Think-tank report urges stricter Old Age Security (OAS) eligibility
“It’s the generations that come after the Baby Boomers that should be concerned, and consider the potential that government retirement programs will be slashed, or may not be there at all when they grow old.”
“The Fraser Institute suggests the government help address this concern by boosting the limits for retirement savings programs, such as Registered Retirement Savings Plans (RRSPs) and Tax Free Savings Accounts (TFSAs).”
“Simply put, some portion of the savings [from proposed OAS changes] could be used to increase the limits for deferred tax accounts like RRSPs and registered pensions,” the report says. “Additionally, the limit for tax-free savings accounts, which are not tax deferred, could also be increased to provide Canadians with greater choices regarding the mix of their savings.”
As I’ve stated in the past, if you are lower-income (below $40,000 per year), you should maximize the use of TFSA’s before purchasing RRSP’s. Please consider: Low-income seniors should be wary of the GIS phaseout.
I am also happy that the Fraser Institute states that CPP changes could stunt RRSP savings: report.
“A CIBC survey released in 2012, shows about 25 per cent of Canadians between age 45 to 54 believed government payments would be a key source of income. Another 25 per cent said they are counting on private pensions as their primary source of income in retirement, while 30 per cent said they planned to rely primarily on their own savings. The same survey also shows about two-thirds of Canadians aged 45 to 54 are already planning on working past age 65. Of those, 43 per cent said they plan to work part-time, while 22 per cent are considering consulting.”
Please Consider: Canadians preparing for life without retirement
“Nearly one in five Canadian workers expect that they’ll never be able to retire fully.”