In his recent newsletter, financial planner Kurt Rosentreter explains why 30-year old Canadians are, financially speaking, screwed. One reason for the dismal outlook is simply the way things are today what with traditional pensions disappearing and home prices as high as they are. But the main reason, according to Mr. Rosentreter, is the way today’s 30-year olds are playing the hand they are dealt: being totally clueless when it comes to spending, taking on monster debt loads at today’s low, low interest rates and saving little or nothing despite not having a pension.

Today’s 50 year old will make it – they are the last generation to get in before the big mortgages hit and they may still get inheritances from their financially responsible, recession era parents who will die in the next 20 years, providing money for their retirement thankfully. It’s today’s 30 year olds who will be 50 in twenty years that are screwed. With little hope of being debt free in 20 years, with a bad attitude towards savings and debt elimination, with rising costs of children’s education, no pensions coming, frequent career change, wild stock markets, record low interest rates and longer and longer life with rising health care costs, today’s 30 year olds need to win the lotto to have a hope of achieving their financial retirement as culturally expected in Canada. Working to age 70, albeit part time, may become the norm for many in the next twenty years.

I would add one more point to Mr. Rosentreter’s list on why 30-year olds are screwed. The effect of retiring Baby Boomers on public finances is going to be akin to a swarm of locusts moving through a field of crops. Today’s retirees can count on receiving benefits from Old Age Security and Canada Pension Plan. 30-year olds have no such assurance and may find that they are left to fend for themselves.

This article has 69 comments

  1. Oh sh** ….

  2. On the bright side, we (speaking as a 29 year old) will soon enough have the pick of any jobs we want!

  3. Charles in Vancouver

    So if I’m turning 29 this month and I have zero debt, I may as well be rich? 😉

  4. In addition to all those valid points above, I’m more worried about the future tax rates that us 30ish people will have to pay to take care of the old non-working class of baby boomers that as RobG says, will all be retiring. We’ll have less tax payers and heavy taxes against us to boot. Woohoo?

  5. All of this scare mongering assumes that everything continues moving as status quo. The wildcard in the equation is immigration and full participation in the economy by the First Nations.

    There are places around the world including our First Nations communities which have a very young demographic but our existing government policies do nothing to integrate any of these human resources into our economy. Government typically doesn’t do anything until the problem goes critical – but it will eventually be forced to work on it.

  6. As a person in his thirties, it’s depressing to start the day early on such news especially when a rainy day is expected today. bummer…

  7. I’m 26, so I’m even more screwed. Thanks Debbie Downers!

  8. I’m 35, Mrs. SPF is 26. We have pension plans with our employer. We also have a “large” mortgage but even that is not 2x our combined take home. We pay off dept rabidly and still find a way to max out our TFSAs and the extra goes into RRSPs. I think there is a generalization here that fails to recognize some of us aren’t totally inept.

  9. Pretty good sales pitch, but that’s about all.

    Are boomers any better prepared? Is working past 65, lagging or dying pension plans, ailing health, need to support poor children in their 30’s mean that the previous generation wasn’t screwed? To take metrics like $100/month on cell phone bills is meaningless without comparison. Maybe our parents were blowing $25/month on LPs, inflation adjusted, about the same.

    Mortgages may be larger, but a 30 yr old with a 35 year mortgage will still pay it off by 65, last time I checked, the majority of mortgagees were not 30 year olds, they are people approaching retirement and they have NOT paid off their debt.

    30 year olds and boomers are both exposed to interest rate risk.

    Changing careers doesn’t equal salary stagnation, in many industries, pay raises come along/after your 3-5 year stint at the previous company. I know people who have gotten 10-40% raises every 3 years simply by changing companies within the same industry, doing exactly the same job!

    Using anecdotes to suggest 30 year olds need help with their finances is ridiculous. What I think Mr. Rosentreter sees is not a demographic sorely of need, but a demographic he sorely needs to make money from.

  10. Mr. Rosentreter is right, but CC is right that it won’t be limited to 30 year olds. Excluding those with indexed pensions, very few (I’d say less than than 15%) have saved anywhere near enough to retire they way they expect. I would think readers of this blog have a slightly greater interest in saving and financial health and thus will show greater participation in the 15%, but make no mistake, the vast majority are screwed.

    People think a secure leasurely retirement at 65 is nothing less than a right – it is not. It is an expensive privilege.

    A big generational conflict is coming people, and seniors are who typically votes so be careful.

  11. Sampson: one of the trends a mortage broker told me was the refinancing problem. People have a 25-year mortgage, but every renewal they increase the capital owed for vacations/cars/other luxuries. That is not sustainable and will lead to 65-years-old people with huge mortgage. Life will suck when they’ll realize they have to widthdraw from money from their RRSP and take a tax hit just to pay down that debt.

    Otherwise, as a 29 y/o, most of my friends can expect quite a large inheritance, such as an at least partially paid off family house. I don’t think the 50-somethings are in that much trouble, the only problem for us is the idea of being fewer active workers to support more retired people, and their related health care costs. That is where our money will go in the next 25 years.

  12. Certainly people continue extending mortgages to pay for their lives, but is their actually data that shows young ‘ens do this more frequently than boomers?

    While I agree that we (I’m 32) will be paying for the older gen’s health and other retirement costs, certainly boomers felt/feel the same crunch. Lifespan has increased a good 15 years since the 80’s so they were already paying for their parents and grandparents.

    I don’t fully disagree that ppl in their 30’s need to get their act together, but the arguments don’t hold anymore weight for our generation than they do for any other. Evidence, that what this fellow needs, not speculation.

    Might as well start targeting my kid’s generation, they’ll be even more screwed than us, wait, they ain’t got no money.

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  14. I agree with Sampson, this sounds a lot like “kids these days” when in fact the baby boomers faced (or are still facing) their own financial challenges of borrowing too much and not saving enough. I’ll add that as life expectancy increases, working an extra few years will not seem like such a big deal.

  15. CC- the assumption you make is that Generation Y will vote for politicians who will continue to support program which do not benefit them. Democracy is an effective system to allot money to those who vote. As a generation who is numerically larger than the baby-boomers, what makes one think they will not throw their generational seniors under the bus as the baby-boomers have thrown education and fiscal prudence for the future under the bus?

  16. @Sampson: While I agree that anecdotes don’t make statistics, we do hear about some worrying trends such as the high proportion of new home buyers opting for the longest amortization mortgages and only able to afford a home at today’s low, low rates. Many of them have taken on monster mortgages already and would become vulnerable should rates rise.

    I personally think pensions are the big reason why young people are screwed. Outside of the public sector hardly anyone has a pension these days. That means young people today should be (a) saving for retirement on their own and (b) investing their savings wisely. Many fail (a) and many savers fail (b). This didn’t apply to the boomers to the same extent. More of them have pensions compared to younger Canadians.

  17. Still begets the question, does our Gen have less savings, or are we capable of saving less in the future than the previous Gen.

    I’ll be honest, most of my peers are not doing well, many are doing excellent, but aside from not having a mortgage or children as early as our parents, I don’t know that we have less money. Most of my friends’ parents didn’t start saving until their 40-50’s so we are on par still.

    The pension issue is a big one, and how much more of a hole will we have to dig them out of. In fact, I don’t know many boomers with good/stable pensions now anyway?

  18. Who says our generation needs to remain in Canada, during our working years or into retirement?

  19. Maybe I am exposed to the wrong group of 30 year olds but they do seem to be different. They seem to feel that every high end toy is a necessity rather then a “want”.
    They won’t save to make a purchase. Just put in on some high interest credit card. Then bills pile up then they never get out of the cycle of debt. Schools have to prepare kids better starting at a young age. People simply have to learn to live within their means.

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  22. I agree with Sampson – sure, changes in demographics will mean that some generations will have it better than others, but it’s not like the boomers will be rolling in dough and the Gen Ys will all be dirt poor. I think the differences will be a lot smaller than that, and I think that the action of the individual will determine their financial lot in life a lot more than which generation they happen to belong to.

    As for the prospect of living longer and having to work a bit to support the longer retirement, would you prefer the alternative? 😉

    P.S. – I haven’t been able to access your site (or MoneySense or Cdn Bus) for the last month while at work.

  23. If I had a nickel for every time I heard “I dont need to save, I will just live off government benefits when I retire” I would be, well, set for retirement.
    ps. I work in a bank

  24. I agree with my namesake (Paul N), since I’ve found a lot of people my age (33) tend to expect the best and didn’t want to wait for it. No saving before buying.

    First apartments are large 2-bedrooms, fully furnished with new furniture and huge LCD TV, with HD, of couse. I’m not immune to the attraction of living better, but I know I’m not nearly the spender most people my age are. And when people get used to owing money on a car, a TV and furniture, taking on a big mortgage isn’t nearly as scary as it should be.

  25. As a 30-something, I think our generation could be in for a world of hurt in another 10 years. Those that continue to save and pay down their mortgage, will be fine. Come age 55 or 60, today’s 30-year old with a large mortgage and lots of debt hopefully won’t have any and thus, shouldn’t have any trouble retiring. Those that still have a large mortgage at 55 or 60, are in very big trouble.

    This isn’t really any different than folks in their 50s and 60s now, other than the fact that “savers” are “investors” are not rewarded in this low-interest rate environment. My parents learned the hard way when interest rates rose and went through the roof, they almost lost their house. Later in life, they were forced to save. Luckily they had DB pensions, otherwise, they would be in poverty.

    @Paul N

    I would argue there are a few folks in their 30s who know ‘wants’ from ‘needs’. Our house needs a new roof, that’s not what we want but it’s what we need. We drive 10-year old cars. We don’t own iPhones or iPads and we clip coupons for groceries. We never take a trip without having the cash to pay it off.
    Other than our mortgage, we have no debt.

    Not all 30-somethings, nor 50- or 60-somethings for that matter, are created equal.

  26. To sum up an accurate stereotype, baby boomers are spoiled, and their children are even more spoiled. It’s an “I want it all and I want it now” attitude.
    PS: I am a baby boomer but am the exception to the above stereotype. Most of my aquaintances fit the stereotyope in their money squandering habits.

  27. Many of my friends are first time home buyers and although I’d consider them middle class 55k earners, their houses are 500-700K mortgages and they all seem to come with Audis (ok I’m sterotyping). Many of their decisions are exactly as pointed out in the article, where costs are “justified” by the individuals based on current “needs”.

    We are a generation stretched on easy credit. I’m not talking about the people who read this website, I’m talking about the majority of GenXY,Y.

    Sadly, the only thing that I believe will change minds is when (if) people start to struggle making payments. Even after that, we all seem to forget the past quite easily… (see 2008 crisis), esp in Canada.

  28. I know this sort of view plays right up the alley of personal finance fans (i.e. I make $800,000 a year but live in a cardboard box that I bought with 95% down and drive a 15 year old Honda Civic, because I’m more virtuous than my spendthrift friends) – but I’m fairly certain it doesn’t reflect reality for a majority of Canadians. He’s taking an arch-stereotype and generalizing it to young Canadians as a group. I mean, seriously, how many people do you know who have gone on $20,000 vacations or regularly pay $300 for shoes?

    “No one has pensions anymore.” Really? I’m not quite sure it’s accurate to state that pension coverage has declined to zero.

    “Canada is now full of monster levels of mortgage debt for the average Canadian all financed at floating 1% mortgage rates…” Leaving aside the fact that a majority of Canadians have fixed rate mortgages, how many people have variable rates set at 1% at the moment? No one!

    There are many more examples, but this is simply fear mongering, filled with hyperbole and overgeneralizations. All of this talk about how Canadians are going to have much poorer retirements than their parents and grandparents is ridiculous. The rate of senior poverty was very very high a generation ago – now it’s about 6%.

    Finally, CC, this has popped up before on your blog, but the idea that the CPP may not be around in a few decades is suspect, especially since the CPP has been found to be actuarially sound for the next 70 years.

  29. @Al R: With today’s contribution rates and benefit structure, I agree that CPP is solid. What I worry about is the temptation for a future Government to tap into the big pot of money that is the CPP. It’s not easy to do considering that the provinces have to agree to changes but in discussions about retirement security, suggestions to increase CPP benefits pops up. These suggestions often claim that CPP benefits can be increased without a commensurate increase in contribution rates.

    I also have to add that the 30-year olds I know are not as spendthrift as the ones described in the newsletter. It is possible that Mr. Rosentreter’s selection set is biased because only spendthrift 30-year olds in trouble seek him out. I’d love to see some solid statistics. Hopefully we’ll see Stats Can put out its Survey of Financial Security soon.

    @MoneySmartsBlog: I found the same problem with all Rogers sites. I’m told it is fixed now.

  30. I’m disappointed that you bother to post this sort of unthoughtful diatribe. Sorry to be harsh but I expect much better from this blog.

    Where to begin? Besides the gross generalizations of 20-30 yearolds as lazy, entitled, and irresponsible, the article is chock-full with misplaced assumptions and conclusions. I won’t bother to point them all out–they are blatantly obvious–but some that I find particularly humorous:

    – His value judgments about people leasing a car, spending $20,000 on a vacation, $300 on shoes, but especially a couple earning a six figure salary paying $500 a year for lawn care. Why does it matter how much people choose to spend on their shoes? It’s irrelevant–so long as they are doing everything else they are supposed to be doing. The lawn care is especially hilarious because I think most people with that salary would view it as a justified expense. He would have all of those making $100,000+ a year living in a cardboard box, collecting coupons, and driving a 20 year old Honda Civic.
    – His complaint about switching jobs or careers, then attributing it to, wait for it, restlessness. Please. Apart form being wrong about people’s motive for switching jobs or careers, which is typically money (but might be something like being better fulfilled, which is equally valuable), he blatantly demonstrates his obvious bias against young people.
    – His talk about prices of $500,000 for a house being prices that 20 years ago were considered only available for the wealthy. Someone needs to verse this CA on inflation. Other than that people are of course going to adjust our expectation of living, as people have in other major cities all around the world, as our cities become more and more dense. That is normal and expected, and especially not cause for concern.
    – His complaint that people won’t be able to retire at 60. No kidding they won’t. Because people live to 80 or 90 now, sometimes having a retired life longer than their working life. Of course people are going to have to work later if they are living later and retiring longer. That is the inevitable result of increased life expectations.

    As for all the people worried about the younger generation supporting the retiring boomers, there will no doubt be a generational conflict at hand, but the fix will be a political one–I don’t think the younger shift will accept that they must endure years of heavy taxes to prop up those retirees who have failed to save enough to support themselves. This is a burden that will be shared by the whole of our society–not just the young or the old.

    I give this articles a F– that’s a Fail for Kurt. And hope that CC shares some more thoughtful pieces in the future rather than this sensationalist garbage.

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  34. @CC – There’s always a chance that Governments will decide to screw around with the CPP, but IMO, it would be very unlikely. The risk is likely as you describe it – that there would be a temptation to increase benefits in the short run without fully funding the program.

    The friction I’ve seen in the CPP debate comes from the employer side strongly opposing any increase in payroll taxes. The CFIB, for instance, is militantly against any sort of increase that would be partially funded by employers.

    Great work overall – love your blog.

  35. Why are people so afraid of having to work when they are 70? It can’t be that bad. If you wanted to not work by then you’d save. Easy as that.

  36. You may look at retirement differently if your were stuck in dreary dead end jobs for 40 years. Somehow you may think there is this magical pension rainbow waiting for you from the government.

    Then you hit reality. Sometimes your vision of retirement is something very different. Working at 70 at an enjoyable job or business you love would not be so bad. But many unfortunately are not in that position. (and probably don’t surf financial sites like this either).

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  38. 30 year olds may at least benefit from some cheaper mortgages in the near future if the Canadian housing bubble bursts. Assuming of course that they don’t buy just before it bursts…

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  40. This is a generic comment, but the 30 year olds are really the first generation who grew up around computers their whole life. They have been trained to expect instant gratification and haven’t really learned paitence or doing without. This will affect their spending habbits as they continue to spend/buy things before they should…getting that BMW or whatever while still carrying large debt with no savings. You can either be rich or look rich, very seldom do you get both.

  41. The scary part is that the next generation will be even worse. I’m generalizing here, but from what I’ve seen, today’s kids and teenagers will be even worse 30 year olds than today’s 30 year olds.

  42. Hi Kids…this guy is full of it…1st job in the 70’s($3 per hr) ,1st home 80’s (14.6%)…trust me,if your 30 now , with low rates you have it made, just use your rsp/tfsa, you will be fine

  43. @ dj – in the 80s with the high rates… how many houses were dual-income houses? In other words, how many people did it take to pay for one house? I was born in 1975 and I think the number of women who worked was probably 1 in 15 houses. Today I don’t know one couple under 40 where both people don’t work.

    I’d gladly take a 15% interest rate and an house price/single income ratio of 3:1 versus today’s house price/ DUAL income ratio of 6 – 9: 1

  44. PS @ Justin – re ” today’s kids and teenagers will be even worse 30 year olds than today’s 30 year olds.”

    Every previous generation says the same thing about the next generation….

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  46. dj – rates mean nothing, when they rise the house principal remains which by the way is in the stratosphere at this point, hence why 36% of Canadians are barely making it day in and day out. RE in this country has done a number on many people and it is rearing its ugly little head as we speak.

  47. I would say a LOT of Canadians, regardless of age, are screwed.
    Some are screwed by circumstance (30’s), some by overreaching lifestyle (Boomers), some are born into screwdom (babies!). A lot have screwed themselves through ignorance (be it conscious or unintentional).

    I’m 40…where do I fit in? Half-screwed?
    All I know is that I have become FULLY aware of financial self-reliance and work my a$$ off in order to achieve it. Goal — Freedom 55! So far, so good…

  48. @Not30Not65:
    Haven”t you heard, Freedom 55 was a cruel myth started by London Life to suck RRSP money out of you. Few really achieved it(unless one is a government worker). Even fewer will achieve it in future.

  49. Re : Canuckguy

    I have to respectfully disagree with your comments, although I think in part they are just a jest. I think if people really want to save and have a lot of money down the road they simply need to make a few simple smarter choices through life. Somehow finding just $200 or $300 a month to tuck away ( a little more some months, a little less in bad months) at a young age in some decent low cost mutual funds. (or since this is the money sense home, the couch potato funds…) Secondly keep your debts down. In 30 or 40 years that will be some serious money. I know this is true because I am doing this myself and it has worked out so far .

    Making a simple choice such as purchasing a good low cost used car rather then a new one with a $400 car payment your stuck with for 5 years can make a big difference. I see co workers who have 2 leased cars they change every 3 years spending almost a $1000.00 a month then complaining about having no money? Then when you try to offer another suggestion they get angry. Rather blame it on their boss or work that their not paid enough? Frustrates the heck out of me when i see this.

    Let’s stop bashing the government workers as well. I think the majority of them just have o.k. retirement pensions not what we all assume them to have. Also lets be honest, if you were in a position to receive a good pension would you refuse it? I wouldn’t. We should be angry at the decision makers in charge of these pensions, not the people receiving them.

  50. @Paul N
    –Your points are well taken, I don’t disagree with anything you stated. Yes, my comments were ‘partially’ in jest in that I am exaggerating. In saying that, I stand by my comments in general because those who show the frugal money sense you have are much fewer than the rank and file. Yes, one can, with careful living, retire at 55 as you say but few are careful.
    –I did not mean to bash government workers per say, that’s just jealousy. Those to blame are the gutless short sighted politicians who caved in to the powerful public sector unions. Those public sectors are not sustainable and are a future drain on government revenues. A start in the right direction would be to halve the Cost of Living Allowances. Very few private pensions have COLA clauses.

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  53. Great article.

    In my opinion the major issue these days is debt and inflation. Many draw on the available credit as its readily available, and soon find a portion of their pay going towards those minimum payments (a never ending cycle).

    Rising gas and food prices aggravate this even further…paycheck to paycheck…


    Consumer Proposal Ontario

  54. @ Dan
    You’re right for inflation being a major issue, it’s coming in a big way, I am sure.
    Inflation is a friend to the heavily in debted and a horror to the frugal savers.

  55. Maybe the newsletter should have been called “Idiots are Screwing Themselves” but then that’s not very elegant or dramatic. You’re only financially screwed if you screw yourself, but people like to blame things that are out of their control for their failings.

  56. I’m hoping to get started now to avoid financial disaster. However, I think this article could be written for someone of any age.

  57. The crushing problem for us 30-somethings is the staggering real estate and housing prices. In my market (Vancouver) a junk teardown 2bdrm rancher way out in the burbs can cost you over $500,000 which is a $2,500 a month payment. To keep that to below 33% of your income would mean you would need both spouses working for about $55,000 gross assuming that you have no other major fixed expenditures such as student loans or children. While it is possible a $55k salary in your 30s is not possible for everyone especially in our current economy; many people are having a hard time finding any job at all let alone one with decent benefits and pension at $55k.

    Even remote markets like Prince George and Kelowna are facing upwards price pressures because boomers are selling their $1.2 million dollar homes and downsizing to the country. A tiny market like Powell RIver that 20 years ago saw typical house prices in the $75k-$200k range are now seeing homes averaging in the $350k range due to these pressures. With the low work prospects in these remote towns the young are forced out into the city in search of an affordable workhousing equation and these towns become greyer and greyer with health care being the number one industry.

    Compounding this unfortunate squeeze for us 30-somethings is that despite all of these retirees netting half million dollar profits on their home downsizing, this money is not flowing into the economy – as retirees are taking the profits and investing them into the capital markets to produce long term income. The retirees are more interested in having two vehicles, a boat, and a lot of cruise tickets and vacations than they are in building and managing businesses that employ people with all this capital.

    Myself, I live in a tear down rental – but the property is valued at over $800,000. If I won the lotto extra I’d have to spend the full $1 million just to buy this place and FIX IT UP.

    I think that the debt and poor financial setups are largely instruments of a real estate and debt and credit market gone wild. How do you save for retirement when you are renting? Furthermore how do you save a $100,000 down payment (20%) when you are renting? How do you carry a $3,000 a month mortgage while raising your new young family after paying for a wedding and student debts?

    Our parents, unintentionally, created this disaster by being the biggest demographic lump by age that the world has ever really known in the modern age. As they all bought houses, one after another, they used up the housing stock causing more development to be needed. Scarce assets rise in value, and they saw a perpetually rising real estate market. The youngest of the boomers saw housing prices 5-10x that of the oldest when they “got in” to the housing market. Now they are electing politicians who will do anything to keep housing prices high at least until after they die – we are seeing massive foreign direct investment and encouragement of specualtion; ultra low interest rates, and record deficits to keep this insanity running.

    The only answer to these dillemae is for the housing market to crash. It will devastate the boomers who created the problem in the first place who are weilding such electoral clout that this will probably never happen while they’re around and able to get to the polling station. You cannot have a “starter” half million dollar home when the median income is $35,000 and the jobless rate hovers over 8%. The “starters” cant afford them. For now, speculation, low interest rates, and foreign direct investment are keeping the insanity rolling. These things cant go on forever.

  58. Dear K Taylor,

    As a “middle ager”, about 50, and a single person who has made less then $55,000. for many of my years in Toronto where housing is pretty expensive too, I have to disagree with a lot of your comments.

    Not everyone is “entitled” to a certain lifestyle. If you want a big house you simply have to make sacrifices elsewhere. You may have to settle on one child rather then two. Hey you might even have to live in a townhouse. But look at that as an investment for the future if you want to have a big property one day. Did you start saving at 18 like I did, and put the money away while you lived with your parents? Start an RRSP? If your answer is no then you can’t cry aboutnot having a good downpayment at 30.

    I’m in pretty good shape now. My house is paid off I have a good retirement savings and I’ve been able to spoil myself with a lot of stuff and vacations. With one average income. I’m not even that frugal. When you bring up an example of two people at $55K, having problems I simply have to laugh. You have to break down where that money goes. Something as simple as both parties having high end cars and changing them every three years is enough to kill ones dream of home ownership. Sorry… buy a used Toyota Corrola or a Honda civic and learn how to maintain it yourself. One example but a little common sense saves a lot of costs.

    Your comment about retiree’s tying up their money in “capital markets” is backwards. What do you think your money does invested there? It gives companies like Telus for example cash to invest in their infrastructure in Canada and create jobs… They in turn pay you for you investing in them with a dividend and hopefully higher stock values down the road. Your money is at work while it takes care of you.

    You also simply can blame everybody & everything on housing prices. There are bidding wars for houses here, the house is listed at a certain amount and people fight each other over the house. Then people overpay for them with money they don’t have and get themselves in over their heads. I would never do that – it’s insane. Walk away, another property will surface for you. I’m sure in your case you can find something in the “burbs” smaller and cheaper. Buy that for 5 years and pay it down sharlply, move closer to where you want to be in steps, when the market is right and you paid a good chunk off of your property.

    Live within your means, if you don’t like that, take a second job or educate yourself and be patient and try to get a career that pay’s you $100K rather then $55K.

    I don’t mean to sound mean, but if i can be here where i am right now so can anyone else.

  59. THe problem in Canada in a nutshell:

    One under-40 worker said it is frustrating that, even though he and his girlfriend have degrees and professional employment, they are still drowning in student loans and have to move back in with one of their parents in order to save enough money to buy a house.

    “How is it that, for example, my father, the sole breadwinner in a family of five, who had no high school diploma, was able by my age to work and pay for a house, two cars and family expenses by my age and afford luxuries like vacations with his sole income,” the man wondered. “I keep asking myself this and finding no real satisfactory answer.”

  60. NO this is retarded- it has taken me 15 years to pay for my education and get a masters. I can’t afford a house- the job market for teachers is hooped. I am not coming back to Canada- since we need to support four to one ratio. For every retiree that is collecting pension we are paying for it now. We are two working professionals at 35 . With a PHD and a masters are loans are paid off. We still can not afford a house or even start a family without getting into massive debt. I spent my life paying off over priced loans and being abroad for 7 seven years now. My answer is forget it canada is too expensive.

  61. Wow this post never seems to die.
    Hi Jin,
    Did you read through any of the other 60 comments ?

    So your saying the $50.00 that is taken from your pay every week to pay CPP is stopping you from buying a house. ??

    Funny I saw some brand new townhouses being built just outside the GTA advertised from the low $200,000’s… Historically people buy a little out of a major center pay down their houses and hope the value also goes up then you sell it and move a little closer in steps. (if that’s what you want that is to move closer)

    I think you need to be a little more creative I’m sure you will find a way.

  62. Why do you think Old Age Security and Canada Pension Plan may no longer exist in 25 years?

  63. Canadian Capitalist

    @Chris: I’m not sure who you were asking but I think CPP will be there for us as it is not a pay-as-you-go system anymore. I’m not so sure about OAS. Already OAS rules have been tightened and with the population aging rapidly, OAS rules are likely to be tightened even more. Of course, that’s speculative at this point, so for long-range retirement planning purposes, it is best to plan a little bit pessimistically.

  64. Not everyone in each generation is exactly like
    the stereotype.
    In each group there are those who are wise
    about what they need to do and those who are not.
    I’m 65 years old. Lived conservatively, always
    debt free. Paid off a modest home in 5 years.
    (good thing, because the interest rate at renewal,
    at that time, offered by the bank was 23.5% –
    seriously – some friends had to walk away
    from the mortgaged home in 1980’s)
    Have always saved minimum 20% of income.
    O.K. now what.
    Straight-line market not expected to change for 20 years. It’s basically a straight line market, with
    ups and downs.
    High Fees for managing the retirement accounts.
    30% is going to go on fees no matter what I do
    when you add in all the hidden fees, commissions
    that are paid to all the employees.
    30% is going on taxes.
    So when you save for retirement, make sure
    that for every $1,000 in income you want
    you have $300,000 in invested assets to carry
    you through a long retirement.
    By the way OAS is income-tested. Above
    a certain income it is ‘clawed back’ until
    at a certain level of income you don’t get it.
    CPP is a Pension Plan that Employees and
    Employers contribute to in order to produce
    around 20% of your needs in retirement.
    Needs, not wants.
    All these government plans have a huge list
    of rules and if/and/or/buts as to who gets what.

  65. To Phil S.
    When has any first nation people been responsible for anything? Seriously.
    Most just stand in line for a government hand out!

  66. A lot of good points in this thread.
    Just a note re: RRSP,s; These are good for sabbaticals, extended vacations etc. WHILE YOU ARE WORKING.

    When you retire you will want TFSA,s. If you cash out RRSP,s after retirement you will lose your OAS supplement.
    Young people: you’ve got to pay your dues, just like us oldies did.

  67. @Jerry

    Your generalizing a little too much with your comments. They don’t really make a lot of sense. Old age Claw-back only kicks in if you have a pretty substantial yearly income coming in from your sources :

    If your net individual income is above a set threshold, your OAS pension will be reduced. Here are the starting thresholds:

    $70,954 for 2013
    $69,562 for 2012
    $67,668 for 2011
    $66,733 for 2010
    $66,335 for 2009
    $53,960 for 2000

    So before you possibly give people the wrong impression here, someone has to have a pretty substantial nest egg to create an income stream like that before being penalized… Generally my impression of TFSA vs. RRSP for people starting out is at about the $44,000.00 salary threshold. Make under – fund your TFSA make over – Fund your RRSP. (Ideal – spend less and fund both). This is a pretty old thread – but just need to point that out.

  68. @Jerry

    Your generalizing a little too much with your comments. They don’t really make a lot of sense. Old age Claw-back only kicks in if you have a pretty substantial yearly income coming in from your sources :

    If your net individual income is above a set threshold, your OAS pension will be reduced. The starting thresholds for 2013 for example: $70,954.00

    So before you possibly give people the wrong impression here, someone has to have a pretty substantial nest egg to create a yearly income stream like that before being penalized… Generally my impression of TFSA vs. RRSP for people starting out is at about the $44,000.00 salary threshold. Make under – fund your TFSA make over – Fund your RRSP. (Ideal – spend less and fund both). This is a pretty old thread – but I just need to point that out.

  69. @Ram Balakrishnan

    Before posting you may have wanted to educate yourself on CPP. Here is some information you may find useful to know.