Wake up

When I first hired Sinan – who wrote yesterday’s blog – he’d been on Wall Street. The guy was a vice president of capital markets in New York for RBC. He did a similar institutional gig on Bay Street.

Now he doesn’t move millions with one keystroke any more. He helps people. Far better. He fills their TFSAs and plots retirements. Ensures they always have an income stream, a path ahead for their kids and a plan for life. Manages portfolios so the future can be more predictable, safe, with less stress.

This is what my colleagues do. All of them came from banks or other corporate shops. Its work that is (unlike writing a sketchy blog populated with conspiracy nuts) deeply satisfying. We know it on the calls, through the notes and on the faces of folks who took the scary step of giving over their money and savings. It’s a confusing time in a complicated world. Trusting someone to help is a big deal. A relief.

This hit me again reading Sinan’s piece and then the latest wretched report from one of the big financial companies. The study from IG Wealth (the mutual fund guys who found redemption) is pretty shocking. Canadians may be even more pooched than we thought.

• Less than half of working Canadians have any pension plan (other than CPP)
• That includes all government workers and public sector employees with DB (defined benefit) plans. Strip them out and 70% of the rest of us have nada.
• Half of Canadians have no clue what income they’ll need in retirement.
• 80% of people are having trouble saving anything. Half save nothing now.
• Despite this, almost half of us expect to retire early. Before 65. Huh?

It gets worse.

A fifth of Canadians over 50 have saved $5,000 or less. Only 15% of Canadians have non-real estate assets of half a million or more. Among those who do make it to retirement, liquid assets (of all kinds) average just over $270,000 – less than a quarter of the amount people say they need to get to the finish line.

A basic problem seems to be that folks have no idea how much retirement costs. If you can live on 70% of what you used to earn, you’re acing it. But a huge number of Canadians find the lack of a pension plan and a dearth of savings mean their incomes plunge by half or more. After all, the average CPP pay-out is a measly $803. The OAS payment is $742. So this amounts to an annual gross income of $18,540.

Nobody in urban Canada can live a happy life on that. Unless you like raccoon burgers.

The idea behind the public pension was always that it would be one of three legs people stood on after they finished working. The others were corporate pension plans (now evaporating) and personal savings, through tax shelters like the RRSP, TFSA or the new weird FHSA. In many ways our fetish with residential real estate is making retirement – and financing your whole life – a helluva lot worse.

Houses cost a bundle, to buy and to own. They suck off income. Every year it gets worse, as insurance premiums, property taxes, utilities, condo fees and basic maintenance items jump in cost. Without a vibrant real estate market and sustained growth in home values, it makes no financial sense to own. Renting is way cheaper. Landlords subsidize most tenants – because they’re myopic and smitten.

Second, people with real estate and scant, inadequate savings, think they can just cash in and finance their retirement years with the proceeds.

Think again. In this market, with scads of anxious sellers and a paucity of buyers not only is it hard to get an deal, but prices are fading at the same time. Real estate’s a market. Like stocks, If you really, really need to get out when things are down, you must take what you’re offered. People with liquid portfolios and savings can afford to wait for better conditions. Most cannot.

So, if this is you, wake up.

You have a month to take advantage of the retirement savings shelter to contribute, get a 2025 tax refund (to invest in your TFSA), add to assets that are growing faster inside the plan and to make the future-you less miserable. This will add more to your life than a new tat or a trip to Mexico. (But getting a dog is okay.)

While there is a mess of uncertainty in the world, plus a myriad of ways to piddle away money, some things we all know. Your work will end. You’ll get old. If average, you won’t have enough to live on. And everybody younger than you won’t care.

So change it. Your choice.

About the picture: “MSU…thank you for all you do and with what you have to put up,” writes Drew. “Long time reader, never a commenter. You have changed my and my family’s life…for the better. Forever grateful. Heeding your call for more pooch pics. Our dog, Levi graced your blog a few years back. This is Obi, our son and DIL’s dog. He has not…yet. They’re related. Same dad, different mom. Love German Shorthaired Pointers!”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/02/03/wake-up-2/