For a host of reasons, the majority of Baby Boomers failed to plan adequately for their retirement. Just to make ends meet, many senior citizens are now working well past 65. Across Canada, the median senior exists on far less than $30,000 a year.
Its even more troubling that the next generation of Ontarians cant get past today’s financial obligations to set a little aside for a secure tomorrow. They’re spending their so-called extra cash paying off student loans or paying for child care or looking after their parents. There simply is no extra money for a nest egg.
Experts say you will need 50 to 70 per cent of your pre-retirement income to maintain your standard of living in retirement ; but many Ontarians cant or wont meet this target. As a result, they’ll have to keep working well into their so-called golden years.
The bigger cause for concern, though, is were sticking our collective heads in the sand and pretending it isn’t happening. Employers and workers must be encouraged to take responsibility for their financial futures.
This article was published by Our Windsor on May 7th, 2014. To see this article and other related articles on their website, click here.
Government and business agree fixing Ontario’s pension problem is a priority. But to do that, the system has to change.
Susan Eng of the Canadian Association of Retired Persons (CARP) is calling on Ontario to make workplace pension plans mandatory. We couldn’t agree more.
It also should be mandatory for working Ontarians aged 16 and older to have a pension plan.
The business community overwhelmingly favours the introduction of PRPPs to Ontario workplaces and we think that’s the right way to go.
Employers and employees contribute to a pooled retirement plan and its managed by independent financial professionals.
Those PRPPs need to be portable. They should follow a working Ontarian from job to job.
And Ontarians need to start asking prospective employers about their pension plans and making it a high priority when they’re considering job offers: Companies would then need to offer attractive pension plans to attract the brightest, most talented young people.
Small business owners are concerned a mandatory pension responsibility will prevent them from growing and creating jobs. And we hear them. Any new legislation should allow for a phase-in period of five years for businesses with three or fewer employees.
We need our young people to buy into the idea that we all need to care about retirement planning, much the way we all recycle for the good of the planet. Changing the culture starts with education: Schools need to start teaching financial literacy in Grade 7, before young people take on their first part-time jobs.
Financial planning courses should be incorporated into Ontario’s high school curriculum and successful completion of those courses should be required for a diploma.
Finally, its time the provincial government steps up to protect the pensions of hard-working Ontarians. Most Ontario employers contribute to a fund that insures the first $1,000 of an employees monthly pension in case the company goes bankrupt. That’s something, but its not good enough.
They say the only sure things are death and taxes. But Ontarians should be able to count on a healthy pension after a lifetime of working hard and contributing to society.
BOTTOM LINE: Young people have to buy into idea of saving.