With the recent stock market reality, the Canada Pension Plan Investment Fund has reported a $10 billion loss in their last report, and that caused a lot of anxiety among baby boomers who are thinking of retirement. According to The Toronto Star, the official maximum government retirement payment is $884.58 per month, and the average payment in 2007 was just $481.46 a month. Part of the problem has to do with the fact that the CPP was designed in 1966, and it’s a very different world out there now.
Leading-edge boomers just simply have to delay their retirement plans since a lot of them have probably lost half of their investment income. Trailing-edge boomers (those in their 40s) are not much better off either because they are worried that by the time when they arrive at retirement age well after millions of other baby boomers, they fear the CPP Investment Fund will be dry. The Star predicted that while it’s unlikely any federal government would let the Investment Fund dwindle that low, many admit that plans must be made for the huge numbers of retiring boomers.
Michael Ignatieff, federal Liberal leader, has said that this would be the largest withdrawal of labour from the Canadian workforce in history and the largest withdrawal of CPP funds. “It is past time we found a resolution to this issue,” he said. As I’ve said many times before in this blog, most boomers wouldn’t need nearly as much money once they retire as they do now. However, if boomers want to maintain their quality of life, they should consult a financial planner on how to weather the current storm and still maximize their investment.
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