Does it pay never to work a day in the life? Save no money. Have no marketable assets. Yes and no. It does depend on the lifestyle one is accustomed to. It would be pushing “voluntary simplicity” to an extreme level and although it is possible to live in North America for $12,000 year, the effort required may be beyond the energy level of seniors. From the Financial Post:
While financial advisors would be skeptical about a strategy of relying solely on government pensions in retirement, the fact is a senior Canadian couple who have never worked a day in their lives or saved a penny would qualify for more than $24,000 a year, much of it tax-free and indexed to the cost of living….
…The main trick to achieving this is collecting Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). You just have to reach 65 and meet the minimum Canadian residency requirements….
…GIS is entirely tax-free while OAS is taxable but minimally so for those in low tax brackets. For single seniors, the maximum monthly OAS benefit is $533.70 and maximum GIS benefit is $723.65, according to Service Canada. That adds up to more than $15,000 a year for singles but it doesn’t follow that senior couples get double that….
While this does sound like a princely sum given the absence of contribution on the art of the beneficiaries, it should be remembered that the entire amount will likely be spent on food and shelter. Rental income in particular can be regarded as a transfer of money from poor to rich subsidized by the government. Effectively, the poverty industry at state level, uses the plight of the poor to put money in the hands of those servicing their needs.
…Perhaps on the theory two can live as cheaply as one, married or common-law couples who are both pensioners with no other sources of income qualify for a maximum combined OAS/GIS benefit of $1,013.54 a month each — or $24,325 a year between them. These figures include the GIS top-up promised in the March federal budget: effective July 1st, an extra $600 for the poorest single seniors and an extra $840 for couples.
Not bad if you never worked or saved. Read More:http://www.financialpost.com/personal-finance/retire/Theres+still+hope+havent+saved+penny/5212859/story.html
However, the more you receive in CPP, the less you get in GIS. A senior couple would get $31,000 a year in CPP and OAS, according to Tridelta Financial. If you have a good employer pension and a large RRSP, you may even see OAS benefits clawed back. In the event of the death of one spouse, the other gets maximum CPP survivor benefits of $576/month ($529 if survivor is under 65). The disabled get more: maximum CPP disability benefit in 2011 is $1,153.37/month….
…Generally, those who worked most of their lives can count on CPP and OAS but little or no GIS. Those who were never in the workforce — perhaps widowed former homemakers — get little or no CPP but may qualify for maximum GIS along with OAS. They may also qualify for various provincial top-up programs similar to the GIS, such as Ontario’s GAINS (Guaranteed Annual Income System).
Most of the Western governments have been engaged in a ‘free lunch’ mentality where they give the voters more in benefits than they collect in taxes. Eventually, that doesn’t work any more. And then, because nobody told them that it must end sometime, when it does, they get very, very angry.
The other option is the riskier option of being a “citizen of convenience” living abroad in lower cost warmer and rural or semi-rural regions and using Canada as a cash cow and insurance policy in case of local strife, revolution, etc.:
Dual citizenship occurs when a person is the citizen of more than one country. Canadian law permits this, but not all other countries legally recognize dual citizenship with Canada. Debates over dual citizenship in Canada have been the object of increased attention since the evacuation of Canadian citizens from Lebanon in the summer of 2006. It has been contended that these purportedly long time Lebanese residents used Canada as a temporary haven and invoked their Canadian citizenship so as to call upon the government of Canada to fulfill its obligations to rescue them. The issues raised by the evacuation have since evolved and become intertwined with debates around immigrant integration and multiculturalism. Some have contended that dual citizenship invites dual loyalties and by consequence undercuts one’s sense of belonging to Canada. Hence the Governor-General and the Leader of the opposition in the House of Commons were called upon by significant segments of the population to renounce their French citizenship in order to discourage such practice. Read More:http://www.acs-aec.ca/pdf/polls/11896243057100.pdf
…nor has taking on the passport of another nation required an existing Canadian citizen to relinquish their Canadian passport. Over 500,000 Canadians living in Canada currently hold more than one passport, along with a great many Canadians living overseas.
Recent events surrounding this latter group have led some to call the dual (or multiple) citizenship policy into question. During the recent conflict in Lebanon, the Canadian Forces evacuated 15,000 Canadian passport holders at a cost of some $85 million. Many of these evacuees have since returned to Lebanon after the situation there became more secure. This has led some to suggest that we are mistaken to use Canadian tax dollars for services to those who may have left Canada behind for life elsewhere….
…While there are costs to allowing Canadians to hold other passports, they are outweighed by the benefits.
Globalization has made the Canadian economy more and more dependant on expanding trade relations.Read More:http://www.migratenow.ca/articles/19.asp
One of the biggest criticisms following the Lebanon evacuation was the $85 million cost to taxpayers, particularly when nearly half the evacuees returned to Lebanon immediately after tensions settled, raising questions about the rights of dual citizens and Canada’s responsibility towards them. Unlike the Lebanon situation, Di Nino said there’s really no need to subsidize the voluntary evacuation from Egypt. “In a wartime situation, I think we have to ask ourselves what is most important and I’d say let’s get our people out of there. This is not anywhere close,” he said. Di Nino’s report found many Canadians in Lebanon hadn’t registered with the embassy. Others at home and abroad had trouble accessing timely information on the crisis situation and Canada’s evacuation plans. Just 1,200 of the estimated 6,500 Canadians in Egypt have registered with the Canadian Embassy and “technical glitches” hampered communications over the weekend between Canadians and consular officials, suggesting some things haven’t quite been rectified. Read More:http://communities.canada.com/shareit/blogs/politics/archive/2011/02/01/a-comparison-of-crises-egypt-2011-vs-lebanon-2006.aspx
David Rosenberg:Plain-vanilla, garden-variety business expansions and contractions that are influenced by the manufacturing inventory cycle tend to have recessions separated between five and 10 years apart. That was certainly the experience that economists came to understand and appreciate in the post-WWII era. But in balance sheet cycles, which involve deleveraging, rising savings rates and asset deflation, recoveries are fragile and susceptible to the smallest of shocks and typically, recessions occur every two to three years. This puts a recession by 2012 squarely in the spotlight.
I have already pegged a U.S. recession as a virtual certainty, and respected economists like Martin Feldstein in recent days stated the odds were 50-50 and Larry Summers is at 1-in-3. I am fairly certain that Paul Krugman is close to where I am on this file. All that said, recession risks are rising and until we receive another positive policy shock from the Fed, these risks will remain acute for some time yet. We are replaying the summer of 2010 but only when the white knights of radical monetary and fiscal stimulus resurfaced did the “double dip” chatter subside and give way towards renewed growth and risk appetite — at least for a few months. Read More:http://business.financialpost.com/2011/08/09/how-to-prepare-for-the-coming-recession-rosenberg/