Former Bank of Canada governor David Dodge hit new levels of obnoxious with his statement a couple of weeks ago that Canadians should be squirreling more away for their retirements.
For the record, Dodge is absolutely correct in his belief that we need to be socking away 10 to 21 per cent of our pre-tax earnings from the age of 35 for a comfortable retirement. He boasted the findings of the C.D. Howe Institute are a “reality check” for Canadians.
Well, let’s offer Mr. Dodge a reality check for him to ponder.
Perhaps it’s difficult for him to comprehend, but many Canadians are concerned with their financial health right now and don’t need to be reading between the lines of his statement that they are somehow squandering their incomes.
Whatever income level Dodge himself is at, and it’s safe to assume that it’s considerably more than most Canadians, perhaps he should consider that incomes aren’t growing quickly enough to deal with what’s coming down the pipe in the very near future.
In an industry such as golf, where many of us are self-employed and/or on contract work without any defined pension plans or benefits, our savings just got dinged big time during the recession and, even though we’re starting to crawl out of that hole, there are a few new nasty realities facing us.
In British Columbia and Ontario, we’ve got the HST coming on July 1 when we will have to start charging seven and eight per cent, respectively, on our transactions, conceivably meaning that business will slow as a result. Add to that the fact that we will be paying the HST on a wider range of goods and services.
And don’t think the HST will be limited to those two provinces as time goes on either.
Just last week, the CRTC got obnoxious as well when it said that Canadian cable subscribers would just shrug off another rate increase as a result of cable giants such as Rogers and Shaw paying television stations for their signals, this despite the average cable bill rising nearly 50 per cent since 2002.
Of course, that’s a similar attitude taken by politicians at the municipal, provincial or federal levels when they announce “small increases” in services, but when you add them all up from across the government spectrum, the final total is anything but paltry and it keeps on coming.
It was also announced recently that Canada’s core inflation rate rose faster than expected by the Bank of Canada, which not only means you’ll be paying more for necessities, but it will also likely mean a rise in interest rates.
These are just a few examples of what’s eating away at our paycheques and even a suggestion that we are being irresponsible in respect to our savings is annoying.
So Dodge is correct, but badly out of touch with many Canadians, which sets up the real concern of a crisis as the baby boomers start reaching the traditional retirement age of 65, one that may not be realistic anymore depending on the health of each individual.
That brings us to our latest GNN Poll.
- Do you feel you can afford to retire comfortably when you turn 65?
Be sure to cast your vote on the GNN Poll on the home page or expand your thoughts below or in the GNN Forum.