Financial markets around the world are reeling following President Donald Trump’s latest and most severe volley of tariffs, and the U.S. stock market may be taking the worst of it.
I mean, that’s basically what US Social Security is. It also has a cap, and poorer people actually get a little more out of it than they put in, while higher earners get less. It’s just that it doesn’t pay enough to work on its own.
The old idea was that the US would have three legs of retirement: Social Security, 401k’s, and traditional corporate pensions. Each of these has downsides, but a failure in one can be propped up by the other two. However, Social Security is being pilfered, corporate pensions rarely exist unless you have one of the unions that has maintained power until now, and 401k’s are too subject to the wild rides of the stock market.
That seems like a good addition, although at least for younger people i’d still prefer stocks over the safer annuities, since with a longer time horizon you can weather out some of the fluctuations for higher returns.
Yeah, in that case we have two vehicles: TFSA which is a tax free growth account (similar to 401k), and an RRSP, which is a tax deferred growth account (offsets your taxes now, withdrawals taxed as income later, no tax on gains).
Young people should be contributing to TFSA then RRSP, depending on life goals/events. CPP withdrawals are automatic unless self employed.
In Canada the CPP is paying into an annuity you get after retirement.
You’re not just paying in for the current seniors, you get out based on what you put in (up to a cap)
I mean, that’s basically what US Social Security is. It also has a cap, and poorer people actually get a little more out of it than they put in, while higher earners get less. It’s just that it doesn’t pay enough to work on its own.
The old idea was that the US would have three legs of retirement: Social Security, 401k’s, and traditional corporate pensions. Each of these has downsides, but a failure in one can be propped up by the other two. However, Social Security is being pilfered, corporate pensions rarely exist unless you have one of the unions that has maintained power until now, and 401k’s are too subject to the wild rides of the stock market.
That seems like a good addition, although at least for younger people i’d still prefer stocks over the safer annuities, since with a longer time horizon you can weather out some of the fluctuations for higher returns.
Yeah, in that case we have two vehicles: TFSA which is a tax free growth account (similar to 401k), and an RRSP, which is a tax deferred growth account (offsets your taxes now, withdrawals taxed as income later, no tax on gains).
Young people should be contributing to TFSA then RRSP, depending on life goals/events. CPP withdrawals are automatic unless self employed.