Rise in OAS age wake-up call for investors
The change in age eligibility for the Old Age Security program is a wake-up call, says a well known Cowichan Valley financial advisor.
"It's a wake-up call for people who've been doing far too much procrastinating," Mike Watkins of Edward Jones Investments told the News Leader Pictorial.
Watkins calls the announcement a catalyst for serious discussion.
"It serves notice that we're living longer, and we'll need more money prepared," he said.
There are three choices, he suggests: save more money; increase your investment yield; or work longer.
It's been expected for months, and the Tories' recent federal budget confirmed eligibility for the country's Old Age Security program will jump from age 65 to 67. Cowichanians responded to the news earlier this year with mixed reactions.
Canadians across the country received notice this month in a letter from Ottawa people born after March 31 1958 will not be eligible for OAS AND GIS benefits until they turn 67.
"This letter is for information only; you do not need to take any action," writes Minister of Human Resrouces and Skills Development Diane Finley.
"The proposed changes will not come into effect until they are passed by Parliament."
Watkins says in discussions about the future with clients he'll now go into more details about what they need to do to adjust to the change.
He suggested moving from low-yielding GICs to more risk.
"There is an opportunity with dividend paying stocks," he explains.
"For example, Royal Bank stock gives a 4.05 per cent return. That's the equivalent of a GIC of more than six per cent.
But, he says, at the end of the day the change in age won't have have a huge impact.
Most people are physically and mentally active at age 65 to 67 and may be doing other things since they left work.
"They may begin a business, continue working or do volunteering instead of sitting on a porch in a rocker."