Boomertirement -- is this really a "crisis?"

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Benchwarmer
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Re: Boomertirement -- is this really a "crisis?"

Post by Benchwarmer »

Thanks for the interesting article.
There are gaps in our health care system that will cost you out-of-pocket as a senior
What are examples of these gaps?
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Re: Boomertirement -- is this really a "crisis?"

Post by brucecohen »

Benchwarmer wrote:
There are gaps in our health care system that will cost you out-of-pocket as a senior
What are examples of these gaps?
Physiotherapy. Since November I've racked up $580 in fees for treating a shoulder injury, though my extended health insurance covered 80% of that. OHIP covered two ultrasounds that detailed the problem but not the physiotherapy to treat it.

AFAIK, OHIP no longer covers eye exams by optometrists unless there is an active medical problem.
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Re: Boomertirement -- is this really a "crisis?"

Post by SQRT »

BrianWeatherdonCFP wrote:Further to the theme of Boomertirement was a post today by Donna Stevenson of Boomer Match To Business (her website is mentioned in the post ...worth seeing). I was deeply impressed with her experience and thoughtful description of how we are so different from the "quiet" retiring generation than preceded us ....in that Boomers want to re-invest, re-devise, re-generate their retirement. And here's what she said, in words far better than I could offer myself.... http://guaranteedincome4life.ca/resources/retire-going/

In my terms, it's all about choosing the Life you want, and ensuring wealth, family matters, and ongoing contribution (work or whatever) fall into place with this for us.

Cheers and good discussion everyone! :D
BW
Good point. When we were planning for our retirement, we started with a clean piece of paper. Thought we might buy a winter place in Australia or New Zealand. This turned out to be impractical but we did move to Canmore Alberta instead. Great outdoors activities and better tax regime. A couple of years later we decided we needed a "warm" house so bought a place in Arizona. Our retirement has turned into a very pleasant rotation between our places in Alberta, Arizona, and Ontario. Obviously not for everyone but great for us, at least for now. Our motto has become "Burn Calories". Unfortunately, this often requires a us to burn a fair bit of money too. Having a great retirement so far (7 1/2 years)
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Re: Boomertirement -- is this really a "crisis?"

Post by CROCKD »

Bruce: My annual eye exam is covered by OHIP. As far as I know a once per year exam is covered for those over 65 and under 19.
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Re: Boomertirement -- is this really a "crisis?"

Post by Spudd »

brucecohen wrote:
Benchwarmer wrote:
There are gaps in our health care system that will cost you out-of-pocket as a senior
What are examples of these gaps?
Physiotherapy. Since November I've racked up $580 in fees for treating a shoulder injury, though my extended health insurance covered 80% of that. OHIP covered two ultrasounds that detailed the problem but not the physiotherapy to treat it.
Actually for 65+ physio should be covered as long as it's prescribed by a doctor or the CCAC. My mom is 65 and gets free physio - the therapist even comes directly to her apartment! I googled and found this:
http://www.carp.ca/2013/08/23/further-c ... -programs/

For early retirees, I agree, physio & eye exams, as well as glasses are gaps that OHIP would not cover.
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Re: Boomertirement -- is this really a "crisis?"

Post by CROCKD »

Spudd wrote:Actually for 65+ physio should be covered as long as it's prescribed by a doctor
Correct - except that first one must find a physio clinic that accepts OHIP. A lot of physio practices do not including one run by a family friend adjacent to NYGH. When I was referred by my GP for treatment of a rotator cuff problem and not having private health insurance, I found a clinic which did. There was an initial assessment fee of $70 not covered by OHIP.
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Re: Boomertirement -- is this really a "crisis?"

Post by brucecohen »

CROCKD wrote:Bruce: My annual eye exam is covered by OHIP. As far as I know a once per year exam is covered for those over 65 and under 19.
Do you go to an ophthalmologist or an optometrist? My checkups by the ophthalmologist are covered. I was told that those by my optometrist aren't.
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Re: Boomertirement -- is this really a "crisis?"

Post by CROCKD »

An optometrist. IRIS franchise.
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Re: Boomertirement -- is this really a "crisis?"

Post by ghariton »

Worried about funding retirement? An inheritance will likely help you out
A recent Bank of Montreal survey found that 34% of respondents are relying on winning the lottery to fund their retirement. In the same survey, 40% said they are counting on an inheritance to bail them out. Almost everyone buys a ticket now and then but how many million-dollar winners do you know personally? Is an inheritance dream equally improbable? One often-quoted study in 2006 asserted that the median amount we can expect to inherit is $57,000, not really enough to change anyone’s life.

A new analysis of data from Statistics Canada, however, paints a much brighter picture: Closer to 50% of households can expect to inherit a significant amount and that the average amount they will inherit is over a quarter of a million dollars.

<snip>

The fact that half of us stand to inherit a significant amount says something else. We can worry less about outliving our savings given that our parents didn’t come close to doing so (and yes, there will be exceptions).

The fact that so many seniors are leaving behind significant assets suggests they spent less than they could have and there is a very good chance we will do the same. That may not seem obvious when we’re 60 and saddled with the expenses of the sandwich generation but it will become increasingly apparent when we move into our 70s and 80s.
I was particularly intrigued by this bit:
the net worth of seniors has nearly doubled since 1999 in spite of a perfect storm in 2001-2002, a financial crisis in 2008-2009, and the last 6 years in which risk-free assets have earned almost no interest.
How did that happen?

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Re: Boomertirement -- is this really a "crisis?"

Post by parvus »

Define net worth. :wink:
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Re: Boomertirement -- is this really a "crisis?"

Post by SQRT »

ghariton wrote:[url


the net worth of seniors has nearly doubled since 1999 in spite of a perfect storm in 2001-2002, a financial crisis in 2008-2009, and the last 6 years in which risk-free assets have earned almost no interest.
How did that happen?

George
Real estate? More savings? With all the scary bank surveys, I'm not surprised people close to retirement are saving more. It wouldn't take that much to double net worth over 15 years?
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Re: Boomertirement -- is this really a "crisis?"

Post by Flights of Fancy »

kombat wrote:I'd like to see more research/discussion on how the reduction of DB pensions will affect income disparity amongst tomorrow's seniors. That is, we currently have a cohort of seniors and Boomers who will be largely relying on a DB pension for their retirement income. Once they pass, that pension stops, and there is no "lump-sum" value to be passed on to heirs. The only inheritance is whatever other assets the decedant had remaining. Thus, Gen-X-ers stand to inherit modest estates. Those who didn't inherit anything weren't widely separated from those who did. Everyone is on a relatively level playing field when it comes to inheritances.

However, current generations have DC pensions rather than DB, which means that when they pass, there is the potential for a much larger estate. Those with parents who socked away for retirement stand to inherit significantly bigger estates, which (in my opinion) should manifest as a widening divide between the "haves" and "have nots", at least as it pertains to inheritances. Moreover, with today's generations having fewer kids, those larger estates will be divided amongst fewer siblings, increasing their stake even more.

I'm curious if, in another generation or so, we'll see a cohort with retirement homes filled with Gen-Y-ers and Millennials who inherited nothing or very little, and their only-child peers living the high life on large inheritances courtesy of parents who didn't have DB pensions but had the foresight to save for their own retirement.
Coming to this so late but this argument rests on a number of simplifying assumptions which, I don't think, stand up to reality - namely that but for their DB pensions, people would save handsome sums on their own (in DC pensions or RRSPs). I think every evidence points in a different direction.
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Re: Boomertirement -- is this really a "crisis?"

Post by brucecohen »

ghariton wrote: How did that happen?
I read the linked article only very quickly, but I don't buy the notion that half of boomers are in for significant inheritances. Because Canadian wealth is pretty highly concentrated, I don't think you can view seniors' wealth in aggregate. For example, Jimmy Pattison and Galen Weston each represent a huge chunk of the wealth attributed to Canadian seniors. I'd be more interested in median wealth and in a segmentation that excludes personal use real estate.

As for growth of seniors' net worth, consider that many seniors still own and live in homes they purchased 40-60 years ago. A very modest Scarborough bungalow is now a million dollar property. Also, ISTM that many seniors own cottages, at least in Ontario, and cottage values have skyrocketed, maybe even more so than city homes.
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Re: Boomertirement -- is this really a "crisis?"

Post by Flaccidsteele »

The data can be found in the 2012 StatsCan Survey of Financial Security (SFS) at http://www23.statcan.gc.ca/imdb/p2SV.pl ... &SDDS=2620

It's all median data so readers can rest easy that Jimmy Pattison and Galen Weston won't skew the data too badly. :wink:

Readers can screen the data at http://www5.statcan.gc.ca/cansim/a26?la ... able&csid= to look at various demographics. The 55-64 y/o demographic looks fine.

Total assets $2.5T
Total debts $0.202T

Notable numbers include:
private pension $0.948T
RRSPs/RRIFs/LIRAs $0.296T
employer-sponsored pension plans (EPPs) $0.652T
non-pension assets (e.g. cash, mutual funds, stocks, bonds, TFSA) $0.305T
principal residence $0.701T
mortgages make up $0.138T of total debts.

Total assets are 12x greater than total debts. 28% of assets is in the home, but the home is 80% paid off.

There appears to be no "crisis". The 65+ y/o median data seems fine as well (they have even smaller total debt and their homes are even more paid off), if anybody was wondering.
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Re: Boomertirement -- is this really a "crisis?"

Post by mudLark »

The above seems to raise more questions than answers (specifically the topic question, which seems to be whether a [questionably] low percentage of the 9.6 million boomers in Canada (50 to 68 year olds), now have, or will have insufficient financial assets with which to comfortably retire, and if this constitutes a crisis?):

- According to the above StatsCan site the overall financial worth (Financial assets, non pension less Total debts) of 45 to 65 year olds is negative. Assuming this remains representative of the overall boomer cohort; will this situation eventually translate into a crisis?

- Using the preceding population the average 45 to 65 year old has approximately $55,000 in registered savings (Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), Locked-in Retirement Accounts (LIRAs) and other); is this sufficient to supplement government pensions, for those without a private pension plan? What percentage of boomers have a private pension plan?

On the matter of inheritance:

- The over 65s have much of their wealth tied up in pensions of one form or another; how much of this type of wealth dies with the pension holder (or their spouse)?

- The over 65s have most of their wealth tied up in real-estate; who will be paying to monetize these assets when they are eventually passed on?

- The over 65s seem to have about $400 billion in liquid assets, so the $57k/average boomer (though doubtless skewed) may not be unrealistic. What does seem to be unrealistic is where the other $200k/average boomer is going to come from?

ISTM for many boomers (perhaps as many as 50%) there is a crisis looming, for the rest there is not; yet.
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Re: Boomertirement -- is this really a "crisis?"

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Re: Boomertirement -- is this really a "crisis?"

Post by Peculiar_Investor »

CROCKD wrote:Boomer Confidential
Would it be possible to get some context to the link and and expand on why the article is important?
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Re: Boomertirement -- is this really a "crisis?"

Post by CROCKD »

Points made in the article.

1.
You’ll have to do it frugally; recreational activities and new hobbies can come with an expensive price tag that could quickly drain your hard-earned savings.
2.
Even empty nesters can be faced with the reality of an adult child returning home or an elderly parent becoming a dependant.
3.
Canadian Pension Plan (CPP) is actually pretty stable and will provide retirees with a consistent annual sum of money in your golden years. Even without government funds, Canadian Business points out that most retired couples can live comfortably on 50 to 60 per cent of what they earned when working
4.
With the life expectancy steadily climbing each year -- 65-year-old men can expect to live until 83 and women until 86, according to Money Sense -- it’s likely that you’ll have close to a couple of decades to enjoy this phase of your life.
5.
Nowadays, it’s not unusual for a retiree to find a whole new career after retirement, or to negotiate different employment options such as doing part-time contract work for their former employer.
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