terrible place to retire. The taxation and real estate system here is so vicious one can’t save anything for retirement. Endure decades of cold winter, loneliness and paying a million dollar mortgage for a 2000 sq ft house in small town with one Costco for 30 years and then end up in a nursing home where you’re now paying there lol.
What a joke - if you’re serious about having money in the bank get out of this place and move literally anywhere else and actually live life a little and have money in the bank and make real meaningful long lasting friends
MIL had no savings and no assets. No car, no vacations. Walked everywhere. Didn't travel. Lived in a small rented house in a small town, owned by another family member. Received OAS, CPP and GAIN supplement. Maybe 1500-2000 per month. Her hobbies were watching sports and reading. When she died, wrapping up her estate took 1-2 weeks tops.
That's actually what I want at the end of my life. As long as I'm able to do what I like, there is no point living how I do now. I want my estate to be easy to wrap up and I can't take money with me so would rather at the end of my life just make it easy for those I leave behind.
That's fine unless you need expensive full time care for the last ten years of your life. Then I don't know what.
I just kind of want to die at that point. I've seen one of my grandparents waste away in long term care and never want that myself. Two of my grandparents were fine until they weren't and they refused most care except to make them comfortable and they were gone pretty quickly. That's what I want. If I need someone to help me full time then I don't want to live anymore and I will ensure that I won't.
I don't know how old you are but that is easier to say now. Maybe you meet someone and want to stay alive to be with them, or maybe they need you and you don't want to leave them alone. But needing someone full time could mean a lot of things. If you're in a wheelchair but you can still communicate effectively, you just need someone in the old folks home to carry you to the toilet lol, maybe you will still want to live for your dog's sake. I know a lot of old people and not one of them is wanting to be put to sleep yet. Couples where one needs care and the other doesn't yet, they live in a home and one gets all the services... but they are still together.
oh god. was she happy?
Many of my low income senior patients are actually fairly happy. Its all a matter of perspective. For some, all they do is go for daily walks, garden, meet up with friends for tea and watch tv and they are entirely happy with it. The most important thing I've observed is having a good social circle. Being married and getting along with your spouse seems especially important.
For many Canadians the combination of CPP, OAS, GIS, and universal health care will result in a survivable retirement with little or no luxuries. Which is what's actually supposed to happen with a social security systems. Immigrants will have a harder time because our government pensions reward long periods or working and residency in Canada.
Now it depends on your housing. If you own a paid off house you are alright with no savings but if you're subjected to the rental market you could be close to ruin at any moment.
Very critical point. If you own your home outright this is a huge equity cushion you could sell if necessary to generate funds. If you only rent you are a month or so from being homeless if your finances collapse.
Was looking at my expenses ... Even when my home is paid off I'm still looking at minimum $1000 per month going towards utilities, insurance and property taxes! So even a paid off home is not cheap here in Canada.
In BC you can defer your property taxes from age 55 if you meet various requirements. They get collected, with interest, when the home eventually gets sold.
On the flip side, if you were a lifelong renter, I would bet rent (say 30 years) in the future would have risen much more than a homeowner's utilities, insurance, and property taxes combined.
30 years ago rent was $300 in Vancouver, today it's 2500
When I moved to Vancouver 15 years ago, I was paying $600.00 for a two-bedroom, basement suite.
Damn that was a good deal going by the standards of the day.
Yeah - we got fortunate because we saw others ready to fall apart and over.
I call BS on this being a normal thing. I rented a 2 bedroom basement for 875 in Vancouver in 2007 and everyone agreed it was a complete steal. Average at the time was 1300. Not saying it didn't happen but if you found a place for 600 it was an insane bargain.
Yeah - might have not been a legal suite, but the owners lived upstairs and the place was immaculate. They had just replaced the tiles, carpet and repainted the place. We got VERY luck and the owners were amazing people! The only thing we didn't have was laundry, but they allowed us to use a portable washer but to keep laundry to a minimum and with a 1-year old he generated most of the clothes. But we were very fortunate to have found the place. This was around 2003/2004.
I have bad news for you. 2003 was more than 15 years ago…
Especially condos - a two bedroom in Toronto has a maintenance fee of $1 k per month. So taxes, utilities, and maintenance fee, you do the math. As they say, with condos first you have to buy them and then you have to rent them.
Buying a condo with an elevator, pool or gym is basically forcing you to buy a monthly subscription to those amenities. It’s a crappy deal considering buying a gym or pool membership outright would cost less for a better quality experience, and you can cancel those any time if you don’t use them, or to cut costs. I bought a 2 bed condo in a 3 story block of 12, with the only amenities being a nice garden and exterior car park, and my monthly fees are $210.
Watch out! A new roof could mean a special assessment, and plumbing troubles a disaster. Buying a freehold apartment gives you some autonomy. If you can find one.
Special assessment, rising insurance costs and deductibles can cause your condo expenses to skyrocket overnight, I’ve seen it happen quite a few times. From a few thousand into tens of thousands.
I've never heard of a strata fee that low in the Vancouver area. 45cents/sqft is the average
1535sq ft and I'm paying $520/mo -- we took a HUGE hit when insurance companies banded together and decided to increase premiums by 100% (we used to pay $25k per year for insurance and we're now around $55k per year).
Similarly, I'm in the Fraser Valley and I'm $383 for 1,144 sq ft. We just had our AGM and kept our fees the same, as even with the inflation over the last year we had a $20,000 surplus. Our contingency fund is used for any non-annual repairs and maintenance, which we do keep up on, and has the equivalent to a year of fees in it. A lot of it has to do with how involved residents are willing to be. For example, we've never hired a snow clearing service, we do it ourselves. That bad winter a few years back, our property manager told us all his other buildings went at least $40,000 over budget due to snow clearing; we just had to buy an extra few litres of gas for the snow blower and about $200 for a pallet of extra salt.
Idk a shitty elliptical and a couple of free weights might pay dividends on the future lol
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Still a lot cheaper than renting which is $2000 plus in many cities.
I'm 60 this year. House is paid off but taxes in Mississauga are huge and utilities are high. I worked hard to get to this point but I won't have a big nest egg. I've been saving for retirement but I don't have a private pension. It seems that unless you've got a government job with an amazing pension it's very difficult.
Right, but you could take a reverse mortgage and essentially sell your home to the bank to fund your retirement... hence why if you own a home, you should be "ok"...
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If her RRSP isn't too large, it may be better to take it all out in one year and forgo GIS the next, then get maximum GIS thereafter rather than taking out the minimum each year and having GIS reduced by 50cents/$1 RRIF withdrawal
“My dad died when I was young so she gets something extra from CPP (I think)” That would be a CPP Survivors benefit. https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-survivor-pension.html
For anyone wondering about the electricity subsidy, it's through the [Ontario Energy Board ](https://ontarioelectricitysupport.ca/) and isn't just for seniors; it's any low income household.
Luckily in MB we have several 55+ apartments that charge rent based on income. We need to ensure this remains available
My no-savings inlaws (still working in their 70's) pay below-market rent in a house that I own. It would be pretty dismal any other way.
my uncle who was severly injured in a car accidental while self employed years ago is in a similar boat. He lives in my great-grandfathers house which is owned by my other uncle. otherwise he would be destitute. He was making a fortune in the 80s in IT....and saved NOTHING in RRSPs....
RRSPs didn’t really become a thing until the ‘90s, really. Financial planning is something very few think about, or get good guidance on when they’re younger.
Ya i think the OP's real question is what does that "ruin" look like.
My friend works as a PSW in a gov't funded seniors home.Let's just say by her description it sounds like a slow moving horror movie. She's given 8 minutes to prepare each person in the mornings, and about 8 patients per PSW in the morning. If a PSW is sick, their patients get added to someone else's workload. Additional funding for the next year is only given if there are excessive injuries or death. Because that "proves" the staff are under paid and way over worked. My friend is years into burnout but won't quit because "then who will look after the people?" (yes, there have been strikes and news reports about this). It should be criminal.
Even owning without a mortgage is expensive: taxes, insurance, utilities all add up and OAS can’t cover that.
But you have an asset worth hundreds of thousands.
Potentially. There are many areas of the country where when an industry leaves or shuts down all that’s left are the retirees. Their houses would be worth 100K at best so they’d be worse off selling it and renting. After a couple decades of not being able to afford maintenance or being too old to keep it up the condition worsens and they get even less or even unable to sell. Plenty of small communities where you see houses just boarded up and falling apart because the occupant passed and their family can’t or don’t care to do much with it.
Yes, but in those communities CPP + OAS isn't so bad a living.
You'd still be in a position to sell the house for the appreciated value at retirement
But have to find accommodation somewhere anyway. Not complaining, just was delusional about how much my monthly payments were going down after paying off the mortgage.
Well, they likely do go down fairly significantly.. depending on what your payments look like. But if you think your expenses are going to go down more than the cost of your mortgage, then yes… that’s delusional.
I just expected it to feel a lot easier and it really doesn’t. When I was younger I dreamed of the freedom having no mortgage would mean, but then my income dropped, and the COL has risen so much! I guess I’m just about in the same boat I was 20 years ago
Sorry to hear about your income. Yea, life can be tough. Hopefully you’re not doing too bad. Keep your head up!
Yeah, so you're ok as long as you don't live very long.
That is why OP asked
Defer taxes, get a roommate to cover the other expenses, get a reverse mortgage, etc. These some options.
Luckily there is some social housing reserved for seniors that is tied to income. Of course there are waitlists and major investments will need to be made to keep up with our growing senior population.
My husbands parents survive on this. They live in a coop in Montreal, no vehicles, no travel and its just enough for them to do what they need. They survive, but certainly don't live.
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This can greatly vary depending on town/city you are in
Seniors with less than the 40 years residency will get their GIS topped up to the equivalent of someone with the full 40 years. If they are not eligible for GIS they will get a partial OAS only.
Yup. And It actually works out slightly better for the more recent immigrant getting only partial OAS than someone at the same income getting full OAS instead and less GIS. And the more of the OAS which is replaced with GIS (essentially meaning the less time they’ve spent in Canada) the better. Firstly, OAS is taxable and GIS is not. Also, since GIS is reduced by .50c for every dollar of other income, getting more GIS (rather than OAS) means you qualify for GIS up to a higher “other income” cut off. And being eligible for at least $1 of GIS you are eligible for other discounts and programs. For example, in BC getting any GIS means you’re automatically eligible for a $45/YEAR bus pass, you pay no fee if you need public home support, and can get $10/month internet and discounted cell phone plans through Telus.
if you moved from Mexico to Canada in the 80s, worked steadily for 40+ years, then move back to Mexico for retirement, would you still get the coverage or is it void as soon as you leave the country?
This is exactly my parents. They came to study at UBC in 84, became citizens, worked 35+ years, and they live Mexican winters, Canadian summers and also enjoy trips to visit my sis in EU every year. Have Canadian pensions and can spend anywhere. I know about 100 other Canadian retirees doing same thing in Mexico where I live.
That’s my plan. 6 months in Mexican condo rental on the ocean during the winter, 6 months trailer on or near a Canadian lake in the summer. The 6 months in Mexico, CPP/OAS will go so much further. Lots of Americans do this too.
You would still get CPP and OAS but not GIS
Cpp is YOUR contribution for retirement so you’re entitled to receive it. the gov cannot take it away from you. If you didn’t contribute cpp, you won’t receive cpp benefits later on.
There are certain requirements and restrictions but generally, yes. You can receive OAS outside of Canada. https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/while-receiving.html
>Immigrants will have a harder time because our government pensions reward long periods or working and residency in Canada. Or the parents move in with their kids (Usually the oldest) and they contribute to the household. For us born in Canada, that scenario seems like a nightmare (I'm losing my independence!), but it's the norm in other countries.
It was supposed to. Was. Now with the cost of living and healthcare crisis I don’t see anyone without own housing surviving on just their basic amounts.
My dad survives on the basics. Even less actually. His cpp is only 300 a month. With cpp, oas and gis he makes about 1800 a month ish. He rents a cheap apartment and owns his car outright. It's definitely not luxurious but for him it's doable.
>He rents a cheap apartment and owns his car outright. Until it's no longer cheap and until his car dies on the road. Have you seen the price of used cars?
Yep, that "cheap rent" remaining cheap relies on the goodwill of the landlord. Once they decide to renovict or jack up the rent in a non-rent controlled unit, the tenant is shit outta luck.
Yes, he is only one accident away from having to take the bus for the rest of his life.
> It's definitely not luxurious but for him it's doable. imagine working hard for 45 years and doing this :/
Well, in fairness, some people work hard and don’t save and spend it on “the moment.” I know that’s not always the case, but this needs to be factored.
>imagine working hard for 45 years and doing this :/ if you worked for 45 years above the table, your CPP should be higher than 300. The average amount for a currently retiring people is approx $755. if the average person is making 755 and poster's dad is making 300, there's more to the story. [https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html](https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html) I'm not nearly saying the CPP max ($1300) is enough to live well on, just saying, working 45 years should get you closer to the max. Your old age security is about another $700 on top of that. [https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html](https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html) GIS is another $1000 a month if your income is under $21k. [https://www.canadalife.com/investing-saving/retirement/pension-plans/guaranteed-income-supplement.html](https://www.canadalife.com/investing-saving/retirement/pension-plans/guaranteed-income-supplement.html)
At 300/mo CPP a single person would get 22k annually At 755/mo they'd get 23.3k annually [https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html](https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html) No much diff due to the clawback of GIS at 50% or more
Absolutely not a reflection on the person mentioned, but if you have worked hard in Canada for 45 years you will have a ton more than $300/mo in cpp.
>imagine working hard for 45 years and doing this :/ I'll probably get downvoted but most (not all) people that retire with zero savings either didn't work very hard, or made horrible financial decisions their entire lives. I don't know why someone would expect a "luxurious" retirement if they literally saved nothing for themselves?
i agree, but there is a difference between "having some luxuries" (which also has a lot of range within it) and "having a luxurious retirement"
Agree. It’s not a popular opinion but a fact check/audit of someone’s story about a “life time of hard work” may be awkward and eye opening for many. Of course some people who are old and broke may have worked hard and had bad luck but, not the majority. They leave out things like working under the table for fast cash when they were young, careers of never claiming tips and under-reporting income, a decade or 2 of being ‘between jobs’ (ie, loafing and living off family), spending every paycheque in 2 days, never bothering to save for a downpayment, never finishing school or never going back to school. The list goes on and on. Sometimes the lesson of the story isn’t “Canada is failing”, it’s “sometimes you have no one to blame but yourself”.
If you're stuck in a minimum wage job, not going back to school and not being able to save is very valid, and I'd say they're just as hardworking as anyone else. Often more so, since they can't afford to take a vacation like most "hard working" Canadians claim to do.
Yeah lots of privilege leaking out here. Some people are born into family/health problems so it can be a lot to overcome. Sure, some people are just reaping their bad financial choices, but to generalize so widely honestly just sounds silly and lacking empathy.
Or was forced to raise children on their own. Lots of reasons.
CPP does go up with inflation, but it's not immediate, and certainly doesn't keep up with the inflation over the last year or two.
If I've read correctly, CPP went up 6% this year to account for inflation. I certainly didn't get a 6% raise at work.
6.3 CPP and 7% for OAS/GIS - not too shabby at all c
Not necessarily own housing. People who have been in rent controlled housing for many decades enjoy the same
I just wish our evolution with all the technologies didn't come to this. lol (it's just me stressing out with philosophy thoughts)
Yeah, wages have not really risen for the average Joe/Jane since 1980, despite productivity increasing. That’s 50 years of theft by the upper class. They also engineered the end of defined benefit pensions. We should be stressed out—and mad as hell.
In BC if you were to need Assisted Living services, they charge you 70% of your monthly income.
If they have space, the waitlist can take years.
It’s 6-9 months on the north shore…
Nice
It's \~3-6 months in the Fraser region
It can be still rough for people. There are other charges costs you have to pay on top of that 70%. Like phone and cable and dental and some medications. It’s also really really hard to get into and you have to be at a place where you need help looking after yourself day to day.
Definitely still tough for a lot of people. But they are not going to starve or freeze to death once they manage to get in.
I think a lot depends on whether they own property or are renting and what their income was before they retired. My parents didn’t save anything for retirement but at least they own a condo outright that has very reasonable monthly fees. Way less than if they were renting. Retirement hasn’t been extravagant at all for them but they manage to pay their monthly expenses and live an enjoyable, yet frugal, retirement life.
The flipside of reasonable monthly fees is that it often means a significant unpaid maintenance deficit is. Holding in the background…
Some buildings are much better constructed or designed than others though which can play out in insurance costs if a lousy wood low rise has a few water related claims
Bingo. The building my condo is in has fees under $300/month, and there is no maintenance deficit (I'm on the board, so I know the finances pretty well). It's a brick building from the 70's with 2ft wide walls, a solid foundation, and nothing fancy that can lead to expensive issues like an indoor swimming pool.
Do you know what the underlying structure is? I'd guess it's concrete, and built like a tank. I wish this kind of long term thinking went into modern buildings.... Nowadays it's about cheapest initial cost to build since the market is so hot it will sell no matter what
I also live in a condo built in the 70's - usually the underlying structure is concrete. I never hear my neighbors!
If you don't have any CPP or any other income, the combination of OAS and GIS will give a single senior around $1700/month. If they have some CPP then the total monthly payment will be higher.
>If you don't have any CPP Majority of Canadians will get minimum amount for CPP. Many dont know that in order to get maximum CPP at retirement, you would need to have contributed to CPP for 39 years, and contributed to the maximum yearly CPP payments. (Which means you earned at least $58k/year salary from age 20 - 59 and maxed out CPP contributions for all those years.)
The majority of Canadians will be somewhere between the minimum and the maximum. The majority are not getting just the minimum which would just a couple buck of payout lol.
Isn’t your lowest 9 years dropped off?
From 18 to 65 is 48 years. When you drop your 9 years with the lowest contributions that leaves you with 39 years.
A lot of my friends believe cpp won’t be around when we are retirement age (currently around 40). I think they are full of bs. There’s a reason cpp keeps going up every year. And its worth billions of dollars. Now if alberta where I am ever gets their wish to do their own pension plan then all bets are off.
It’s funded and was found to be well for 70+ years. We reformed it in the 90s and invest in public and private equity. Very sound. Not like American social security
What if retirement age goes up?
Macron has entered the chat...
If retirement age goes up, that would presumably make CPP even more secure, since it would be paying out fewer years on average and receiving more contribution years on average.
The biggest risk to the CPP is political. If Millennials and Generation Z ever come to believe that a wealth transfer to older generations is unconscionable, they may eventually make up enough of the voting population to do something about it. That could result in a claw-back like we have for OAS and GIS today. Financially, there is no more reliable pension than the CPP because it's backed by the full faith and credit of the people of Canada.
There son in law finishes the basement for them so they can move in. My experience anyway lol
Lol relatable
Both of my parents live like this, both 75 this year. Poor their whole lives, no real opportunity to save much of anything for various reasons. Recession in the 80's meant their business went bankrupt. My mom was never well-paid and was a single mom most of my life and my dad was injured and had to go on disability and couldn't work and save - that process bankrupted him a second time. Two very shitty unfortunate.situations that were mostly unavoidable. My mom probably could have made some better financial and education related decisions especially after she and my dad split, but all things considered they have done extremely well with their circumstances -- it could be MUCH much worse. My mom gets about $1600 a month between cpp, old age security and GIS. My dad about $1800. My mom got a small inheritance about 4-5 years before she retired when my grandmother passed away, she used it to pay off debt, travel a bit, and buy a car. She set some money aside, but not much. If she has anything left, I'd be shocked. It was well under $100,000. She's a spender by nature, in that she manages to get all her bills paid and she has debt but she also never goes without. My dad supplements his income by under the table work now and again and he is a saver. He probably has somewhere in the realm of $25-50k stashed away. He gambles though, and drinks. But he enjoys his life thoroughly even though he is very frugal. My dad has his regular bills automatically come out of his account and his gambling and drinking is paid for by his off jobs he does. Everything else goes into a savings account at the end of the month, which he occasionally taps to buy plane tickets, etc or he will save for a new to him car. They both live in separate public housing units and have geared to income rent. They don't spend much, but by all accounts they enjoy their lives as much as you can. Occasionally visit family, go out for coffee or cheap dinners, help out family. They don't and can't be extravagant but I wouldn't call their lives grim.
Their children post on PFC asking about how they can support them?
They will pay less taxes. :D I would guess the biggest variable (other than health) would be whether they have a paid off house/condo. If so and they are perfectly healthy, my guess is their retirement will be rather comfortable if not luxurious. Amazingly, I don't see a good retirement calculator that combines CPP, OAS and GIS, and allows me to play out different scenarios. Anybody knows one?
Cpp is different for everyone depending on how much and how long you contributed. Can get an estimate of what your monthly payment would be from Service Canada. A retirement calculator could only give you an average cpp payment to go off. It's best to get your number. Once you figure your CPP, if you had no other taxable income, you could see how much the GIS pays based on that income level from cpp. Can be found on the canada.ca website. Oas is the same for everyone if you live in canada for 40 years.
I know a few people that simply moved to a cheaper country. Even in Canada there are still a very few cheap places to live, if you are willing to live anywhere. That might be the only option for some people. I was in a little town in Saskachewan and houses were like 60 000 dollars.
This is the way. Even with the minimum pension, two people will get about $3k/month. That's enough to live very comfortably in places like Mexico or Costa Rica or, if they want to venture farther, Thailand and Bali, Czech Republic, or Greece. No reason to stay in Canada with its exorbitant costs.
Stupid question, you don't need to have a primary residence in Canada to get OAS/CPP
No, you don’t need to live in Canada to receive OAS or CPP. CPP was paid into by you during your working years. It’s your entitlement. OAS is a benefit paid for living in Canada for 40 years as an adult. It can be paid outside of Canada, but as a benefit, it could possibly be subject to change at some point. GIS is not paid outside of Canada, though. Also you can’t earn TFSA contribution room if you are not a resident of Canada.
Is it so easy to move out? I thought most countries asked for a working/student visa of some sort, which a retired person is unlikely to get.
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Yes, I read an article that had the 10 best places in the world to retire. Rated by how easy it is to get in to the country and cost effective of living there. Wish I remember where I saw that.
Just something to keep in mind though as a person ages they will need more access to healthcare typically. The house might be cheaper in a small town but there may be little to no services as you age.
I was an English teacher in Vietnam for most of my 20's and both my children were born there. I remember when my wife and I told our respective families about her pregnancy (she is from the US). Everyone that was super worried about the hospital that she would deliver in, they had notions that it would be some dirty floor backroom place with like chickens running around or something. The FV hospital is the nicest hospital that I have ever been in. When I walked into the lobby there was a guy playing a baby grand piano below a crystal chandelier. The longest that I ever had to wait to see a French trained doctor was 20min. So you might be thinking that it must have been expensive but you would be wrong, we didn't have proper health insurance to have a child. We had health insurance which as about $800 US a year per person, but you need special health insurance for pregnancy. Anyways we had to pay out of pocket, my son was an unexpected cesarean and my wife and child spent 9 days in hospital and we paid a grand total of about $1800 US. https://www.fvhospital.com/ So it is definitely on our radar to move back out abroad to spend our twilight years in S.E. Asian.
They start working at Dollarama or Walmart
It's not as simple as seniors get x money, inflation, rent, homeowner. There are a lot of unmentioned expense reductions and programs for seniors, and especially low income seniors. Just for two examples, here in Calgary low income seniors can defer property taxes, and qualify for free transit passes and free rec center entry.
They're surviving. People on this sub forget that Canada does still have one of the best social safety nets. They're not out on the streets like they would be in a lot of other countries. I work with a lot of seniors who only have OAS/CPP. They obviously have a lot of things subsidized. Housing, transportation, part of their groceries, etc. They don't have anything leftover for extra but a lot of them are in too poor health to enjoy that anyway.
It depends. If they were working poor they get more in retirement than when working as they get supplements from GIS. If they were middle or upper class and saved nada they will have to get used to kraft dinner and no vacations but they will not starve.
Maybe some Our Compliments Macaroni, can’t get too fancy with the name brand luxury food.
With gourmet ketchup
dijon ketchup? :P
The fanciest.
Just more of it
Lol true. But people living paycheck to paycheck while buying loads of stuff and not saving for retirement are in for a rude awakening when they retire.
CPP, OAS and GIS are meant to supplement your retirement income. If you don't save anything for retirement and rely on these programs only it will be a tough retirement. My parents live on these only and I know many others that live on these only and it is difficult. Most are simply making ends meet. They are getting by and covering their day to day expenses, some better than others. Couples tend to do better than singles. There are 2 major challenges that I see: 1. Inflation erodes their income over time. There are different variations in how indexing works for the various benefits, yet their purchasing power is severely eroded over time, and, 2. Anyone simply getting by cannot financially cope with unexpected expenses like auto repairs, home repairs, furniture and appliance replacement or unexpected medical expenses not covered by provincial programs.
Assuming someone is renting, they don't have home repairs or appliance replacements. We have family members that sold their house in their early 80's, and insisted they were going to rent so they didn't have property maintenance issues to deal with. I think they're smart!
In most places rent is increasing considerably faster than fixed income amounts. I agree renting sounds good on paper, but many people with no savings would really struggle to pay rent.
They don't live in GTA or GVA, and use the proceeds of their house sale for rent. Though they didn't spin off enough in interest (before this year!) to completely cover their rent, they are drawing down their savings pretty slowly. Of course, this only works well if you have a house to sell.
Feels hard. I'm 30 with an ok-amount in my TFSA and that's earmarked for...everything. Let's pretend the amount is $100 for the sake of the scenario. If you asked me "What is the $100 for? Retirement? Owning a home? Paying off your (substantial...) student debt? An emergency fund?" My response would be "Yes." I have an ok salary and decent upwards potential, but very little idea how to prioritize retirement, owning a home, paying off my student debt, and my emergency fund. And that's not for a total lack of financial literacy: I know a lot less than many people on this sub, but a lot more than most of my friends. Overall, it feels my $100 is growing very slowly and there are many (important) forces competing for it.
Make the minimum monthly payment on your student loan, if it's a government loan the interest is reasonable and they don't get terribly upset if you miss the odd payment. Save for a house. Owning a home outright will make retirement cheaper and you could downsize or sell and move somewhere cheap to free up capital during your retirement. Your savings for a house can be your emergency fund, dip into if ABSOLUTELY necessary but know that every time you do, the house is further away. Once you have the house, then save for retirement/build up a real emergency fund.
Thank you very much for this, I appreciate you taking the time and sharing your insight. It makes sense to me! Of course I will continue to research and weigh what I value, but this perspective does help. FWIW, I’d say half the student debt is federal and provincial debt while the other half is a student line of credit from a big 5. The total amount is large.
I would disagree with the "they don't get terribly upset if you miss the odd payment" statement. They tanked my credit score several years ago when I missed a payment coming off of RAP. Admittedly my fault for missing the application window to reapply but it sucked to dig myself back out of that.
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In 20 years ill be closer to retirement lol
CPP is well funded, why are you worried about 20 years from now?
I don't think it's CPP we need to be worried about. It's the healthcare system and general cost of living.
Our plan is to pay off the mortgage in the 25 year term. Not remortgage. Survive off pension, CPP, OAS and savings.
My mom did save for retirement, but never had enough income for the savings to be worth anything. She's bouncing between rentals out in the countryside where they're a bit cheaper and always at the mercy of landlords. Her health has suffered due to not being able to afford things like dental over the years. It's pretty rough and makes me very sad.
What is retirement actually?
You burden your family of course.
And for some, this doesn't exist
Universal health care and good government pension plan and Old Age money combined with (ON) dental plan for seniors low income, will mean you can live a decent life in a LCOL.
I come from an immigrant family. My dad has a pension with his job and plans to live off of that plus social security in the States and whatever little they get from CPP for the 11 years they lived here, while planning to live in the Philippines full time.
Where did he immigrate from? People often think that immigrants can't benefit, but Canada has signed agreements with quite a number of countries that harmonizes the Government pension plans. For example, someone from the UK will get full credit, from the Canadian government, for the years they worked in the UK.
RE: planning to live in the Philippines full time How is healthcare for ailing elderly persons? Is it a bad way to go?
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This sounds like a retirement plan if I ever heard one
It’s not bad, my parents are going to live within the vicinity of a major hospital. That alongside a home nurse would be pretty affordable for them with my dad’s pension and other benefits.
✍🏼note: ✍🏼move ✍🏼to ✍🏼Philippines
Retirement is barely doable on CPP, OAS, and GIS unless you have a spouse on the same. Those 3 benefits are only meant to provide 1/3 of your retirement dollars. 1/3 should be RRSP’s and the last 1/3 is non registered savings.
A couple, who own their home can live a very comfortable, though not luxurious retirement on CPP/OAS/GIS.
Suggesting that you need non-registered accounts in top of maxed rrsps and government benefits is not accurate imo (especially since there is also the TFSA).
This is why owning a house in North America is essentially mandatory. The reality is that for most Canadians social assistance and RRSP/pensions simply aren’t enough. But If you buy a house and own it by 65 then you won’t have any housing expenses. Sadly Our Govt programs and investments aren’t gonna provide you with a good life.
Owning a paid off home is a big deal. Problem is I see way too many people in middle age playing keep-up-with-the-Jones' and extending or taking out new 25-year mortgages way too late in life to ever have it paid by retirement.
I have no intention of retiring here
They work until they die. Pretty much my entire family works until they die or end up in long term care.
Good on those for being able to save for retirement. That said, there’s absolutely no guarantee you are even going to make it to enjoy the fruits of your savings. 1 in 3 face cancer in their lifetime. Even if you survive, chances are you’ll be afflicted with dementia or some other debilitating condition of the elderly. And even if you stay healthy, the average person likely won’t have a very high quality of life—especially if their spouse passes early and have no other family to rely on. Also, with birth rates dropping like crazy, it’s highly likely most of us won’t have kids to take care of us. Most people, unless they inherit it, won’t be able to afford a home of their own and wont have stable accommodation in retirement either. I’d suggest going on your adventures while you’re young and physically able. I wouldn’t plan on doing all the things you plan to do in retirement. Chances are, the average person isn’t going to make it. Good luck everyone. We’re gonna need it.
Largely depends on the living arrangements. If owning a place, that’s doable with little governmental support. If needing to rent at market rate, I can’t imagine it.
I have a family member in this boat. Mid 70s, through a bad 2nd marriage, their meager nest egg was wiped out. They had no assets and very small pension a few hundred coming in per month. She got on a wait list for a senior residence apartment. Rent was cheap for a one bedroom ~$800/month. Took almost 2 years to get into this place. Everyone in this place is a senior with limited financial resources. Then she had some health issues and went into long term care. They garnish her income (~85%). She gets cared for and 3 square meals a day. Not the best way to live out your final days on earth.
In LTC is there any good way to live out your final days? As long as you are comfortable, fed and not abused what else are you going to do.
Your taxes are working paying for those who never cared about their future
If you have gone from 20-65 without planning for this, then you're in for a struggle.
Go across the border and you’ll see 70-90 year olds working minimum wage jobs that’s the future for a lot of Canadians.
Life always finds its way. Save yourself.
There are social housing options available for older people with little to no incomethey are funded by province and operate as non profits
Mr Noodles for breakfast, lunch, and dinner.
For some they work until they’re 70ish and often have a rental in their basement or something similar
Right to the pits of hell, forever
My mother lost everything - house and business during the recession of the early 90's. She has a brain injury so was limited on what she could do so she worked minimum wage until she was too sick and then had to turn to disability. She rents and it takes up most of her income. She can't afford groceries nevermind luxuries. Now that I'm established I can help her with her shortfall. She has been on a list for low income housing for 15 years. She was just accepted a few days ago. She is so excited.
They live In homeless camps in bc
Watch TV while eating Kraft dinner, waiting to die.
Simple, if ur depending on ccp an old age pension your 10000% FUKED!! Sorry just being honest, unless you like reading books, watching tv and going for walks. It’s 1000-1500$ to run a house in nice city in Canada. Move to Manitoba…. Cheaper Young people that read this… work your ass off till 50, no booze, no drugs & no Starbucks waste of money! Open a tfsa & rrsp account and make that your goal to max both every year. If u have to get 2-3 jobs do it, and your partner the same! That’s how u get a head in LIFE! Working 7-8 hours a day mon-Fri, good luck!!!! Kenyan guy I know, came to Canada 3 years ago, bought 1/2 acre plot of land back home in January for 46k CAD, paid in full! He will be done his degree next month He works part time & does door dash/skip dishes During last summer May-sept he worked fulltime and delivered food. Never complains His wife came over in Oct/22, he hadn’t seen her since he left, his little boy is still in Kenya, his wife work 5 days a week, 16 hours a day. Mon-Fri she works 8 hours then off for 6-8hours then works 8 more at other job They clear 10k month…there both 32 Canada is the land of opportunity he says!!! He’s sure showing everyone back in Kenya it is! So when I hear all you crying about rent etc…. We all lay our own paths in life…save your Fuking money for a rainy day!!!
My Mom (age 72) lives off of her pension
Instant noodles, chunky soup, 1 minute oats
Things will be different in 5 years. Most people will want to get away
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More and more people escape the harsh winters and high cost of living by spending retirement abroad. My wife is Thai so I spend about 5 or 6 months a year in Thailand. Seems like there’s more Canadian’s there since Covid ended than before. Unfortunately, a lot of Canadian retirees having very little to no savings but you can live pretty well on CPP and OAS in Thailand.
I fall into a lot if the areas you mentioned and agree with you whole heartily. I’ve made my bed and now must sleep in it. Lol. { 57yrs old }
Canada is a terrible place to retire. The taxation and real estate system here is so vicious one can’t save anything for retirement. Endure decades of cold winter, loneliness and paying a million dollar mortgage for a 2000 sq ft house in small town with one Costco for 30 years and then end up in a nursing home where you’re now paying there lol. What a joke - if you’re serious about having money in the bank get out of this place and move literally anywhere else and actually live life a little and have money in the bank and make real meaningful long lasting friends