It is a melancholy object to those who browse the web or travel through other media, when they see the news, the discussion forums, the blogs, and editorials, crowded with beggars of the boomer generation, followed by one or two children, their retirement savings in rags and importuning every government for an alms.
These boomers, instead of being able to retire in comfort, are forced to employ all their time in lobbying to beg sustenance for themselves: who as they grow older either turn tax cheats for want of income, or leave their dear native country to work for the Global Megacorporation in Spain, or sell themselves to the McDonald's.
I think it is agreed by all parties that this prodigious number of boomers in the arms, or on the backs, or at the heels of their government, and frequently of their children, is in the present deplorable state of the kingdom a very great additional grievance; and, therefore, whoever could find out a fair, cheap, and easy method of making these boomers sound, useful members of the commonwealth, would deserve so well of the public as to have his statue set up for a preserver of the nation.
But my intention is very far from being confined to provide only for boomers of professed low income earners; it is of a much greater extent, and shall take in the whole number of boomers at a certain age who are born of parents in effect as little able to support them as those who demand our charity in the media.
As to my own part, having turned my thoughts for many years upon this important subject, and maturely weighed the several schemes of other projectors, I have always found them grossly mistaken in the computation.
As little other nourishment; at most not above the poverty line, which the boomer may certainly get, or the value in scraps, by her CPP, OAS and GIS; and it is exactly at 75 years old that I propose to provide for them in such a manner as instead of being a charge upon their parents or the government, or wanting food and raiment for the rest of their lives, they shall on the contrary contribute to the feeding, and partly to the clothing, of many thousands. There is likewise another great advantage in my scheme, that it will prevent those voluntary suicides, and that horrid practice of children exploiting their infirm parents, alas! too frequent among us! sacrificing the poor innocent seniors I doubt more to avoid the shame than the expense.
Having thus paid homage to the immortal Mr. Swift, and perhaps having suggested that times have not changed greatly in the last three hundred years, only the particulars, let us turn to the simpler, more direct and less convoluted modern diction and style, the better to be understood.
CROAK (Canada Retirement Old Age Kaput)
"Ask not what your country can do for you - ask what you can do for your country" John F. Kennedy, US President, 1961
(In the time-honoured Canadian tradition, we adopt the words of a United States President as the theme for our program. Like the jealous little brother, we watch the USA's every move and resent its power and influence, then proceed to imitate it and adopt its ideas. Contrary to Canadian government tradition, the program is given an easily remembered and pronounceable acronym (viz RRSP, TFSA, LIRA) related to the subject matter.)
CROAK is proposed as the government's visionary response to the new reality of the 21st century. It can be thought of as a national "best before" date for people.
- a huge number of people in the baby boom generation is now entering retirement, which will increasingly outnumber and overwhelm the working population, with the effect that the working population will be insufficient if they are required to support the boomers
- longevity is increasing slowly but steadily, such that a person retiring at 65 may easily live twenty five years in retirement, with the effect that a lot more savings is needed to sustain an income
- defined benefit plans that assure lifetime income have been steadily disappearing, and people are being required to fend for themselves
- defined contribution pension plans give an uncertain income at best due to market fluctuations, with the effect that not only may the required money not be there at all, the uncertainty itself creates great mental stress for the retirees
- future expected rates of return on investments are forecast to be substantially lower than in the last twenty year "golden period", exacerbating the likelihood that income will be insufficient
- government pension programs like the CPP, OAS and GIS are insufficient to ensure a comfortable retirement, being in total somewhere around the poverty line and it would be impossibly expensive to drastically increase the amounts, not to mention being unfair and a huge burden on the younger generation that would be required to pay the taxes
- an individual cannot predict when he/she will die, creating more uncertainty and stress and a need for an excess cushion in funds to plan for a possible long life
- children have an increasing burden of caring for parents, who may be alive through modern medicine but require assistance; increasing longevity can impose many more years of such care than was the case in the past, all of which reduces the productivity of young adults and takes away from breeding and raising the next generation
- living disabled and/or with chronic illnesses in old age for many years is no fun for the old either
- the recent financial crisis has decimated such pension plans and savings as exist, with little hope for quick recovery, leaving the distinct possibility that sufficient recovery will not happen soon enough to make up shortfalls
- the combination of all these factors makes it extremely complex to plan and figure out what to do and Canada's professional self-professed "financial planners", being primarily licensed and remunerated to sell mutual funds, are on the whole woefully incapable of helping boomers cope with the situation
- at age 75, every Canadian will be required by law to, so to speak, cash in their chips, to retire from life, to relocate to another world, to change state from solid to gas (why 75? it's a nice round number and easy to remember); some innocuous sounding politically correct term like "Planned Departure from Life" needs to be found - perhaps readers can offer suitable suggestions?
- government will increase CPP payments to give older retired folks a more decent standard of living (using the savings described below as source of funding)
- the first $200,000 of funds in a person's estate will go tax free to persons named in a will, thus creating tax neutrality and removing tax distortion effects between different types of assets and accounts (e.g. a home is free of capital gains but an RRSP/RRIF/LIRA is taken into income all at once at death and thus likely to be taxed at a high rate); this will also create an incentive to leave some for the next generation.
So great and numerous are the benefits of this program, and to all "stakeholders", that no one can fail to support it.
... for all concerned -
- a huge simplification in planning since there will be a precise target date for all streams of money, whether income or outgo
- reduction of about four years in pension payout now since average life expectancy is around 79
- large reduction in end-of-life health care expenses as older people avoid the trip to hospital as they enter their final fatal illness (see Australian study that says older folks occupied almost half of acute care beds); by contrast, the cost of an injection such as Fatal-Plus is minimal - in fact vets could be given this added power since they are familiar with the techniques and are much cheaper than doctors for what will, after all, become a routine task, as this article from the Salisbury Post suggests (simply substitute "person" for "dog" and you can easily imagine how it would go - note below how the vets are friendly and conversational)
"Helms has difficulty holding the dog because he's so playful.
"OK, it's all right," Blinn says. "What a good man you are."
She pets the dog before administering the lethal dose, then verifies death and scratches his ear."
- by age 75, pretty well everyone has slowed down so much, they have stopped working and are thus not productive members of society, i.e. a burden; if people retire at 65, they have ten years to enjoy the leisure they have earned, so it is a fair trade-off
- much reduced necessity to care for aged, infirm, sick parents in the last stages of life (at age 75 most people should be relatively healthy and capable), with several beneficial consequences - children's time off work is reduced, helping employers and the economy, less stress for children in managing their own lives, part of which is the mental distress of seeing the physical and mental deterioration of their parents and eliminating resentment children might feel towards their parents from the burden of care
- a much higher probability of receiving an inheritance due to two effects - first the tax incentive for parents to leave something; second, the shorter time before departure means parents are less likely to have spent it all; third, the fixed departure date means that parents can plan exactly how much they will leave to children and the fact that parents could chose to spend it all instead of having to keep some money in reserve means that children will have to pay attention and treat their parents nicely
- the opportunity to live it up and enjoy life to the max since they would know exactly their time left - no worries about money running out, it could be calculated to the penny and the limited time of ten years after 65 prevents inflation from eroding a fixed income's purchasing power too much. How much stress is there now for older people wondering if they will have enough and scrimping to make sure? Even procrastinators usually respond to a fixed deadline so a life of "no regrets" becomes much easier to attain.
- going out while you are in good shape spares the embarrassment and indignity of deterioration. The authority of a government program that applies to everyone removes the stigma of early departure, such as for those today who might consider suicide.
- both parents and children would have a much better chance of properly saying goodbye to each other (one could anticipate a change in the funeral industry from the sad tone of today to a feel-good "say goodbye in style"; whether the present funeral industry could make the huge cultural shift required is likely to provoke much debate by business professors but if it doesn't, one could reply that it is the creative destruction of capitalism at work, such as replacing horse-drawn buggy makers by car manufacturers)
- money will be recycled sooner, either by the parents spending every last penny by 75 or by the children who receive a bigger inheritance sooner
- Canada could have a unique selling point amongst developed countries, all of which are aging, with a much younger and more dynamic workforce
A transition period is of course advisable to allow everyone to get prepared. A very straightforward plan would be to apply the new rules for anyone turning 65 as of July 1st or some other arbitrary date and allow anyone already 65 to be "grandfathered" (that such an expression already exists in common language is a sign that this proposal makes sense).
Thus can one see how the application of logic and reason, along with a bit of imagination and drawing upon examples from the past (indeed, circumstances of life for the original inhabitants of Canada caused action similar to this proposal to occur, as the article Did the Eskimos put their elderly on ice floes to die? from The Straight Dope explains about the Inuit), enables the formulation of innovative solutions we so urgently need.