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I recently turned 65. I will now be receiving a monthly OAS payment for the rest of my life, courtesy of the Canadian taxpayer. Current amount will be $550.99; it rises minimally by some inflation factor.
Should pay for an evening in club, no?
Should pay for an evening in club, no?
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24 comments
Like you, I plan to spend all my social security on strippers (and beer). And VH_Kicks, you have nothing to fear. When we old men spend our pensions (which we earned, by the way), it will stimulate the economy and increase employment, helping younger people to have a productive life. The economy is not a zero-sum game.
OAS = Old Age Security. All Canadian citizens receive this no earlier than age 65.
The other public pension scheme in Canada is called CPP, Canada Pension Plan. There is no taxpayer support for this plan. It is funded by check-offs from employee pay cheques and matching contributions from the employer. Payments can start at age 60 but with a penalty hit from what could be the maximum amount. Currently maximum amount payable at age 65 (if a person has the maximum career earnings) is about $1150/month. Payments can be deferred to as late as age 71, I think. Deferred payments will be higher than the figure I quoted.
The pool of money from employee and employer contributions is managed conservatively by an independent investment board. This pension scheme is completely independent of the federal government. The CPP is deemed sound by actuaries out to something like 2060.
The CPP investment fund is one of the largest pools of investable capital in the entire world.
Nothing like Norway's sovereign wealth fund though which just hit $1 trillion.
CPPIB fund is in the neighbourhood of $200 billion. It is invested world wide - real estate in New York and London; ports in Australia, toll roads in Europe. Didn't it just buy some ultra high end US retailer?
What is the largest pension fund in USA? I would guess....probably CalPERS?
Let's all move to Canada.
Welcome to the TUSCL's old farts club. Younger members think were're "past it...over the hill". What we may lack in youthful stamina we more than make up for in years of experience and enthusiasm when it comes to fully appreciating young, beautiful strippers.
Art, party on many more years.
And Happy Birthday too my friend.
I wish that Social Security was privately invested instead of being spent as part of the USA's general fund. On paper the federal government writes IOU's, but they're from the general fund back to Social Security. If that money had been invested in the private sector instead I'd be able to retire 5 years earlier than I'm going to retire because I'd have Social Security as part of my retirement income. Thieving politicians.
Yep, just brain-dead and part of the reason it's going broke. Canada and Norway (for example) actually make good returns on their government pension funds.
More interesting are its private equity positions (usually in partnership with a hedge fund. Two US retailers of note here - Macy's (debt financing) and Neiman-Marcus (equity position). $300mil invested in Skype turned into almost $1bil when CPPIB cashed out.
Best of all, for my money, are the investments world wide in infrastructure plays - power generation and transmission, pipelines, airports, bridges, toll roads, ports, export terminals, railroads, agricultural land, top quality commercial real estate. Investments like these are really just annuities, perfect for a long term investor like CPPIB.
And, of course, CPPIB has a huge bond portfolio.
CPPIB's investment goal is 4% real rate of return (6.3% considering Canada's inflation rate). Latest CPPIB 10 year average return - 6.2% (and that includes the 2008/2009 stock market meltdown).
I am shocked to hear that your US Social Security payroll contributions just go into the general revenue stream of the US Feds. No independent oversight of this huge pool of capital? If I were a young worker in USA today I would have very little expectation of Social Security payments in my retirement.
In the investment world, US Social Security would be called a Ponzi scheme.
That's effectively what happens. The social security trust fund is only allowed to buy treasuries, so money goes in, gets replaced by treasuries which loans it out the government, and then the treasuries collect interest and remained/rolled at maturity. Bonds were great investment back in 1981 or 2009, but not it's pretty debatable. (I've been in and out of treasury futures this year, but almost always on the short side.)
Of course, since the baby boom generation is bigger than the WWII generation, some money needs to come in that doesn't immediately go out. In USSS, this money goes into the trust fund, and it's put into US bonds.
Some economists are concerned that, if the US reduced it debt (fat chance), it would be a big problem finding investments for the trust fund. It would be very tricky to avoid creating bubbles in the chosen investments, given the amount of money involved.