# What happens if you turn 65 and have no money?



## chaudi (Sep 10, 2009)

A friend of mine says you'll get taken care of at least somewhere so he doesn't worry about retirement. I guess they won't let him sit out on the street at least during winter?


----------



## Addy (Mar 12, 2010)

My mother in law turned 65 last summer and she's living off CPP and, because she is morbidly obese, a disability pension of some sort. Retirement in Vancouver..... for the poor and spend-hearty.


----------



## sags (May 15, 2010)

If someone worked somewhere in Canada, they probably would collect some CPP. If they lived in Canada for 10 years or more, they would collect some OAS and probably qualify for GIS.

They would collect between 1200 to 1500 a month.

It doesn't sound like much, but considering if they are single, have no dependent costs, and it is net of taxes...........one could survive fairly well around here in Southwestern Ontario.

Small bachelor apartments in a nice building are available for 598 a month all inclusive. Another 100 for cable and phone, and that would leave 500 to 700 a month for food and other things.

When you think about it, a lot of working people don't have that much left over after paying their mortgage payments, kids, car payments etc.etc.etc.

Not a retirement I would seek, but if it was thrust upon me, I could manage.


----------



## FrugalTrader (Oct 13, 2008)

The newest federal budget includes an increase in GIS as well.


----------



## HaroldCrump (Jun 10, 2009)

Apparently, it is not enough...seniors benefit and corporate taxes appear to be the biggest sticking point for the opposition.
If they get their way (via an election), we can expect to see seniors' benefits increase substantially and corporate tax rates back up to 18%.
Further down the road, an increase in personal income taxes is also to be expected in order to continue funding an increasing retiree population.


----------



## MoneyGal (Apr 24, 2009)

CPP and OAS are fully taxable. GIS is non-taxable income, but starts to get clawed back once your total income is about $15K per annum.


----------



## Brian Weatherdon CFP (Jan 18, 2011)

It's a difficult question -- and it is beginning to haunt those in Ottawa and Washington (& leaders of other aging societies).

We may feel a tad resentful toward people who didn't have the initiative to prepare for themselves. Some people are like that. Most aren't. Somehow as a society we must provide a basic lifestyle -- because this also protects others who never had a true choice, who enter senior years with inadequate resources due to hardships and failures of various unintended sorts (business loss, employment re-orgs, marriage failures, substance habits etc etc).

Many though have more resources than they realize. A couple were living in fear that they would never have the future they wanted. We helped them review all resources and cash-flows, and showed that they will be able to enjoy a greater lifestyle than they had previously expected. This took away the fear.....and probably staved off heart attack or cancer borne of the anxiety they had both been carrying.

If we consider the CPP, OAS, GIS, home equity and ways to access it as needed without high costs, plus possible part-time work (as financial supplement and social stimulation) many will come to avoid the fears.

_PS: you probably know, 2 can live cheaper than 1. If you google articles published about long term care insurance, we find a greater need among singles because they don't have a spouse helping care for them in initial periods of declining health. And there are many more reasons why singles are less financially secure. With high & rising proportion of single adults in our society this is a vital issue._

BW


----------



## OhGreatGuru (May 24, 2009)

FrugalTrader said:


> The newest federal budget includes an increase in GIS as well.


Re-read the details. This is not an increase in the basic GIS rate. It's an increase of only $600/yr if your income is below $2K. If your income is over $2k it is gradually clawed back. Some Gift!


----------



## Cal (Jun 17, 2009)

65. No investments, only gov't CPP/OAS.

Even if your home was paid off, and you had not debt, or dependents. It would only be enough money to survive. What a bleak picture.

In my mind, that is not retirement at all.


----------



## MoneyGal (Apr 24, 2009)

OhGreatGuru said:


> Re-read the details. This is not an increase in the basic GIS rate. It's an increase of only $600/yr if your income is below $2K. If your income is over $2k it is gradually clawed back. Some Gift!


Well, it starts to be clawed back if your income is about $15K (excluding OAS) for a single senior and is fully clawed back if your income is about $31K (again, for a single senior).

An increase of $600/year is like getting an extra month of payments (the current monthly maximum for a single person is about $660) - for people who are eligible for the increased rates, that's actually a substantial increase.


----------



## andrewf (Mar 1, 2010)

I wouldn't advise it. You probably won't be homeless and starving, but you'll live in a small box watching basic cable and pinching every penny. If you have any chronic health issues, you may have a hard time paying for both those costs and food.

Considering it's not usually a big sacrifice, saving for retirement means a big increase is welfare (ie, your wellbeing) in retirement for a relatively small decrease in welfare now.


----------



## J3ff (Mar 20, 2011)

sags said:


> Small bachelor apartments in a nice building are available for 598 a month all inclusive. Another 100 for cable and phone, and that would leave 500 to 700 a month for food and other things.


Where are you finding these inexpensive bachelor apartments? I would love to pay this kind of monthly rent in a nice building.

I should mention that I live in the downtown core of Toronto and rent for a bachelor condominium is $1100+/month


----------



## Sherlock (Apr 18, 2010)

J3ff said:


> Where are you finding these inexpensive bachelor apartments? I would love to pay this kind of monthly rent in a nice building.
> 
> I should mention that I live in the downtown core of Toronto and rent for a bachelor condominium is $1100+/month


Shockingly, most other cities are less expensive than the GTA. A 1 bedroom in a decent building can easily be found for under $700 all inclusive in most cities.


----------



## Brian Weatherdon CFP (Jan 18, 2011)

Chaudi, if your friend is in Sudbury (checked Chaudi.com) $750 or so rent /month is probably available. Even Hamilton may be $800-$1000. Burlington-Oakville-Mississauga is nearer $1000-$1200. Toronto is more.

All depends where your friend lives.....

And CPP/OAS/GIS aren't governed by postal codes, so the $ goes further some places as compared with others.


----------



## OptsyEagle (Nov 29, 2009)

HaroldCrump said:


> Apparently, it is not enough...seniors benefit and corporate taxes appear to be the biggest sticking point for the opposition.
> If they get their way (via an election), we can expect to see seniors' benefits increase substantially and corporate tax rates back up to 18%.
> Further down the road, an increase in personal income taxes is also to be expected in order to continue funding an increasing retiree population.


So, what the opposition is saying, is that we should take the money from the entities that are growing our economy and producing goods and services and give it to the entities that are not doing anything productive at all.

That's a great idea for our seniors, but what are we then going to do with the 18 to 25 year olds that just lost their jobs in response to this decline in our economy. I guess they could just sit around and do nothing as well. 

Oh yeah, those politicians will have this country firing on dead cylinders in no time.


----------



## HaroldCrump (Jun 10, 2009)

^ right...it's all about vote bank politics.
The seniors, unionized manufacturing workers, public sector workers, etc. are big and strong vote banks.
Hence you can see the specific demands clearly correspond to each of those vote banks.
Young folks, middle income families, small business owners, self-employed, etc. are not vote banks and thus get run over every time.


----------



## sags (May 15, 2010)

J3ff said:


> Where are you finding these inexpensive bachelor apartments? I would love to pay this kind of monthly rent in a nice building.
> 
> I should mention that I live in the downtown core of Toronto and rent for a bachelor condominium is $1100+/month


Here is a link to an apartment owned by Sifton Properties in London, Ontario.

They have several buildings, all located in Berkshire Village, which is a beautiful mature area in London. They keep their buildings and grounds immaculately maintained and the area has a mix of families and seniors. Shopping is readily available, and they are on a city bus route.

The price for a bachelor has gone up a bit to 615 all inclusive. The rent is all inclusive and you also get a free membership to their private Berkshire Club, which has a well equipped exercise room, sauna, and indoor and outdoor pools.

http://www.sifton.com/residential/berkshire-club.html

The city maintains garden plots in the area, for anyone who wishes to grow their own food or flowers. Sifton Properties encourages individuals to keep their own property looking good and has a bbq for residents with cash awards for the best looking property. They own 1200 apartments and townhomes, among a wide array of other ventures.

I agree that living in the most expensive city in Ontario would make living on CPP and OAS very difficult, but there are other places to live.

http://www.sifton.com/residential/155-159-gardenwood-drive.html


----------



## sags (May 15, 2010)

Brian Weatherdon CFP said:


> Chaudi, if your friend is in Sudbury (checked Chaudi.com) $750 or so rent /month is probably available. Even Hamilton may be $800-$1000. Burlington-Oakville-Mississauga is nearer $1000-$1200. Toronto is more.
> 
> All depends where your friend lives.....
> 
> *And CPP/OAS/GIS aren't governed by postal codes, so the $ goes further some places as compared with others*.


Perhaps it wouldn't be a bad idea to adjust the OAS/GIS according to the cost of living where a person lives. As it is, an increase of 50 dollars a month may mean a few more dinners out for one senior, while it leaves another senior 50 bucks less short than they were.


----------



## the-royal-mail (Dec 11, 2009)

Why any seniors would choose to live in a huge city like Toronto after retirement is beyond me. That would devastate their retirement income - no, it's best for them to move to smaller communities like Moose Jaw, Portage la Prairie etc. As long as there are hospitals, stores, pharmacies, restaurants and other shopping nearby in quality, clean quiet bldgs that is perfect. You don't need to be in a hyper inflated and congested urban area for that stuff.


----------



## sags (May 15, 2010)

A few years ago, Kevin O'Leary was absolutely glowing about the "Celtic Tiger" (Ireland) and it's low corporate tax structure. Like many in the "whatever business wants" camp, he was proclaiming Ireland as the example for the rest of the world.

They don't talk about Ireland much these days.

The corporations came, made their money, and left.

Ireland was left with a financial crisis, overloaded debt, overpriced homes, and no revenue to offset the problems.

For a Canadian example......look at Fort McMurray, and small towns and villages in the Alberta Tar Sands region.

Companies come in, the economy overheats, there is a tremendous burden on local services, municipalities go into debt, home prices rise, and on and on.

If we are going to lower corporate taxes, so that corporations can make more money and ship it back home, then we should understand that it is us, who will pick up their tab.


----------



## HaroldCrump (Jun 10, 2009)

sags said:


> Perhaps it wouldn't be a bad idea to adjust the OAS/GIS according to the cost of living where a person lives. As it is, an increase of 50 dollars a month may mean a few more dinners out for one senior, while it leaves another senior 50 bucks less short than they were.


That will be an accounting nightmare for everyone, esp. the govt.
The govt. will have to hire one whole new dept. just to deal with that.
And people will still be unhappy...everyone will complain that they are getting the shorter stick.

We can let the market forces take care of this: cheaper cost of living will attract more seniors, increasing demand and nudging up the cost of living.
Over time, things will work themselves out.
Of course, outlying London won't become as expensive as downtown Toronto for example, but cost of living will adjust itself to increasing demand.

It's better to let things be rather than create another layer of govt. bureaucracy.


----------



## Sustainable PF (Nov 5, 2010)

Walmart greeter.


----------



## OptsyEagle (Nov 29, 2009)

sags said:


> A few years ago, Kevin O'Leary was absolutely glowing about the "Celtic Tiger" (Ireland) and it's low corporate tax structure. Like many in the "whatever business wants" camp, he was proclaiming Ireland as the example for the rest of the world.
> 
> They don't talk about Ireland much these days.
> 
> ...


Ireland's problems had nothing to do with their low corporate tax rate. On the contrary, for a country with very little in natural resources or industry synergies, their low corporate tax rate is the only thing that can save them.


----------



## OhGreatGuru (May 24, 2009)

MoneyGal said:


> Well, it starts to be clawed back if your income is about $15K (excluding OAS) for a single senior and is fully clawed back if your income is about $31K (again, for a single senior).
> 
> An increase of $600/year is like getting an extra month of payments (the current monthly maximum for a single person is about $660) - for people who are eligible for the increased rates, that's actually a substantial increase.


I stand by my original comment Moneygal.

From the GoC website:
_
Budget 2011 announces a new Guaranteed Income Supplement top-up benefit targeted to the most vulnerable seniors. Effective July 1, 2011, seniors with little or no income other than Old Age Security and the Guaranteed Income Supplement will receive additional annual benefits of up to $600 for single seniors and $840 for couples. Single recipients with an annual income (other than Old Age Security and the Guaranteed Income Supplement) of $2,000 or less, and couples with an annual income of $4,000 or less, will receive the full amount of the benefit. Above these income thresholds, the amount of the top-up will be gradually reduced and will be completely phased out at an income level of $4,400 for singles and $7,360 for couples._

It is not an increase in the basic GIS. It is a supplement that goes only to the poorest of the poor.

The government is proposing to create a new supplement for those in abject poverty as opposed to those only in simple poverty. What Scrooge dreamed up this scheme?


----------



## MoneyGal (Apr 24, 2009)

OK, I was responding to a different point...my point was that if you are eligible for the maximum GIS under the old rules, you get about $7200 per year, and the new benefit works out to about an 8% increase. That seemed like a pretty big increase to me.


----------



## Four Pillars (Apr 5, 2009)

I just want to point out that the budget will be defeated thanks to Jack "spendy" Layton and this debate is pointless.

Save it for the next budget that passes.


----------



## DenisD (Apr 19, 2009)

A few years ago, when it looked like my investments were going to zero, I calculated I would receive about $1500/month if I had no money at 65. This included about $400/month CPP, OAS, partial GIS and partial Alberta Seniors Benefit.


----------



## fraser (May 15, 2010)

I not a Jack Layton supporter but as his party did point out....the Harper Gov't were proposing to pump $300M into raising a percentage of seniors out of poverty levels. 

That amount apparently equates to only three days worth of spending on last year's G-20. All that to get an electoral 'return' from 416 and 905.


----------



## bbsj (Aug 26, 2010)

The simple answer to the original poster's question is that if you have no money at 65, you will certainly have a somewhat better life than you had at 64.


----------



## HaroldCrump (Jun 10, 2009)

The Money Sense magazine ran an article couple of months back that showed the income/taxation changes that happen at 65.
You can probably find it on their website.
The general conclusion was for someone that has been fully employed throughout the working years i.e. contributed fully to CPP, it aint that bad.
With the CPP, the age credits, pension income splitting between spouses, etc. they won't exactly starve.
It won't be a luxurious retirement, but they can get by.
Yes, they didn't factor in a lot of things like unusual health care costs, etc.


----------



## houska (Feb 6, 2010)

HaroldCrump said:


> The general conclusion was for someone that has been fully employed throughout the working years i.e. contributed fully to CPP, it aint that bad.
> With the CPP, the age credits, pension income splitting between spouses, etc. they won't exactly starve.
> It won't be a luxurious retirement, but they can get by.
> Yes, they didn't factor in a lot of things like unusual health care costs, etc.


And (at the risk of soapboxing), amen to that. I lived for about 10 years in the U.S., and I've lived for shorter periods (multiple months to a year) in several other countries around the world. I love those experiences, but I also happily come back home to Canada and the 48% marginal tax rate I face, because I think by and large we get the balance right. Sure there are all sorts of issues and you don't have to look too hard to find obviously undesirable individual outcomes, but by and large our patchwork quilt does tend to put in semi-reasonable safety nets, without overly stifling entrepreneurialism, initiative, and hustle. This is not an endorsement of any specific political party's view, and does not negate rich disagreement between individuals' points of view on exactly what is appropriate - but the overall clustering of attitudes, and the resultant societal approach that emerges, makes for a pretty good place to call home.


----------

