Old Age Security Cheques Slated to Arrive at 67

A new problem has reared its head in Canada that surrounds proposed changes regarding when one receives Old Age Security (OAS) cheques. As of now if you’ve never put any money away (which is unequivocally a method to wind up on the streets when you hit 65) you’ll get three cheques in the mail when you hit retirement age–currently 64–: OAS, CPP, and GIS if you qualify.

When you receive these cheques is up for change by the Conservative government. OAS cheques may start arriving two years later.


The move comes on the heels of some serious demographic problems facing, well, everyone. Canadians currently working outnumber retirees 4 to 1. In 18 years that’s going to change to 2 to 1. That means for every two people working, they need to pay additional taxes to support one retiree (whereas today it was 4 to one). Two things will happen. Pensioners will receive less, those paying taxes will pay double.

Either way someone will get the royal pension screw.

In the same time period OAS will have to balloon to over 100 billion in order to sustain the additional pensioners. Where will, say, 60 billion dollars come from just to protect OAS?

Well in comes the government in an attempt to stem the hemorrhaging pension funds. What is already a problem is only going to get doubly worse overtime. All OECD countries understand this predicament and in turn have begun to address the issue starting with increasing the age you can collection certain pensions. in Canada OAS cheques arrive at 65 but the Conservatives want to increase that age by two years to 67.

The move makes sense on one hand, the cost of OAS (and other pension funds) will almost triple in less than 20 years. The number of people supporting those funds will decrease by half. The current scenario is simply unsustainable and could bankrupt an entire generation that forget to save–and then mire every generation after in the same predicament only worse.

It’s certainly a tenuous political position to be in, but what are the solutions? So far I’ve read of zero solutions other than, “don’t take money away from seniors.” That’s all fine and dandy, and you hate to pull cash away from the most vulnerable, but there simply will be no money left at the current rate of debits and credits.

In fact, what’s two years? Does that really solve the issue? Hardly. Compounding the problem is the other problem–health. Health care costs will also balloon increasing taxation yet again for ensuing generations to the Baby Boomers. PLUS, baby boomers and ensuing generations are going to live longer therefore requiring more healthcare longer, and of course their pensions will need to be paid for decades longer than thirty years ago.

Unfortunately, you can’t simply keep on increasing the minimum age to collect Old Age Security checks. No, there’s something more that needs to be done that has yet to emerge. We’re in trouble, the world is since this is an issue about demographics and not one particular country.

Moral of the story?

Generation X, Y, and Z need to become better savers or they’ll be on the street. There is only a finite amount of money collectable through taxation and once that’s tapped out pension funds will only dwindle due to the sheer number of people drawing on the fund and doing so for far more years than in the past.

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