Our Ridiculous Approach to Retirement

[CountDeMoney]

I'm pretty such the Canucks have a lot more protections and mechanisms in place to prevent that sort of thing, as opposed to here, where they can destroy a pension program for fun and profit.

Well... mine is a government pension.  There are protections in place to protect my pension - put in place by that same government.

If the government did want to destroy my pension, they are the ones who could change those same rules.

Right, and since Canadian society appears to be much less predatory than American society, I don't think you'd have the same problems Yi mentioned.

[Admiral Yi]

I just questioned whether that risk was any greater than the risks you run saving on your own.  Short of burying gold in the back yard you are still dependent on the good will (or at least not the active malice) of a whole series of strangers.

Au contraire.  You are dependent on legal protections.  If my online broker hates my guts The Man still has my back.

[Barrister]

I just questioned whether that risk was any greater than the risks you run saving on your own.  Short of burying gold in the back yard you are still dependent on the good will (or at least not the active malice) of a whole series of strangers.

Au contraire.  You are dependent on legal protections.  If my online broker hates my guts The Man still has my back.

Sounds to me like you are dependent on legal protections as well if your online broker hates your guts.

[Admiral Yi]

Sounds to me like you are dependent on legal protections as well if your online broker hates your guts.

That's what I was saying.  I'm indifferent if my online broker hates my guts or not.  I'm indifferent if the CEO and the board of companies I own shares in hate me.

[Barrister]

Also as a government employee - what else am I supposed to do?

I could theoretically pretend I will not receive a pension, and thus put away into RRSPs a sum high enough to live off of in retirement.  However that seems hugely wasteful - given that I am 37, not 21, I would have to save a significant % of my take-home pay.

And then when I retire I have more then enough money, so I guess I just give it to my kids when I die?

[Neil]

I'm pretty such the Canucks have a lot more protections and mechanisms in place to prevent that sort of thing, as opposed to here, where they can destroy a pension program for fun and profit.

Well... mine is a government pension.  There are protections in place to protect my pension - put in place by that same government.

If the government did want to destroy my pension, they are the ones who could change those same rules.

Right, and since Canadian society appears to be much less predatory than American society, I don't think you'd have the same problems Yi mentioned.

We'll see.  In about 25-30 years, there are going to be a lot of people trying to retire who saved nothing for their retirement, and put everything into cocaine, strippers, snowmobiles and a new truck every other year.  At that point, if a politician wants to balance the budget by trimming those 'excessive and unfair' public pensions, he'll have a constituency.

[Admiral Yi]

Also as a government employee - what else am I supposed to do?

Same as anyone else does--realize the stream of money you're expecting has some uncertainty built into it.

[MadImmortalMan]

Seventy-five percent of Americans nearing retirement age in 2010 had less than $30,000 in their retirement accounts.

Good lord, where to begin.


401ks and no-load mutual funds are both less than 30 years old. It would be extremely hard for a person who began their working career since then to find themselves in the above situation without living in near-homeless conditions and/or making a huge effort to avoid saving anything at all. People retiring in 2010 are from before that generation, and probably have their retirement funds supplemented by different vehicles from the earlier era.

[MadImmortalMan]

DGuller is trying to sell you annuities, guys. 

[Barrister]

DGuller is trying to sell you annuities, guys. 

I think he might be right to do so.   

[Admiral Yi]

Good lord, where to begin.


401ks and no-load mutual funds are both less than 30 years old. It would be extremely hard for a person who began their working career since then to find themselves in the above situation without living in near-homeless conditions and/or making a huge effort to avoid saving anything at all. People retiring in 2010 are from before that generation, and probably have their retirement funds supplemented by different vehicles from the earlier era.

I also noted that this dude Teresa made no mention of assets *outside* retirement accounts.

[Barrister]

Good lord, where to begin.


401ks and no-load mutual funds are both less than 30 years old. It would be extremely hard for a person who began their working career since then to find themselves in the above situation without living in near-homeless conditions and/or making a huge effort to avoid saving anything at all. People retiring in 2010 are from before that generation, and probably have their retirement funds supplemented by different vehicles from the earlier era.

I also noted that this dude Teresa made no mention of assets *outside* retirement accounts.

The limited set of people I know who are up for retirement are generally going to do well because their homes have increased substantially in value and are fully paid off.

My wife's grandma (in her 80s, so not a recent retirement) lives high on the hog because the modest bungalo they purchased in Surrey, BC decades ago sold 5 years ago for close to a million.  She moved to small town Alberta where she bought a very nice house for less than $100k

[Admiral Yi]

I think he might be right to do so.   

You still need to worry about counterparty risk. 

[DGuller]

Also as a government employee - what else am I supposed to do?

Same as anyone else does--realize the stream of money you're expecting has some uncertainty built into it.

But he's just one person, so in effect he self-insures against uncertainty.  Self-insurance options for ordinary individuals are often:

1)  Hope for the best.
2)  Insure against it at prohibitive cost.

If he could taken a portion of his equity in his public pension and transfer it to some other pension schemes, then his realization of uncertainty of his public pension may be worth something.

[Malthus]

Good lord, where to begin.


401ks and no-load mutual funds are both less than 30 years old. It would be extremely hard for a person who began their working career since then to find themselves in the above situation without living in near-homeless conditions and/or making a huge effort to avoid saving anything at all. People retiring in 2010 are from before that generation, and probably have their retirement funds supplemented by different vehicles from the earlier era.

I also noted that this dude Teresa made no mention of assets *outside* retirement accounts.

The limited set of people I know who are up for retirement are generally going to do well because their homes have increased substantially in value and are fully paid off.

My wife's grandma (in her 80s, so not a recent retirement) lives high on the hog because the modest bungalo they purchased in Surrey, BC decades ago sold 5 years ago for close to a million.  She moved to small town Alberta where she bought a very nice house for less than $100k

There are problems with using your house as your retirement piggy-bank ... for one, it means banking on one asset class doing well as an investment, and if it doesn't you are screwed. Pity those in the US who were set to retire when the real estate market combusted.