

Seniors and the generation spending gap - kareemm
http://www.macleans.ca/society/life/seniors-and-the-generation-spending-gap/

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cldellow
My favourite bugbear: deferred property tax for seniors.

I've always thought that age was a fascinating element in these programs. Why
not just have programs for low-income people, full stop -- why make it low-
income seniors?

And then the logical followup: how are you financially vulnerable if you have
an asset worth hundreds of thousands of dollars?

Some jurisdictions in Canada do these programs better than others. My hometown
of Kitchener, Ontario requires that you be receiving the federal guaranteed
income suppement (given to all retired folk below a certain income threshold)
before they let you defer your property taxes. The province of British
Columbia will defer property taxes for anyone over age 55. If I lived in BC, I
would certainly choose to defer property tax, with interest assessed at
1%/year, and invest the deferred tax in the market. In fact, I might invest
the difference in BC bonds -- which pay 3.4%/year. What a sham for the
taxpayer.

~~~
sliverstorm
_how are you financially vulnerable if you have an asset worth hundreds of
thousands of dollars?_

Easy. Yes you have a hard asset, but you have largely spent the most valuable
assets you have- your strong back, free time, and good health.

The 21-year-old might be pennyless, but his assets are worth quite a bit more
than $100k in cash, _and_ they keep pace with inflation...

~~~
JamesBarney
If his assets keep pace with inflation then how does he end up needing
assistance when he's 55?

I'm all for government being involved in retirement because shit happens.
hould the upper middle class person in a 600k house be given more then his
brother who rents? If we have government funded retirement(which I'm all for)
why should some of it be dependent and proportional to the amount of house one
owns.

~~~
jacquesm
> If his assets keep pace with inflation then how does he end up needing
> assistance when he's 55?

Usually by over-spending during the times when it seems as if income will
never end.

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fra
The more I read about this, the more I think that what we're facing in North
America isn't class war, it's "generation" war.

By "Limited Government" the baby-boomers backed republican party means "screw
schools & food stamps, but hands off my medicare!".

~~~
bequanna
Well, some might argue that even the liberal agenda in the US heavily favors
the boomers (at the expense of our youth).

-As a 'millennial' I am now legally required to subsidize health care for boomers

-The Federal Gov't recently raised rates on already massively profitable student loans, yet has no problem losing Billions guaranteeing NINJA boomer loans for McMansions.

-I live in what would be considered a fairly liberal area. However, the median age is above the US average. School funding referendums fail by a wide margin here.

There are certainly exceptions, but, generally, I sense that boomers have
little respect or regard for our generation (millennials).

~~~
vacri
Don't worry, when you're 50, you'll have the political power to strip wealth
from the young as well. It's nothing specific to boomers vs millenials, it's
just the way of the world. Older people have political power, because they
have a lifetime of networking, along with personal wealth accreted over that
time.

Or, in simpler terms, when has there ever not been a "young people these
days!" comment?

~~~
guard-of-terra
It may happen that there won't be much young to strip wealth from. Current
generation gets their pensions, we'll get nothing.

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jrapdx3
There is huge liability in living to be old. Sure, work hard, save money for
old age, and get old, there's a stash of funds.

But even a million bucks has got to last the rest of your life, and who knows,
my aunt is 100 years old, and still going. Retire at, let's say 70, and figure
it out, will that stash last up to 30 years?

Do the math, taking out taxes at 25%, that's $25000/year. With social
security, around $4000/month, just an estimate. How wealthy is that? Is it
really even adequate?

Consider what happens with age: people get sick, bodies deteriorate, it's
natural. Go to the ER, have an MRI, a hospital stay, whatever, it can be
thousands out of pocket, even with medicare + insurance.

With serious illness, that million bucks can go fast. And even if there is
good health care to be found, which is dubious, it's still scary and a
constantly threatening reality.

Don't forget the house payments, computer gear and all the other normal stuff
one needs to buy. If the house is paid up, chances are it's an old house and
will need repair. Price out what a new roof or furnace costs (I've had to
replace both in the last couple of years).

OK I'm old but I still go to work, though I can't do that forever. Call it
what you will, I have a wealth of experience, accomplishment, family and great
friends, but not a princely cache of money. Many old citizens are in a far
more precarious position as financial security goes. I hope no one thinks it's
a trivial concern.

~~~
bequanna
I'm not quite sure I follow your logic.

Are you saying that as a young graduate student, I should incur more debt to
train for a career, then, pay higher (unsubsidized) interest rates on that
debt, and pay higher taxes once I get a job in order to bolster the income of
someone who (in your example) is already a millionaire?

djokkataja is right. You will have a very difficult time gaining the sympathy
of younger generations with that argument.

~~~
jrapdx3
Frankly, IMO the student loan situation is as big a mess as any we have in our
nation. It is outrageous that it costs $40000 a year to attend college. It
saddens and sickens me to know that is the case.

It represents a skew in our priorities perhaps the same as seen in other
domains, thinking about health care in particular. The mistaken idea is that
we save money by skimping on essentials. The only way to navigate toward
solving problems is to see the whole picture, the impact on the entire system
has to be known.

The least expensive health care is providing high quality services to the
extent people need. The cost to the nation of untreated illness is greater
than the expense of treatment, considering the whole cost burden of illness.

Same in education. Encouraging education that permits maximum accomplishment
provides a net benefit to the nation as a whole. Under-education impedes
productivity, technological innovation, and even contributes to health care
costs indirectly.

When I was in school and reliant on loans, the government program asked for
"feedback", what I thought would improve the student loan program. I wrote on
the form, for the price of one military jet, a thousand students could be
fully supported for as long as required. AFAICT my comment had no effect.

So no, I'm not asking you to support me as long as my million bucks holds out.
With any luck (my luck), you won't ever have to. But there are quite a few old
citizens not as lucky as me who we should try to support.

And BTW, I may be old, but I am _still_ a taxpayer. Retirement account
withdrawals are federally taxable, so I'm guessing that would be roughly
$7000/year. That's my money, saved out of what I earned.

Some of my tax payments may go to support you or your school. It's OK, I do
believe mutual support when necessary is we should be aiming for.

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michaelochurch
First of all, when I'm old please don't call me a "senior". Call me "old".
There's no shame in it, and nothing wrong with the word.

From the OP: _Why are we doing so much to try to help seniors when they’re
already the wealthiest generation in history?_

At least in the U.S., it's because they're politically active. They vote. They
mobilize. They demand services, for the tax dollars they've paid when young
and that they are paying now.

Invert the question: why _don 't_ young people demand much of their
government? Why do we seem to be content with a system (and this goes beyond
government, into the workplace) that costs so much and delivers so little? Why
are we OK with high housing costs and stagnant wages? Why don't we demand the
government to step in on airlines' sleazy dynamic pricing games, where a
person using a different device to book the same flight at the same time pays
a different fare? How come, when we're paying tax rates well over 30%, we
don't have universal healthcare, and even if we're insured we still get crappy
medical care and coverage? Why do we tolerate that? Why haven't we unionized
or formed professional associations in software?

Here's the answer. The critical difference between young and old is that the
old people _know_ their financial situations aren't going to dramatically
improve. An old person of average financial outcome has no delusions that
he'll be a tech billionaire in 3 years if he can just save up for his move to
the Valley. Young people haven't figured that out yet, and still believe that
they can beat the astronomical odds against them, and therefore tend
reflexively to identify with the rich.

The plight of the young can be ignored because the young haven't figured out
yet how badly most of them are going to lose, and that political activism
(again, perhaps in the form of workplace collective bargaining instead of
electoral canvassing) is essential to keeping them afloat.

~~~
morgante
Spot on. Thanks to Lake Wobegon syndrome, American youth inevitably think
they'll end up on the rich side. By the time they're seniors, the veil of
ignorance that fades.

Reminds me of the quote from John Steinbeck that Americans are never poor,
they're just temporarily inconvenienced millionaires. I guess that by the time
you're 60 you realize that those millions are never coming.

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rcarrigan87
Does anyone have US numbers for the stats cited in this article?

Side note: while this article paints seniors as maybe getting more than they
deserve, financial elder abuse is a huge problem already in the US. Articles
like this worry me because some may twist the points to justify stealing. Rich
or not, it's very easy to take advantage of the elderly. I've seen family
members, caregivers, family lawyers, etc. do terrible things for money. It's
sad.

~~~
KrisAndrew
Just a guess, but it's probably a similar situation in the US when the same
cohort is compared to their ancestors. My mom (66 years old) is certainly way
better off than her mother was at 66+. My friends' parents seem to be
similarly comfortable in their golden years. Post-WWII largesse really paid
off for them, but who's really going to pay for it?

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t1m
The article is about well off seniors in Canada.

I wonder if the situation is much different in the US. The health care system
is certainly different. One gets the impression the system in the US preys on
seniors as employer benefits evaporate after retirement while insurance
premiums skyrocket or are denied because of 'pre-existing conditions'.

~~~
michaelochurch
Medicare becomes available at 65. It gets a bad rap, but it's actually better
than the vast majority of private insurance policies.

Still, your observation is accurate and poignant. The whole purpose of private
health insurance is to rob those who are easiest to rob (the old and sick).
The problem is that old, sick people tend not to have a lot of money. So, the
"genius" behind U.S.-style health insurance is that you can take money from
people when young and well (and relatively wealthy) and then fail to deliver
the promised services (on bullshit technicalities like "exclusions" and "pre-
existing conditions" and "fuck you, you won't sue me because ha ha you have
cancer and will be dead before trial date") in their hour of need, when they
are too exhausted to fight back.

If U.S.-style medical billing and insurance were pulled on anyone _but_ the
sick they would be met with Joe Stack levels of violence on a daily basis.

~~~
ericd
Anecdotal, but my doctor agrees wrt medicare - medicare is actually nicer to
deal with than any of the big private guys, and actually pays claims without
requiring hassling. She says that medicaid is a disaster to deal with, though
(I think that one is state-run).

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Htsthbjig
Wow!: “But they shouldn’t expect to be subsidized by the poor.”

Something is very clear: politicians always want more, and more and more. They
never have enough taxes.

"Thanks to stock market booms, economic growth, a soaring real estate market
and a major expansion in both private and government pension plans"

I don't know Canada, but here in Europe pensions are shrinking, and stock
market is a bubble that will pop when interest types rise, and they will
soon(they are unsustainable now).

I am young and the only thing I need is freedom, economic freedom included,
let bubbles burst so we could acquire our houses and cars at the right price.
They let it only go up, then they try to sustain it artificially injecting
public money in banks and making "bad banks"also public.

Politicians and taxes are the problem, not the solution.

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transfire
Don't worry, they'll get it all straightened out and start giving more to
young than the old when I finally become a senior.

