Many Canadians lack sufficient funds for retirement
A study by the Broadbent Institute shows that only 15 to 20 percent of middle-income Canadians who are retiring without an employer pension plan have saved sufficient funds for their retirement.
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|The group, now at the age of 55 to 64, will face a huge drop in their standard of living once they retire. Many will be below the poverty line. The study used figures from Statistics Canada to reach their conclusion. Almost half of Canadians, 47 percent have no employer pensions. The situation will become worse as even less younger Canadians have employer pensions. Author of the report, Richard Shillington, says that the number of seniors who are living at the poverty level will increase over the next decades.|
"Even if you assume a decreased need or if you liquidate your home equity, the news is still very grim. We're looking at a situation in our country — 10 years down the line, 15 years down the line — where millions of Canadians have very little disposable income and that's not good for the economy."Smith said that the Liberal federal government needed to move quickly to reform the CPP. He said that governments and others had been arguing that Registered Retirement Savings Plans(RRSP) and Tax Free Savings Accounts could be a replacement for workplace pensions. While they do help some people who have the money to save, they do not replace pension funds. Shillington wrote in his report:
"These findings raise serious questions about the policy needs for future pensionless cohorts, such as the adequacy of benefits from Old Age Security, the Guaranteed Income Supplement, and the Quebec and Canada pension plans."The Broadbent Institute was created by former NDP member and leader Ed Broadbent. The instituted studies Canadian public policy with a view to making Canada a more equitable society.
Labour groups say the proposal would see the doubling of the CPP income replacement rate to 50 per cent and push the maximum CPP benefit to $24,000 per year and the average benefits to $12,600 per year. For 2016, the maximum CPP benefit will be about $13,000 for the year, and the average payment works out to just over $7,550 annually.