Wednesday, 23 April 2014

Good new, bad news: Living even longer than previously expected

Back in February a Canadian Institute of Actuaries press release told us that as a result of compiling data specifically on Canadians (previously, they had always apparently relied on US data), they discovered that we can all expect to live a couple of years longer. If a man gets to 65, he can expect to live another 22.1 years, vs the older US-based estimate of 19.8 years. Women go up from 22.1 to 24.4 years. Good news - we get to live longer. Bad news - we have to find the money to pay for it, as do our pension plans, which apparently take anywhere from a 1% to to 7% under-funding hit. It also means we'll be getting lower monthly income henceforth when purchasing annuities. Fortunately, it seems from the detailed report on the CIA website that the revised estimates are in accord with the assumptions used in the C/QPP so their long term funding sustainability is not being put in question.

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