Families will have to help each other
There was an article last week that encouraged Canadians to save twice as much for retirement as they have been planning to do.
This is primarily because interest rates are giving such terrible returns that savings will deplete quickly when the principle has to be used in a much higher proportion to pay for expenses.
And while you’re at it, you might want to keep working past age 65.
Good advice, but a bit late for those who planned, for the last 40 years, to live off the interest from the savings they now have with the expectation of reasonable returns of five to 10 per cent.
At this stage, it’s difficult, or perhaps more accurately, impossible, for them to either save more or get a job after 65.
In fact, this newly minted generation of elderly Baby Boomers has been raised on the notion of getting a lot of benefits that are now questionable.
Many companies with private pension plans have disappeared, and the benefits with them.
Universal health care has been replaced by inaccessible health care.
Homes for the elderly have been replaced by waiting lists for homes for the elderly.
I am stating, of course, the most cynical view you hear about services for the elderly these days.
But bad news travels faster and gets more traction with the media than good news, so there are plenty of scary stories out there for the elderly to hear and worry about.
It’s almost cruel for the media to carry such sensationalized reports on the news regularly.
Since most of the elderly watch the news religiously, they are susceptible to this kind of fear-mongering and stew about their future burdens.
We are challenged, unquestionably, by a huge generation of elderly who are coming into the most needy stage of their lives at just the time our governments are pinched for cash, our infrastructure is stretched to its limits and our economy is making it difficult for young people to gain employment and pay their part into the social contract that the elderly accepted in their youth.
The contract was simple. You pay taxes and pension fees now and government programs will look after you later.
The problem is that much of what was paid was spent or wasted a long time ago, and with a small generation in a sluggish economy trying to support the expenses at the other end of the contract, there’s a big challenge ahead.
Perhaps the scariest part is how little the recently-turned-elderly generation has saved in preparation. Many of them actually did believe they’d be taken care of in perpetuity and never took saving for the future too seriously.
I have told my sons, who are now young men, to think about saving with the understanding that you might have to take care of yourself in your retirement years with no support at all.
In that way, any support that you get later is a bonus.
But in the interim, you put money away early and let the earnings compound rather than wait until you’re 65 to start looking for a greeter’s job in a local store or serve coffee in fast food outlet.
Of course, I’ve also told them that when or if they get to a stage of buying real estate, to let me know so that I can invest some of my shrinking savings in a place with an in-law apartment in the basement.
That’s right, families are going to have to help each other out a bit when these challenges come home to roost, and I, for one, am being particularly nice to the boys these days.
Graham Hookey writes on education, parenting and eldercare (email@example.com).