Most pension plans are not sustainable as they exist today | General financial discussion | Discussion forum

It does not matter where you live in the world, there is a false promise made to everyone by government and through unions, employers that the contributions paid for the last 20, 30 years was sufficient to cover $3,000, $4,000, $5,000 monthly pension payments with 3%, 4% annual pay increases.

This was an excuse for employers and unions to pay and give less to employees as current compensation through their paycheck in wages, salaries.

The problem is most people want an easy way to make money and most want some government, company, union etc. to take care of them. A retirement and financial utopia that does not exist.

All I was advocating through many posts was give everyone a choice and they should live by their choices. Those that are able and financially literate, financially intelligent, financially disciplined have many choices today to save, invest and save income taxes that did not exist 10, 20, 30 years ago.

I believe the main reason why those in favor of pension plans and other retirement benefit programs managed by a central authority are against giving choice is because they know that their pension plans will not work and will not be sustainable if many are not forced into their confiscation of money, property from their paychecks.

We can see today the high expectations that most pension plans have given pensioners which are finding it very difficult to keep their plans intact as they promised. This is going to get worse and many on this pension, socialistic belief system want just to take a little more which is never enough.

A little becomes more and more and then this all falls apart or we get much less 30%, 40%, 50% less making the great touted pension plans worse off than having saved, invested for decades in RRSP's, TFSA's, non-registered investments etc.

They have many tools to do this, cutting of annual inflation indexation, capping it, putting a maximum 2%, 3%, 4% per year, increasing age eligibility, increasing contribution amounts, reducing a spousal percentage of pensions paid every month. Worse, if they fail, Ontario funded by us taxpayers guarantees $1,000 a month only which could result in a big cut of maybe 50%, 60%, 70%, 80% etc. to many monthly pensions paid.

They write the rules and can change them anytime. Also, nothing goes to family, non-spouse beneficiaries and spouses only get 50% to 65% of their originally deceased spouse's monthly pension.

The easiest way for a women that live usually longer to becomes poorer is losing a spouse. However, if they planned ahead prudently and had $800,000, $900,000, $1,000,000 from financial investments, life insurance, no debts etc. this would protect the spouse firstly and the family too from a premature death of a spouse. This is true even if a spouse lives 5, 10, 15 more years after a deceased spouse.