Aging and Retirement in the Real World

Aging and Retirement in the Real World
The percentage of Canada’s population who are over 65 years of age is forecast to increase significantly in coming decades. How much income can they expect? Assignment A asked you to forecast your earnings until the age of 65. The purpose of this assignment is to illustrate the actual factors which determine the income level and the uncertainties of spending of real people over the age of 65. The “real person” whose retirement income you will be calculating can be you (i.e. the hypothetical you whose career path and earnings you forecast in Assignment A) or it can be a real person whom you interview (such as a parent or grandparent or neighbour). The income of people over 65 depends on (1) any earnings they receive from continued employment; (2) any CPP/QPP benefits they receive from past employment; (3) any other transfer payments from government which they may receive; (4) any private pension plan retirement benefits for which they are eligible; (5) drawing down any savings they may have accumulated in earlier years; (6) income transfers they receive from other households (e.g. from other family members); (7) “in kind” income (such as rent-free housing or vegetables grown at home) and (8) taxes paid.Your assignment is to specify the amount of each type of income [i.e. (1) to (7) above] which your real person can expect to receive, how long they can expect to receive it and any uncertainties which are associated with that income source. Add up the expected incomes from each source. Be specific about the assumptions and calculations which underlie your forecasts – for example, show the calculations on which any forecast of pension income is made.
How adequate is the anticipated stream of income for the needs of this person? What are the main
income and expenditure risks which this person can anticipate?
http://www(dot)oecd(dot)org/pensions/