Saving for retirement may seem like a tomorrow problem, but for many, it’s a right-now issue they’re dealing with every day.
But the Government of Canada is making it easier to save and access financial benefits for seniors.
Canada’s first minister of seniors met with Kelowna-Lake Country MP Stephen Fuhr and members of the Probus Club of Kelowna-Ogopogo at the Sunset Waterfront Resort on Thursday afternoon to discuss the government’s accomplishments and seek input about where to focus in the future.
“Since my appointment, the prime minister has made it very clear that he wanted me to consult and engage with Canadians so as we move forward we can build on the record that we have on this very important file,” Seniors Minister Filomena Tassi said.
“Canadians are living for longer periods of times and that’s why investments into the Canadian Pension Plan (CPP) and ensuring that moving forward we’re increasing CPP, so in years ahead there is up to a 50 per cent increase in retirement security,” Tassi said.
The government has rolled back eligibility for Guaranteed Income Supplement (GIS) and Old Age Security (OAS) from 67 to 65 and Fuhr said that’s an additional estimated $13,000 a year for seniors.
This rollback of OAS and GIS access has prevented 100,000 seniors from falling into poverty, the minister said, adding the GIS has been increased for the most vulnerable single seniors.
“This had a positive impact on 900,000 seniors and lifted 57,000 seniors out of poverty,” Tassi said.
“If we have a senior that wants to continue working, we want to encourage them to work. Not so they have to be financially secure, but because they want to stay connected to the community and they want to continue working,” Tassi said. “If that’s the case, we know we benefit because of the experience they bring. Seniors have that experience we want to pass on.”
To incentivize this, the Canadian government boosted the GIS exemption from $3,500 to $5,000 a year.
Applications to access benefits including GIS and OAS have been streamlined with the introduction of an auto-enrolment program, Tassi said.
“This stems from if seniors are entitled to benefits, we want them to receive those benefits,” she said. “We don’t want seniors not receiving benefits simply because they don’t know about those benefits. We want to make it easier.”
The Probus club’s charter president Catherine Comben, whose background is in the financial industry, suggested the government also examine the potential of raising the limit of Tax Free Savings Accounts (TFSA), lower the percentage of Registered Retirement Income Fund (RRIF) withdrawals for seniors in “those later years” and exempting taxes on health-related activities to encourage more participation.
The federal budget for 2019 allows for investment into an annuity, Tassi said.
“You can invest in a deferred annuity where you can put up to 25 per cent of eligible earnings, I think there’s a limit of $125,000, but you can set that aside and you don’t have to start withdrawing that until you’re 85.”
“At least that provides some relief,” she said. “It helps seniors plan for years ahead, understanding that seniors are living longer.”