Boomertirement -- is this really a "crisis?"

[Bylo Selhi]

Let me fix that for you:

Twenty-seven percent of people in their 50s saygave as their excuse that having children got in the way of saving for retirement, compared to 15% who blamedgave as their excuse buying a home and 19% who saidgave as their excuse that household bills were the obstacle, says a 2011 study by ING Direct.

Where there's a will, there's a way.

[AltaRed]

Let me fix that for you:

Twenty-seven percent of people in their 50s saygave as their excuse that having children got in the way of saving for retirement, compared to 15% who blamedgave as their excuse buying a home and 19% who saidgave as their excuse that household bills were the obstacle, says a 2011 study by ING Direct.

Where there's a will, there's a way.

Particularly so when one feels a 3000 sq ft house is baseline, along with 2 newish vehicles, granite countertops, stainless steel appliances, Coach purses, designer clothes for children....... I could go on forever. I must admit some conversations have died suddenly when I point that out to someone complaining about having no money.

[brucecohen]

Twenty-seven percent of people in their 50s say that having children got in the way of saving for retirement, compared to 15% who blamed buying a home and 19% who said that household bills were the obstacle, says a 2011 study by ING Direct.

Years ago actuary Malcolm Hamilton figured out that each child raised equals the purchase of one house.

[Rickson9]

Twenty-seven percent of people in their 50s say that having children got in the way of saving for retirement, compared to 15% who blamed buying a home and 19% who said that household bills were the obstacle, says a 2011 study by ING Direct.

Years ago actuary Malcolm Hamilton figured out that each child raised equals the purchase of one house.

I guess this implies that in general, for the 50 set, shelter > progeny.

[steves]

Years ago actuary Malcolm Hamilton figured out that each child raised equals the purchase of one house.

When you count the grandkids that follow, it is worth every penny IMHO.

[ghariton]

Years ago actuary Malcolm Hamilton figured out that each child raised equals the purchase of one house.

When you count the grandkids that follow, it is worth every penny IMHO.

+1

George

[ghariton]

A supplement on retirement finances via The Atlantic.

Based on U.S. surveys, but still interesting to us.

George

[ghariton]

GM Canada pension plan still in trouble:

General Motors of Canada Ltd. still faces a massive shortfall in its unionized pension plan despite a $3.2-billion contribution taxpayers made to the fund when the auto maker’s parent company went into bankruptcy protection in 2009.

The shortfall stood at $2.2-billion as of Sept. 1, 2010 (the latest data available), which is a vast improvement on the $5.1-billion deficiency in the plan before the special payment was made. But it is still a significant amount for a plan that covers more than 30,000 retirees.

<snip>

About 30,000 unionized retirees drew pensions from GM Canada in 2010 – while the number of active workers stood at 6,168. That compared with 23,735 retirees and 15,223 working employees in 2006.

The situation at GM Canada is significantly worse than at Chrysler Canada Inc. and Ford Motor Co. of Canada Ltd. There were 2.6 retirees for every active worker at Ford in 2011, while Chrysler’s ratio was less than two to one.

The GM ratio is likely to deteriorate even further if it goes ahead with the scheduled closing of one of its two car-assembly plants in Oshawa, Ont., in 2013.

That closing will eliminate as many as 2,000 more GM Canada unionized jobs, said Chris Buckley, head of the CAW’s GM bargaining committee and local 222 in Oshawa.

Five retirees for every active worker, eh? Looks like GM Canada's main business is running a pension plan, with making cars a minor side business.

Ontario is doomed.

George

[George$]

....
Five retirees for every active worker, eh? Looks like GM Canada's main business is running a pension plan, with making cars a minor side business.

Ontario is doomed.

George

The Ontario Government did not oversee the pension plans in Ontario properly. By properly I mean that the five retirees should have fully funded their own pension promises while active workers - rather than assume future active workers will fund it for them later.

Another major issue. Conflict of interest. Allowing the employer to administer the pension plan of its employees is a prescription for an eventual pension disaster.

[brucecohen]

....
Five retirees for every active worker, eh? Looks like GM Canada's main business is running a pension plan, with making cars a minor side business.

Ontario is doomed.

George

The Ontario Government did not oversee the pension plans in Ontario properly. By properly I mean that the five retirees should have fully funded their own pension promises while active workers - rather than assume future active workers will fund it for them later.

Based on what happened in the US as detailed in the book Retirement Heist, I'd check to what extent (if any) GM has included very generous executive plans in its headline pension liability. In her book, WSJ reporter Ellen Shultz says US DB plans for employees were properly funded at the time the companies cried poor -- the outsized liabilities were created by including exec plans that were totally unfunded. She points out that employee DB coverage was then reduced while the exec benefits remained untouched.

[DenisD]

Don't believe retirement doom and gloom

Actuary Malcolm Hamilton is exactly this person, but at age 61 he’s heading into retirement later this year. What have his 32 years of experience taught him about life after leaving the workforce?
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I don’t have much of an RRSP because I’ve been in a defined benefit pension plan my whole life. I have real-return Canada bonds purchased when they were first issued in 1991 – they mature in 2021. That’s about half of it.

He bought his before I bought mine.

[ghariton]

Don't believe retirement doom and gloom

Actuary Malcolm Hamilton

<snip>

I don’t have much of an RRSP because I’ve been in a defined benefit pension plan my whole life. I have real-return Canada bonds purchased when they were first issued in 1991 – they mature in 2021. That’s about half of it.

Are the RRBs half of Mr. Hamilton's total savings, or half of his small (if not tiny) RRSP? If the former, does that mean that Mr. Hamilton is holding RRBs in a non-registered plan?

Any which way you look at it, I should have purchased more of the suckers, and earlier, instead of chasing tech stocks. On the other hand, profit-taking on the tech stocks allowed me to buy some of my RRBs. And so the circle goes...

George

[Bylo Selhi]

He bought his before I bought mine.

I doubt many people outside the financial community were even aware of what RRBs were when they were introduced back in 1991, let alone appreciated why they might be a good investment.

Any which way you look at it, I should have purchased more of the suckers, and earlier, instead of chasing tech stocks. On the other hand, profit-taking on the tech stocks allowed me to buy some of my RRBs.

Me too. But I sure am happy with what I have.

A similar situation existed in the early 1980s when GoC 30-year nominals were paying ~15%. In that case the reason they were unloved was that hyper-inflation was (supposedly) looming and few wanted to lock themselves in for 30 years for "only" 15% interest. But the brave few who, ahem, "bought low" and held, made off like bandits. I wonder what they're going to do with their principal repayments when those suckers mature this year and next.

[zinfit]

I think there was a period when 30 year bonds were yielding 19%. To bad I didn't have anything to invest in those days.

[izzy]

I think there was a period when 30 year bonds were yielding 19%. To bad I didn't have anything to invest in those days.

Exactly !
I had a mortgage instead,mind you it was a great incentive to pay it off as soon as possible!!