Seniors Benefits Discussion- split from Liberal (Minority/Majority) Government 2025 - ???

[Halifax Tar]

It would provide a actual reason for people to get married. A fiscal incentive which would encourage having complete home, more stability for children, lowers the complications of dealing with common-law ‘divorces’, etc.


100% sure you cannot income split until your a senior. Maybe your thinking of the tax program choosing who gets what tax benefits/credits applied where.

I wish there was income splitting for married couples across the board. For my family it would make a huge difference as I have to be the sole income earner due to my wife being stuck working casual to care for my disabled son. Having that income taxed as two people making 55k a year would save so much more than one person making 110k, even though they treat household income for our collective benefits.

Roughly tax on 110k is 23,693$ but tax on 55k split is a total of 14,894$, thats 8,799$ difference in tax savings. The difference that would make for many families is huge.

I thought Harper brought in income splitting ?

 

[PPCLI Guy]

100% sure you cannot income split until your a senior. Maybe your thinking of the tax program choosing who gets what tax benefits/credits applied where.

The CAF pension is eligible for income splitting. I have been doing so since I retired at the age of 58.

 

[rnkelly]

The CAF pension is eligible for income splitting. I have been doing so since I retired at the age of 58.

Another reason why DB pensions are so valuable. Odd though that those fortunate enough to have a DB pension also get the additional benefit of preferential tax treatment.

 

[Czech_pivo]

Total contribution limit right now is $109,000.

What RoI number, repeated each year, would have gotten max contributions (each year) to $1M by now? A little over 25%?

If you invested solely in SPY the max amount over entire length of the TSFA you'd be sitting on just over 700k.

Buy an Indexed ETF and do nothing more continuously invest in it.

Over the last 18 years, the SPDR S&P 500 ETF Trust (SPY) has achieved an annualized average return of approximately 11.4% to 11.8% when dividends are reinvested.

 

[SeaKingTacco]

The CAF pension is eligible for income splitting. I have been doing so since I retired at the age of 58.

That is what is happening…

 

[Brad Sallows]

If you invested solely in SPY the max amount over entire length of the TSFA you'd be sitting on just over 700k.

Buy an Indexed ETF and do nothing more continuously invest in it.

Over the last 18 years, the SPDR S&P 500 ETF Trust (SPY) has achieved an annualized average return of approximately 11.4% to 11.8% when dividends are reinvested.

So far, you've approximately conceded that $1M right now is not realistic and managed to find one fund that outperformed the market. Your argument is not improving.

TFSAs are helpful, but they aren't a panacea.

 

[Brad Sallows]

Canadians do not, mostly, suffer a crushing weight of taxes. Maybe some provincial taxpayers back east do.

Canada does not have revenue problems; Canada has spending problems. Every public dollar spent does someone, somewhere, some good; and some variation of that is essentially the argument that is made to start or prop up every program.

Means-testing OAS isn't going to save anywhere near the amount of money that the whole program costs. If a person's position isn't "cut it all", no-one should be citing the full cost of the program as a problem to be fixed. What's your proposed cut-off, and how much would it really reduce costs? Show the arithmetic. There are most likely enough data available on websites to pull together a first-order approximation by income deciles at least.

 

[Altair]

Canadians do not, mostly, suffer a crushing weight of taxes. Maybe some provincial taxpayers back east do.

Canada does not have revenue problems; Canada has spending problems. Every public dollar spent does someone, somewhere, some good; and some variation of that is essentially the argument that is made to start or prop up every program.

Means-testing OAS isn't going to save anywhere near the amount of money that the whole program costs. If a person's position isn't "cut it all", no-one should be citing the full cost of the program as a problem to be fixed. What's your proposed cut-off, and how much would it really reduce costs? Show the arithmetic. There are most likely enough data available on websites to pull together a first-order approximation by income deciles at least.

Lol....

Proposal to cut OAS for high-income seniors could save billions

A University of British Columbia professor says changes to Old Age Security (OAS) could help reduce Canada’s projected $78-billion deficit.

www.ctvnews.ca

https://www.ctvnews.ca/

Research Co. president Mario Canseco says just over 60 per cent of those surveyed believe the OAS threshold should be the same as, or lower than, the $81,000 cutoff used for the Canada Child Benefit.

Both Kershaw and Research Co. estimate that broader reforms could generate up to $20 billion in annual savings.

Yeah, literally one google search.

 

[Czech_pivo]

So far, you've approximately conceded that $1M right now is not realistic and managed to find one fund that outperformed the market. Your argument is not improving.

TFSAs are helpful, but they aren't a panacea.

LOL - Its not '1' fund, its investing the in the S&P 500 exclusively. The same can be said if someone mixed SPY with QQQ, which is the NASDAQ index. Go and pick any other EFT that focuses only on the S&P 500 or the NASDAQ only, the results will be remarkable close.

Since 2008, the Invesco QQQ has achieved an average annualized return (compound annual growth rate, or CAGR) of approximately 15% to 17% per year, depending on the exact measurement period.

Investing is no longer rocket science - its ALL about 2 things and only 2 things - Discipline and Consistency. The investment industry (mostly in the US) has made it so, so very easy to become a million over time if - if - you are able to maintain the above 2 things.

For example - if a person 18yrs old invested 2,000$ per year for only 5 yrs, from the ages of 18 to 22 and put that 2,000$ into the SPY ETF and NEVER put another penny into the fund, they should have - based on historical returns - have around 900,000$ by the time they turn 65. That's 10,000$ turned into 900,000$.

I've already started this with both of my kids when they turned 18yrs old. I made sure that both of them opened an RSP when they turned 18 and we dropped 2k into SPY for both of them. For my son, this year will mark his 3rd 2,000$ contribution. They have both seen the math on this and both are excited about it, though imagining something so far into the future when they are just 18-20yrs old is a bit too much. I've told them that if they want to continue after 5yrs that's up to them but I've already told them to focus alot more on the TFSA from age 23 going forwards because all of that is tax free money and contributing from age 23 to age 65 the max amount will mean that they will live quite comfortably when they retire.

If you don't believe that a TFSA - when used properly - over time can be the cornerstone of your retirement there's nothing I can do then to explain this to you.

I encourage all of you to sit down with a knowledgeable financial planner. Avoid going to your basic 'planner' at your local bank branch.....

 

[Brad Sallows]

LOL - Its not '1' fund, its investing the in the S&P 500 exclusively. The same can be said if someone mixed SPY with QQQ, which is the NASDAQ index. Go and pick any other EFT that focuses only on the S&P 500 or the NASDAQ only, the results will be remarkable close.

It's right there in the acronym: the "F" in ETF is "Fund". When I invest in "funds", I buy the "funds", irrespective of how the fund managers compose them. Is it really necessary to play tedious games redefining industry-accepted terms? You write about financial advice; but most sound financial advice is not going to be "stick it all in this one thing because historically it has done well".

If you don't believe that a TFSA - when used properly - over time can be the cornerstone of your retirement there's nothing I can do then to explain this to you.

I'm sure it can be helpful; how helpful depends on retirement income. RRSPs and TFSAs fit different expected lifetime income profiles. The arithmetic is also different for people who will spend their entire lives accumulating TFSA contribution room from 18 up, and people who were halfway through a working life when TFSAs were introduced. There simply aren't that many $1M+ balances held in TFSAs right now.

 

[Brad Sallows]

Yeah, literally one google search.

Well, fuck, I can claim I know how to save $40B. Or $60B. I just need to set the threshold low enough.

Anyone can claim "could save $X". Shouldn't be hard to show the work and explain exactly where the clawbacks begin (one number) and the complete cutoff happens (another number) and the claimed amount saved (a third number), but for some reason everyone is reluctant to do it or to make it easy to find. Three numbers. How hard is that?

 

[ytz]

Anyone can claim "could save $X"

Strawman when called out.

 

[Czech_pivo]

It's right there in the acronym: the "F" in ETF is "Fund". When I invest in "funds", I buy the "funds", irrespective of how the fund managers compose them. Is it really necessary to play tedious games redefining industry-accepted terms? You write about financial advice; but most sound financial advice is not going to be "stick it all in this one thing because historically it has done well".

I'm sure it can be helpful; how helpful depends on retirement income. RRSPs and TFSAs fit different expected lifetime income profiles. The arithmetic is also different for people who will spend their entire lives accumulating TFSA contribution room from 18 up, and people who were halfway through a working life when TFSAs were introduced. There simply aren't that many $1M+ balances held in TFSAs right now.

Good luck to you in your approach, hopefully it works out for you.

You're right, there are not many TFSA's with 1+million balances currently. But every single year the number with 1+m will grow but I don't expect it will balloon out of control because too many people think they can out perform the market and that their approach is better than those in the industry. Few have the discipline and the consistency required.

 

[Altair]

Well, fuck, I can claim I know how to save $40B. Or $60B. I just need to set the threshold low enough.

Anyone can claim "could save $X". Shouldn't be hard to show the work and explain exactly where the clawbacks begin (one number)

81k

and the complete cutoff happens (another number)

100k

and the claimed amount saved (a third number)

20b

, but for some reason everyone is reluctant to do it or to make it easy to find. Three numbers. How hard is that?

It's in the link in the article.

 

[Brad Sallows]

Good luck to you in your approach, hopefully it works out for you.

There was no TFSA for most of my working life, so I had to make do. Turned out "make do" was wildly over-sufficient.

A TFSA is just one thing. If the goal is to end up with a million-dollar nest egg and have an income that doesn't trigger OAS cutoff, great. If the goal is to have a much larger income (even without OAS), then there are some alternative strategies that are good enough and don't need a TFSA shelter.

 

[Brad Sallows]

81k

100k

20b


It's in the link in the article.

Yeah, here's what the article has:

"The proposal includes lowering the household income eligibility threshold from $185,000 to $100,000—a move Research Co. estimates could save roughly $7 billion annually."

"just over 60 per cent of those surveyed believe the OAS threshold should be the same as, or lower than, the $81,000 cutoff used for the Canada Child Benefit."

"Both Kershaw and Research Co. estimate that broader reforms could generate up to $20 billion in annual savings."

The "100K" number is about a proposal that might save $7B, not $20B.

The "81K" number is just part of an opinion question.

The "20B" number is "broader reforms could". I claim that much broader reforms could save $40B, and much, much broader reforms could save $60B. Easy game to play.

 

[Altair]

Yeah, here's what the article has:

I'll play along.

"The proposal includes lowering the household income eligibility threshold from $185,000 to $100,000—a move Research Co. estimates could save roughly $7 billion annually."

Correct.

"just over 60 per cent of those surveyed believe the OAS threshold should be the same as, or lower than, the $81,000 cutoff used for the Canada Child Benefit."

What you left out here was the following

Six in ten agree that the OAS threshold should be the same or lower than the threshold for the Canada Child Benefit – currently set at $81,000. This bold move would increase annual savings from $7 billion to nearly $13 billion.

I highlighted the bolded section. So we are up from 7b to 13b.

"Both Kershaw and Research Co. estimate that broader reforms could generate up to $20 billion in annual savings."

Left out here was

In addition to fixing OAS, Canadians want Ottawa to improve how other retirement supports are delivered.

63% support redirecting funds from two poorly designed tax shelters to offset rising OAS costs driven by population aging.

Despite costing taxpayers $7 billion a year, the Age and Pension Income Credits fail to benefit many low-income seniors – a design flaw most no longer want to tolerate. Seniors themselves are most likely to want a remedy from Ottawa: 69% agree that these funds could do more to reduce poverty and manage budget pressures if they were redirected into OAS.

Together, the policy reforms Canadians support could generate up to $20 billion in annual savings, without raising taxes or growing the deficit still further.

7b->13b->20b.

The "100K" number is about a proposal that might save $7B, not $20B.

The "81K" number is just part of an opinion question.

The "20B" number is "broader reforms could". I claim that much broader reforms could save $40B, and much, much broader reforms could save $60B. Easy game to play.

Like I said, the numbers were in the link in the article.

 

[Brad Sallows]

I'll play along.

Correct.

What you left out here was the following

I see the problem. I read the CTV article, not the proposal web page. But redirecting Age and Pension Income Credits from one expenditure to another won't save anything. So at an $81K cutoff, they can claim $13B in cost reductions for their estimate.

Median income for 65 and over is about $40K and average is about $55K (here). There's a lot of room between either of those and $81K. I haven't had any luck with a search that will produce the income deciles for individuals over 65, but I remain skeptical there's much to be gain by only lowering the cutoff to $81K.