There is a lot of talk right now regarding OAS after Prime Minister Harper spoke about potential changes on the horizon.
First of all, there are no changes announced yet and no OAS benefit changes will occur before 2020 or even 2025 finance minister Flaherty said last week. We know that it is somewhat inevitable. My thoughts are that it won’t impact current retirees or those close to retirement. Here are a few points discussed on the CBC News The National on February 7 2012:
•Economists are split on their opinion as to whether the existing OAS is sustainable the way it is right now.
•Life expectancy in the past 50 years has gone from 71 to 81.
•As 2030 approaches the baby boomers will start dying out.
•We have known about this demographic bulge for a long time.
•OAS as a percentage of GDP is about 3%.
•Now we have 4 workers for every retiree; in 20 years we will have just 2 workers for every retiree.
•The consensus of the panel is that it is better to look at the clawback threshholds rather than adjusting the OAS age from 65 to 67.
•OAS clawback begins at $67,668 and is fully clawd back at $110,123
The CBC panel also discussed RRSPs and TFSAs and the new PRPPs (Pooled Retirement Pension Plan) . They said it gets confusing for people with all the programs and they questioned whether the PRPP is useful at all. We already have enough programs if we want to save money.
Here is an article on the subject
and a video of the Feb 7 CBC National News debate on the subject
Here’s the latest. The budget watchdog says the current OAS is sustainable as it is.