GOVERNMENT CPP BAFFLEGAB MORE IMPORTANT THAN FINANCIAL DISCRIMINATION OF SINGLES AND QUALITY OF LIFE

Posted on January 31, 2016 by ffswpadmin

GOVERNMENT CPP BAFFLEGAB MORE IMPORTANT THAN FINANCIAL DISCRIMINATION AND QUALITY OF LIFE OF CANADIAN SINGLES

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

There has been much discussion lately as to whether the CPP (Canada Pension Plan) system should be changed. The objective of the government is for country to live in a society that takes care of its citizens. The reality is that some citizens are being taken care of more than others, that is the rich and married/coupled persons while singles and low income are being financially discriminated against.

EXAMPLES OF FINANCIAL DISCRIMINATION

TARGETED TAX RELIEF PROGRAMS FOR SENIORS-The Federal Conservative government has a targeted tax relief program where a single senior can now earn $20,360 and a senior couple $40,720 before paying federal income tax. Program claims that approximately 400,000 seniors (or 7 to 8% of total Canadian seniors) have been removed from the tax rolls altogether. This so called tax relief for seniors allows federal tax relief for senior singles equal to $1,697 per month and for senior couples $3,393 per month.

The tax relief for senior singles hardly covers a rent or mortgage payment of $1,200 and $250 for food per month (Maslow’s Hierarchy of Need), but amply covers this amount for a senior couple. For a couple $1200 for rent or mortgage and $500 for food leaves $1693 (or 50% of $40,000) for other necessities and medications and maybe even a nice little vacation all tax free.

It is a well-known fact that singles require more income to that of a married/coupled persons living as a single unit. In Equivalence scales (Statistics Canada 75F0002M – Section 2 ‘The LIM and proposed Modifications’ (75f0002) (equivalence-scales) if singles are assigned a value of 1.0, then couples require 1.4 times for income, not 2.0. $20,360 times 1.4 equals $28,504 ($2,375 per month) (updated November 18, 2017). If the federal government cared about income equality and quality of life for senior singles, it would increase the tax free amount for singles. By not applying equivalence scales to income for senior singles, they lose $678 a month or approximately $8,000 Lost Dollar Value annually in quality of life to married/couple retired persons. (From age 65 to 90, this amounts to $20,000).

When income for senior married/coupled persons is over $40,000 they again get another benefit, that is pension splitting, which singles cannot use increasing quality of life for married/coupled persons over senior singles. This is a tax benefit piled on top of another tax benefit.

The number of senior ‘ever’ singles (never married, no kids) and divorced/separated persons comprises only about 13 per cent of the population, so how much would it cost to bring the quality of life for these citizens up to the standard of tax relief for married/coupled persons? The answer is ‘not very much’ in comparison to what has been given to married/coupled senior persons.

“Ever” singles are told every day they are worthless and worth less than married/coupled persons even though they have worked 35 – 40 years subsidizing mother/baby hospital care, EI paternal/maternal leave, education taxes even though they have had no children and paid more taxes than families.

GOVERNMENTS IGNORE COURT RULINGS–Re Allowance Program and Credits, (policyalternatives) 2009 Policy Brief, “A Stronger Foundation-Pension Reform and Old Age Security” by Canadian Centre for Policy Alternatives, page 4, states this program discriminates on basis of marital status as confirmed by case brought under Charter of Rights where federal court agreed program was discriminatory, and ruled it would be too expensive to extend program on basis of income regardless of marital status.’ So what is happening? Age eligibility for Allowance will change from 60 to 62 beginning in 2023 with full implementation in 2029. In this democratic, civilized country let’s just ignore federal court rulings and continue a $? million discriminatory program. Article suggests that ‘OAS (Old Age Security) and GIS (Guaranteed Income Supplement) combined should be increased to at least bring it up to after-tax LICO (Low Income Cut Off) for single individuals.’ And why should married/coupled people get discriminatory marital status benefits where unused credits like Age Credits can be transferred to spouse?

Gross financial discrimination for singles occurs when governments choose to completely ignore court rulings. Lost Dollar Value to singles: unable to calculate.

PENSION SPLITTING–It is immoral and ethically irresponsible for governments to deny that pension splitting benefits the wealthy most. For families who can be exempt from paying 10 – !5 percent income tax on $100,000 and maintain the same income level during retirement as they had during their working years, even though they have less expenses during retirement, is financially discriminating to singles who cannot pension split. (This information was revised April 10, 2016 – Lost Dollar Value: From estimate on income splitting, it has been suggested that income splitting would provide tax relief of $103 for income $30,000 or less and $1,832 for income of $90,000 and over or an average of $794 overall. If $800 ($794 rounded off) is calculated times 35 years (age 65 to 90), then Lost Dollar Value will equal $28,000.)
HOUSING-Financial gurus seem to be leaning towards renting instead of home ownership. This creates further hardship for singles and the low income. If young married/coupled persons are being told that they will probably need to rent because housing prices are out of reach, where does this leave singles and low income persons? Trend now is towards tiny houses with composting toilets and tanks for storing water, but the rich don’t want to see tiny houses in their backyards.

Try telling singles and low income person that renting is the better alternative when they pay more per square foot and quality of housing is lower than that of houses for families. If they have problems with not enough income for housing, they are told they should go live with someone. These people ought to try ‘walking in the shoes’ of singles living in one room or communal situations, where because of low income, they don’t have their own bathroom, and it becomes a ‘dog eat dog’ world where others will, for example, steal food because there is not enough money to buy food. (cprn.org)

The housing market (rental and ownership) is financially completely upside down. Instead of the rich and middle class paying more for the greatest amount of square footage, they are paying less for the greatest amount of square footage and niceties associated with that. Singles and low income will be living in hovels, thus violating Maslow’s Hierarchy of Needs principle.

IF MONEY IS THERE YOU WILL SPEND IT, IF IT IS NOT, YOU WON’T–Financial studies have come to conclusions that for people in the lowest income quintile on average have replacement rates of 100 percent, implying their real standard of living actually rises after retirement. This is such a lie and is totally irrelevant to singles and low income persons. If there is a poor quality of life before retirement, there still will be a poor quality of life on 100 percent replacement income for singles that does not meet the 1.4 income equivalent (updated November 17, 2017) to that of married/coupled persons living as a single unit.

CONCLUSIONS

Governments, decision makers, some financial advisers to the government. and think tanks are financially illiterate about the financial discrimination of singles.

It seems to be more important for governments to ensure that upper-middle class and upper class maintain their standard of living than it is to treat singles fairly.

Unprecedented growth in value of houses will result in huge tax-free wealth for families and married/coupled persons to the financial detriment of singles and low income.

Marital manna benefits like pension splitting has created a nanny state where married/coupled persons want it all and once these benefits are in place, it is very difficult to get rid of them. Married/coupled persons have been made irresponsible by their own government. They are not living a lower life style in their retirement. A further question is whether these programs will be financially sustainable.

Assumption that retirement income only needs to replaced at 70 percent, for example, does not hold true for both singles and married/coupled persons, because singles require 1.4 income equivalent to married/coupled persons living as a single unit (updated November 17, 2017). Twenty thousand dollars a year is not an adequate quality of life retirement income for Canadian senior singles.

GOVERNMENTS NEED TO ADDRESS FINANCIAL EQUALITY FIRST FOR ALL CANADIAN CITIZENS REGARDLESS OF MARITAL STATUS, THEN TWEAK CPP.

This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

FINANCIAL GURUS FINANCIALLY ILLITERATE ABOUT SINGLES’ FINANCES

Posted on January 27, 2016 by ffswpadmin

FINANCIAL GURUS FINANCIALLY ILLITERATE ABOUT SINGLES’ FINANCES

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to be used as personal or financial advice.)

In the definition of family, for example Canada Revenue Agency, ‘ever’ singles and early in life divorced/separated persons are included in the definition of family, but in financial discussions by financial gurus they are often ‘kicked out’ of the family.

Financial gurus are often financially illiterate and discriminatory in the financial affairs of singles. The most often egregious examples of this is the exclusion of ‘ever’ singles and early in life divorced/separated persons from their blogs and studies. The following three examples are used as a basis for this post.

Example #1

(false-assumptions-four-ways-seniors-singles-lose) The December 2, 2015 post “False Assumptions of Article ‘Four Ways Senior Singles Lose Out’” talks about false assumptions and false categorization of singles by Ted Rechtshaffen’s October 13, 2012 article “Four Ways Senior Singles Lose Out”. In this article he states how widowed persons financially lose out in tens of thousands of dollars because they are no longer part of a couple. He suggests that tax systems should be made fairer for only widowed and later in life divorced/separated persons. ‘Ever’ singles and early in life divorced/separated persons were left out by exclusion because definition of single status was incorrectly used. (Ted Rechtshaffen is president and wealth advisor at TriDelta Financial, a boutique wealth management and planning firm) (http://www.tridelta.ca/)

Example #2

(thebluntbeancounter) The Blunt Bean Counter blog by Mark Goodfield article “The Burden of Singledom” May 6, 2014 is a response to a single person who stated his blog series on retirement was no help and was indeed obscene (this was stated in his blog) to her as a single person. He is a Chartered Professional Accountant who readily admits that his blog is for everyone, but in particular high net worth individuals and owners of private corporations. He states that the target audience was not singles or low income Canadians for the retirement series. There is no problem with this statement; however, he asked Rona Birenbaum to do a guest post, a well-known and often quoted financial planner who also typically deals with high net worth clients. Her article, ‘The Burden of Singledom’ again gave no meaningful advice beyond what is already known by singles.

Example #3

Dr. Jack Mintz is the President’s Fellow of the School of Public Policy at the University of Calgary. Jack Mintz and Philip Bazel published an article in February 2014 called “Income Adequacy among Canadian Seniors: Helping Singles Most” (policyschool.ucalgary)

In the article the following statements are made:

‘Policies should be directed at these most vulnerable single seniors, such as enhancements to the GIS top-up program targeted at those seniors with the lowest incomes, and increased survivor-benefit rates under the Canada Pension Plan.’

’When the income inadequacy of singles and married couples is evaluated using LICO (Low Income Cut-Off), we find a significantly higher incidence of elderly singles with income under $20,000 below the LICO threshold (52.6 percent) when compared with the LICO incidence of elderly households containing a married couple below $40,000 (15.7 per cent for households containing a couple with one elderly, and 6.3 per cent for households containing a couple with two elderly)’.

Such a statement shows financial illiteracy to the finances realities of senior singles as it costs them 70 per cent of what it costs a married/couple persons to live as a single unit. A better alternative would be to forget the marital manna benefits directed to survivors or widowed persons and treat all senior singles whether they are ‘ever’ singles, divorced/separated or widowed persons as equals with top-ups equal to 70 percent of married/coupled person units. The 52.6 per cent for singles versus 15.7 and 6.3 per cent for married persons mentioned in above quote shows an enormous spread between the two and is proof of this. Financially, while in a coupled state, widowed persons appear to have a pretty good quality of life while singles below LICO appear to never have an equivalent quality of life.

(Many low income singles do not have close family members to live with and when they are forced to cohabitate in non-family situations, they often live in undesirable situations such as other household members stealing food, etc., “Social Housing Waitlists and the One Person Households in Ontario”) (to-rent-or-own-affordable-housing-that-is-the-question)

Seniors living with family is an expense to the family unit. However, senior singles living on their own have to incur not only 100% of the living costs, but also 70% of the costs of married/coupled persons as a single unit.

Financial gurus state that 70 per cent replacement of pre-retirement income is the standard norm for retirement. Statistics Canada analysis has found that gross replacement rates vary by income but typically is about 70 percent. People in the lowest 20 percent income quintile have replacement rates of 100 percent, implying their real standard of living actually rises after retirement. However, the real truth common sense evaluation of these findings show that married/coupled people financially benefit more than singles and divorced/separated persons. A higher income level for the low income single person is still a low level income. Financial gurus seem to think that when Canadians have an equal or greater income during retirement than while they are working, that is okay. Try telling that to low income Canadian ‘ever’ singles and early in life divorced/separate persons who have not received the same benefits and are unable to save at the same rate as families or married/coupled persons during their working lives and, therefore, have lower retirement income.

(senior-singles-pay-more-part-4-of-4-response-to-reader-letters) An example of retired ‘ever’ singles and early in life divorced/separated singles receiving less is the December 22, 2015 blog “Senior Singles Pay More, Part 4 of 4” showing that in a targeted tax relief program single seniors pay no tax on up $20,360 income, while married/coupled seniors pay no tax on up to $40,720 income. (It costs more for singles to live person to person that it does for married/coupled persons. This program barely covers the rent for a senior single, but allows married/couple senior to live a much better financial lifestyle). A further example is the 10 per cent increase of the GIS (Guaranteed Income Supplement) for low income single seniors in the 2015 budget. One person has indicated that this has amounted to an increase of only $17 per month.

Conclusion

Financial gurus like Chartered Professional Accountants, writers of blogs, members of think tanks and financial planners need to educate themselves and include all singles in their discussions, not just widowed persons and later in life divorced/separated singles.
Financial gurus need to insure singles of all types are given fair and equal financial status in financial formulas and decision making.
Financial gurus need to become educated on what it truly costs ‘ever’ singles and early in life divorced/separated persons to live. It costs these persons 70 percent of what it costs married/coupled persons to live as a unit. These extra living costs need to be included in financial formulas and financial decision making.

The blog posted here is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

ARE FAMILIES REALLY MORE FINANCIALLY INTELLIGENT IN MANAGING FINANCES?

Posted on January 24, 2016 by ffswpadmin

ARE FAMILIES REALLY MORE FINANCIALLY INTELLIGENT IN MANAGING FINANCES?

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

Financial Post personal finance profile “Put Cash Toward the Kids’ Education” and in Calgary Herald on January 16, 2016 (financialpost)

The following is a condensed version of the financial profile of Harry 39, and Wendy 38, a British Columbia couple with two children ages two and a few months old. (Question: Did they marry later in life resulting in a low net worth at this time in their life because it is more difficult to accumulate net worth while single than as married/coupled persons?)

Their take home pay is $9,100 a month plus $240 take home universal child care benefits put into place this year by the federal government for total annual take home pay of $112,000. They both have defined benefit retirement pension plans, so it should be noted that contributions to their plans have already been deducted before take home pay total.

Their expenses include real estate mortgage, property tax, and home repair $3,489, car costs $550, food and cleaning supplies $1,200, clothes/grooming $150, charity/gifts $200, child care $850, entertainment $120, restaurant $280, travel $150, miscellaneous $626, utilities $350, phone/cable/internet $200, home and car insurance $325.

For savings they contribute $800 to TFSA (Tax Free Savings Account), and $50 to RESP (Registered Education Savings Program).

Their assets include house $500,000, cars $20,000, savings including RRSP Registered Retirement Savings Plan), RESP, TFSA (Tax Free Savings Account) and cash $40,700.

Their net worth equals $150,700.

What they want:

retire at age 55
buy a condo for the children’s grandparents to use when they are in town and to rent out at other times

Financial Planner Analysis

they haven’t made wills or appointed guardians for their children
they have no term life insurance
they can’t retire at age 55, but they can retire at age 59
they can’t afford to buy a condo as they don’t have the money for down payment
they should fully contribute to their children’s education plan into order to get the government benefit

Retirement plan

if they retire at age 59 assuming they remain with their present employers, their total income would be $96,732 plus Harry’s $9,570 CPP(Canadian Pension Plan) and Wendy’s $12,060 CPP.
At age 65, with the addition of OAS (Old Age Security), their total income will be $111,146 before income tax. There will be no clawback on OAS and with pension splitting, they will pay only 14% income tax and have a monthly take home income of $7,965 to spend.

Other Financial Analysis By Blog Author

they want to retire at age 55, but their children will only be ages 15 and 16, and their mortgage won’t be paid off until Harry is age 63. How financially intelligent is this?
they are not taking advantage of ‘free’ government benefits of $500 per child by not maximizing children’s RESP.
Harry is an immigrant who came to Canada at age 30 (nine years ago), and he wants to retire at age 55. He will have contributed to Canadian financial coffers for only 25 years. If he retires at age 59 he will also get what could be a 15% tax reduction with pension splitting at age 65. Canadian born singles and single immigrants do not get these same benefits and are subsidizing married/coupled immigrants who in many cases have taken more from the Canadian financial coffers than they have put into it.
with pension splitting and no clawback on OAS, they will only pay 14% income tax. Singles with equivalent pension income pay a lot more income tax. (It is stated elsewhere in the article that Wendy’s tax rate at present time while working is 29%).
their food and restaurant (including some cleaning supplies) budget is over $1400 a month for two adults and two very young children (does not include entertainment budget of $180 month). Their restaurant budget is $280 alone and yet many families think singles should live on only $200 a month for food.

Lessons Learned

married/coupled persons and families receive marital manna benefits while they are parents and while they are retired. One could say the only persons who contribute fully to the Canadian tax system while getting less benefits are singles.
married/coupled persons and families are not any more financially intelligent at managing their finances than single persons.
married/coupled persons and families all want to retire at the age of 55 regardless of their financial circumstances. Most singles do not have this option. Why should families bringing in $9,000 a month after tax income get $240 after tax child benefits and child education benefits and, then when they retire early at age 59, also get what is probably a 15% pension splitting tax reduction resulting in take home income of $8,000 at age 65 when their children are grown up? This is a very rich retirement income that most singles cannot aspire to.
Families, governments and decision makers all talk about expensive it is to raise children. For one Canadian child, the cost is about $250,000. So if cost is spread over 25 years of the child, cost per year is $10,000 per year, or in the case of this family $20,000 per year for two children. Their total after tax income is almost $10,000 per month, so approximately two out of twelve months income will be spent raising their children. The remaining income is for themselves. Add in another month of income for the children’s education ($10,000 times 20 years equals $200,000 not including government top up) and that still leaves them with nine month of income for themselves. So again, how expensive is it to raise children when this family has over $80,000 a year to spend on themselves?
When families (including married later in life) in top 40% Canadian income levels can retire at age 55 and 59, they spread the family financial myths and lie to singles, low income families, themselves, the world and God about how expensive it is to raise children and why they need income splitting and pension splitting. Low and middle class families are paying more and getting less for government programs. Singles of all income levels are paying even more and getting less (singles are considered to be in the upper 20% quintile of the Canadian rich with before tax income of only $55,000 and up. Wow, that is really rich).
singles know that they are paying more taxes and getting less in benefits. They also know they are subsidizing families when they work 35, 40 years without using mom/baby hospital resources,don’t use EI benefits at same level as families for parental leave, and don’t get marital manna benefits during retirement.
singles know they have been financially discriminated against by being left out of government financial formulas and are not seen as financial equals to married/coupled persons.

This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

FINANCIAL DISCRIMINATION AND SINGLISM

Posted on January 20, 2016 by ffswpadmin

FINANCIAL DISCRIMINATION AND SINGLISM

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.)

The following excerpts have been taken from two books written by Dr. Bella Depaulo http://belladepaulo.com/blog/. Depaulo is a Professor of Psychology and Project Scientist at the University of California. She has a longstanding interest and expertise in the psychology of deceiving and detecting deceit, a set of research and writings on how we live now, and a true passion for the practice and study of single life. She is the originator of the word ‘singlism’ used to describe discrimination of singles. Excerpts from her two books “Singled Out – How Singles are Stereotyped, Stigmatized, and Ignored, and Still Live Happily Ever After” (page 14, 117, 247 and 253-254) and “Singlism – What It Is, Why I Matters, and How to Stop It” (page 88) have been used for this article.

“Singlism is absolutist, contradictory, and utterly unforgiving. By blanketing the entirety of a person’s life until everything is snuffed out, singlism is worse than some of the other isms”. (Depaulo, Bella, Singled out-How Singles are Stereotyped, Stigmatized and Ignored, page 14)

“It takes a village to maintain a village, structurally and interpersonally and couples, singles and children are all a part of it (sic in old times)”. (Depaulo, Bella, Singled Out-How Singles are Stereotyped, Stigmatized and Ignored, page 117).

“The marital mythology takes a relationship that is deeply valuable and deserves to be valued, and turns it into the only relationship that is valued at all…”(Depaulo, Bella, Singled out-How Singles are Stereotyped, Stigmatized and Ignored, page 247)

…”Why should you have to be any kind of couple to qualify for the cornucopia of perks, privileges, and benefits that are currently available exclusively to couples who are married/coupled. I would like to live in a society that is equally respectful and supportive of all its citizens, regardless of whether they are single or married, uncoupled or coupled…i.e. first, fairness. Every citizen is equal under the law…Second, more fairness. As a starting point, every citizen of voting age gets exactly the same amount of everything that government has to offer…Fairness isn’t just for the government. Businesses should not charge married people less than single people for the same products, just as they would not charge whites less than people of color. Same for pay. If two men-one married and one single-do the same job for the same amount of time at the same level of competence, they should get paid the same. And get the same benefits package…my principles do allow for privilege….(i.e. sic Children and people with special needs/low income should be treated differently)…There are some things that are so basic to a decent life that no one should be denied them. Too many single people go without health insurance for health care (sic in USA), and too many singles spend their later years living dangerously close to the financial edge. No one-single or married-should needlessly live in sickness or in poverty…the workplace should be about work. Marital status should not be a factor in allocating benefits…(sic maternity benefits). A cafeteria-style plan, in which all employees get the same dollar value to spend as they wish, is one possibility that seems fair.” (Depaulo, Bella, Singled Out-How Singles are Stereotyped, Stigmatized and Ignored, page 253-254).

“We are all humans. It is time to let our humanity, rather than our marital status, be our qualification for basic dignities such as health care and for equal protection under the law” (sic as well as other things like recreation, library fees, etc. etc.) (Depaulo, Bella, Singlism-What It Is, Why It Matters, and How to Stop It, page 88)

The author of this blog has been collecting information on financial discrimination of singles for a number of years. Dr. Bella Depaulo’s studies on the discrimination of singles validates the information described in this blog and confirms that financial discrimination and singlism is alive and well, not only in the USA but also Canada and worldwide.

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).

MARRYING FOR MONEY PAYS OFF

Posted on January 17, 2016 by ffswpadmin

MARRYING FOR MONEY PAYS OFF

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

This Washington Associated Press article appeared in the Calgary Herald on January 19, 2006. Since it may be difficult to find online, it is reproduced in full here, and is followed by the author’s comments.

‘Marrying for money, it turns out, works.

A study by an Ohio State University researcher shows a person who married – and stays married – accumulates nearly twice as much personal wealth as a person who is single or divorced.

And for those who divorce, it’s a bit more expensive than giving up half of everything they own. They lose, on average, three-fourths of their personal net worth.

“Getting married for a few years and then getting divorced is clearly not the path to financial independence,” says Jay Zagorsky, whose study divided married couples’ assets so they could be compared with singles.

Zagorsky, a research scientist at OSU’S Centre for Human Resource Research, tracked the wealth and marital status of 9,055 people from 1985 to 2000. Those people have been participating in the National Longitudinal Survey of Youth, which has repeatedly interviewed them about various aspects of their lives since 1979. The participants are now 41 to 49 years old, making them the youngest of the baby boomers.

Zagorsky cautioned results could be different for older and younger Americans, who have faced different attitudes about marriage, divorce and living together without marriage.

Zagorsky’s study, published in the current issue of the Journal of Sociology, defines wealth as assets, such as real estate, stocks and bank accounts, minus liabilities, such as mortgages.

A big reason married people accumulate more wealth than others is simple economies of scale – one house is cheaper to maintain than two, he said. Divorce reverses those benefits, Zagorsky said.

“Divorce looks like one of the fastest ways to destroy your wealth,” he said.

David Popenoe, co-director of the National Marriage Project at Rutgers University, said people become more economically productive after they marry.

“They work harder, they advance further in a job, they save more money and maybe invest more wisely,” Popenoe said. “That’s because, one can speculate, they are now working for something larger than themselves. They are working for a family.”

Zagorsky showed singles slowly accumulated wealth during the study. Married people accumulated wealth much faster, accumulating 93 per cent more than single or divorced people over the life of the study, Zagorsky said.’

Further discussion on this article by Ohio State University “DIVORCE DROPS A PERSON’S WEALTH BY 77 PERCENT, STUDY FINDS” states: (researchnews.osu)

‘…The data in this study can’t say why marriage is so helpful in building wealth, and why divorce so devastating, Zagorsky said. But sociological research offers some potential clues: Married people can benefit because two people can live more cheaply than they could separately. In addition, because two spouses can share household responsibilities, they can each produce more than if they were single.

Divorced people have a variety of costs associated with the divorce, which increases how much they spend and decreases how much they can save, he said.

“We can’t tell from these data the reasons why divorced people have so much less wealth than those who are married, but the results are clear, Zagorsky said…..’

Blog Author’s Comments

No matter how the pie is sliced, families are generally wealthier than singles. In this study after 15 years, married persons (who stay married) accumulate nearly twice as much personal financial wealth as a person who is single or divorced, even though many have had the expense of raising children.

So what does a family have in wealth after 30 years and again after 45 years – three, four and five times the wealth? The answer is ‘yes’. Fast forward to year 2009 and see MoneySense, October 2009 (all-canadian-wealth-test). The table “Are You Rich Yet?” shows that if one examines the upper middle class 20% net worth quintile, the worth of unattached individuals is $81,001 to $270,000 compared to the worth of families of two or more which is $358,600 to $697,000. The gap is even wider between unattached individuals and families of two or more because single parents with children are included in the family of two or more statistics. (To portray a more accurate picture, single and divorced/separated, especially at a younger age, parents with children must be pulled out of the family of two or more column and put into their own column).

The All-Canadian Wealth Test, January 2015 (based on Statistics Canada 2011 data) (all-canadian-wealth-test-2015) shows for upper-middle 20% net worth quintile the wealth for unattached individuals is $128,088 to $455,876 and families of two or more $589,687 to $1,139,488. Again, the statistics are skewed because single parents with children are included in this category).

It should also be noted that middle class family net worth is not disappearing. Review of statistics from the All Canadian Wealth Tests show that in just two years net worth has substantially increased. The richest of the rich net worth has increased the most, while the net worth of the poorest of the poor has proportionately the least (added January 20, 2016).

The “Marrying for money pays off” article also states that ‘…people become more economically productive after they marry. They work harder, they advance further in their job, they sae more money and maybe invest more wisely…that’s because, one can speculate, they are now working for something larger than themselves. They are working for a family…’

Really??? Participants at the end of the study were 41 to 49 years of age. So what is being said is that somehow at the age of 41 to 49, married people have managed to become brilliantly smart at accumulating wealth while singles have remained brilliantly stupid at accumulating wealth. Yet in the same article, it clearly states ‘a big reason married people accumulate more wealth than others is simple economics of scale – one household is cheaper than two.

The Ohio State University State article states: ‘The data in this study can’t say why marriage is so helpful in building wealth, and why divorce so devastating, Zagorsky said. But sociological research offers some potential clues: Married people can benefit because two people can live more cheaply than they could separately. In addition, because two spouses can share household responsibilities, they can each produce more than if they were single.’

They can’t say why marriage is so helpful in building wealth??? Reference to “Six Reasons Why Married/Coupled Persons able to Achieve more Wealth than Singles” (six-reasons) gives six clear reasons why married/coupled persons do so much better financially than singles or divorced/separated persons.

Just another study where society continues to denigrate singles, and considers them to be less financially intellectual than families. Reasons why married/coupled persons are able to accumulate more wealth is because of marital manna benefits, not because of financial intelligence or that they are more dedicated to financial well-being because they are family.

This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

TO RENT OR OWN AFFORDABLE HOUSING – THAT IS THE QUESTION

Posted on January 10, 2016 by ffswpadmin

TO RENT OR OWN AFFORDABLE HOUSING -THAT IS THE QUESTION

These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.

This post will discuss whether renting or affordable housing are good housing options for single and low income persons.

RENTING AS VIABLE OPTION FOR LANDLORDS AND RENTERS

Rental costs from landlord perspective: A review of financial information shows that in order to generate a 5% annual return on a $250,000 rental property with no mortgage costs, the expenses incurred will be as follows:

What Landlords think they need to make renting their spaces a revenue generating business at 5 percent profit in the Calgary market:

rent charged (2 bedrooms) $12,500

condo fees ($325 X 12) $ 3,900

PT taxes $ 1,500

upkeep (paint, carpet, etc.) $ 1,200

extra cost of wear (kids/pets) $ 1,200

TOTAL RENT PER MONTH $20,300 divided by 12 months = $1,700

This does not include costs associated with loss of income when property is vacant, cost of major upkeep such as replacing appliances, cupboards every 5 to ten years, damages incurred from kids and pets, eviction costs, insurance, etc.

Arguments for and against high rental costs from perspective of landlords and renters

A review of an online article “Calgary Landlords war against the poor?” (landlords) shows pro and con comments on why landlords think they need to charge the present rental amounts and why poor are left out because they cannot afford to pay the present high rental amounts. Arguments are also made as to whether or not mortgage payments should be included in the rental costs; if included, then even higher rents need to be collected.

Comments on the side of the poor and low income include:

‘So then I ask you, where are these people supposed to go? No offense, but the “it’s just business, nothing personal” should have no place when talking about human lives.’
‘Gouging is a very common competent of a working free-market. The right (Conservative and like) just don’t want to admit they’re are (…..) for doing it. It is not about right or wrong. The difference between a renter and a landlord is that the landlord has assets. So even if you are living in a home and renting a condo, having to shell out money for repairs doesn’t exactly cost you as much (in the long run) as it would a long term renter. Because eventually you can sell that property and retire in comfort. It is very hard for a person who is just starting out with nothing to build themselves up to your level It is not that we don’t want to be there, it is just that there may not be as much opportunity for us so called “low-lives” as one may think. So when your entire income goes to shelter, food and clothing, there is not much left to save for any sort of down payment on anything…’
‘You are already making money by charging a tenant the mortgage, the land tax and the insurance. The mortgage part is already profit. An accumulated investment Beyond that, maybe a little more, is gouging. These people can’t see that is wrong. If they could charge a million dollars a month they would.’

One of the last reader comments submitted was the following (it is interesting to note that this comment pretty much shut up any further comments being made):

‘When, by gouging people for the necessities of life such as food and shelter, you contribute to the cost of living being higher than a working person can afford. You force me as a taxpayer in a rather high tax bracket, I might add ,to pay for the subsidization required to keep these people from starving or being out on the street or alternatively imprisonment when they steal to live, or more cops to maintain social order with a starving underclass. I’m tired of deadbeat free-riders trying to shuffle the externalities of their greed onto me. It is time for some controls being placed on the ability of landlords to raise rents. Rental increases being limited to 5% or double to rate of inflation annually, whichever is lower, seems reasonable to me.

Some comments suggested that most people should stay away from the landlord game as it is not a profitable business for the lighthearted.

Landlord profile and Financial Planner Advice

Financial profile of a married couple is as follows: Calgary Herald, December 12, 2015 (and Edmonton Journal) Financial Post “Oil Crash Forces Fix for Couple” (edmonton-journal)

This summary is about Gary, 60 and Wendy, 67, an Alberta couple who grew prosperous with Gary’s work as a petrochemical engineer often earning as much as $200,000 a year doing consulting. However, his work is now history as a casualty of collapsed oil prices. Wendy worked as an administrative assistant earning $24,000 a year before she retired in 1990 (well before age 65, by the way). Their income at the present time is $2,175 a month and is $3,240 less than their total monthly expenses of $5,415. (Part of their income is $590 after expenses from their two rental properties.) They say they need to know if they can survive. The article does mention one child is renting one of their rental properties.

Their net worth is $1,867,238. Their assets include residence $550,000, rental property #1, $460,000, and rental property #2 $430,000. Their investments include Registered Retirement Savings Plan $132,616, USA 401K in Canadian dollars $250,000, Tax Free Savings Account $39,334, non-registered savings/GICs $174,288 and two cars $17,000. Their total liabilities are two mortgages of $186,000 on rental properties.

The profile states the largest problem is that the couple’s income properties, which make up 60 per cent of their invested assets, produce little cash flow. One unit is rented to the couple’s son and its $1,150 monthly rent is below market values. Their other rental property generates $1,300 a month before expenses.

The financial planner makes the argument: ‘When Gary generated an income of $200,000 a year or more, they could afford to ignore investments, rent properties below market value and spend freely’. The financial planner’s recommendation is get rid of money losing rental property, cut expenses and reallocate assets to cut investment costs. It doesn’t seem to matter to the financial planner that this couple has acquired huge financial assets in their rental properties ($700,000+ value).

Conclusions about Renting

Renting income properties from landlord’s perspective is that this is a business and needs to generate a profit even when renting to singles (son in above example)and the poor (many of whom cannot afford $1,700 for rent). In other words, the goal of financial Utopia in a land of ‘milk and honey’ (Alberta) will never be achieved by the landlord with reasonable rents and certainly not by singles and the poor who are renting. Maslow’s Hierarchy of Needs principle for singles and the poor will also be violated when basic needs of shelter as well as food and clothing will not be realized.

UNAFFORDABLE RENT = VIOLATION OF “MASLOW’S HIERARCHY OF NEEDS” PRINCIPLE

For landlords and families who think singles and low income persons deserve only a single room‘ or ‘should live with someone’ they should read the January, 2009 study “Social Housing Waitlists and the One Person Households in Ontario” (cprn.org) on what it is like to live in these housing circumstances. An excerpt from this study reads as follows:

‘many households turn to shelters or make do with what they are able to find in the private market, often spending more than 50% of their income on rent. The focus of this study is one-person households under the age of 65 who make up approximately 40% of the applicants on Ontario social housing wait lists. This cohort has the longest wait times. How does this demographic cope during these waiting periods? What are their housing experiences? ‘

AFFORDABLE HOUSING AS VIABLE OPTION FOR SINGLES AND LOW-INCOME

From “Upside-Down Finances re Housing for Singles and Low Income – Part 1 of 3”, November 13, 2015 post (upside-down-affordable-housing), one example of housing shows condos presently being sold as follows: 1 bed, 1 bath, 1 patio micro-condo of 552 sq. ft. with starting price of $299,900 and $543 per square foot.. Two patio, 3 bed, 2.5 bath, 2 and 3 story 1830 sq. ft. condos priced from $649,900 to $749,900.start at $355 per square foot.

Singles and single parent with children are more likely to buy one bedroom housing. Ripple effects are owners of micro-condos have to proportionately pay more house taxes, education taxes, mortgage interest and real estate fees on less house and less take home pay since these fees are based on price of property, not square footage of the property. When it is sold, will seller recoup buying price?

Financial world for singles and low income continues to be completely flipped upside-down and turned topsy-turvy for housing while the rich and middle-income families pay less and get more.

COMBINATION SINK AND TOILET IN TINY SPACE

As in many parts of the world, parts of Canada are heading for a crisis in affordable housing. Different solutions have been proposed to avert this crisis. One is Attainable Housing, (attainyourhome), for example in Calgary, which allows maximum household income of $90,000 for single and dual/parent families with dependent children living in the home and maximum household income of $80,000 for singles and couples without dependent children living in the home. While this method allows singles and low income to enter the housing market with a low down payment, it does not alleviate the problem of insane upside-down pricing of housing as outlined in the example shown above. Another solution that has been proposed is an affordable housing action plan of inclusionary zoning where a certain percentage of new housing units built would be social and community housing partly funded by government programs, and a certain percentage of new housing units would be affordable rental or ownership housing units built by the private sector. However, developers and the housing associations will argue this will not work (as only new purchasers will be participating) and neighbors continue to have a “not in my backyard” mentality (NIMBY). Tiny house NIMBY mentality also extends to homeowners who don’t want tiny houses near their properties.

Calgary Herald “‘Nothing new’ from housing collective” article, December 16, 2015 (calgaryherald) is a 46 – page document – 18 months in the making – and calls on homeless and housing organizations, the development industry and governments to ‘work together differently’ for at least two years, developing ‘Calgary-based solutions with blueprints for action’ and providing support as required. The mayor, in addition to other parties, is disappointed at how long study has taken and states that ‘time for talk’ is over.

Conclusions about Affordable Housing

There is no affordable housing for singles and low income persons when they are forced to pay more for less space with less income than the rich and middle-class families. Inaction and NIMBY continues to be prevailing principle for Affordable Housing.

Conclusion overall for Renting and Affordable Housing for Singles and Low Income

Options for both renting and affordable housing continues to become more and more out of reach for singles and low income.

So, when both renting and affordable housing are out of reach for singles and low income persons, just what are they to do?

“Eggleton: Canada needs more affordable housing” September 20, 2015 (eggleton) article in the Ottawa Citizen states:

‘I think we all understand intuitively the importance of having decent shelter. A home anchors a person, anchors a family. It provides a foundation for people to move forward toward greater stability in the workplace or higher educational attainment. Health experts also tell us that adequate housing is a key determinant of health and long-term health outcomes’.

This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice.

COUNTRY SHOCKED BY VETERANS HOMELESSNESS

Posted on January 7, 2016 by ffswpadmin

COUNTRY SHOCKED BY VETERANS HOMELESSNESS

(These thoughts are purely the blunt, no nonsense personal opinions of the author and are not intended to provide personal or financial advice.)

March, 2015 study has revealed that approximately 2,250 veterans are homeless.or about 2.7 per cent of the total homeless population (homeless-veterans). There is shock that there are homeless veterans and it took five years to track the data. Average age of homeless veterans is 52 years of age compared to 37 years of age for general homeless population. Review of online information reveals that many veterans joined armed forces because of lack of jobs as in Atlantic Canada, and then come back to again no jobs. Age in fifties also makes it more difficult to integrate back into civilian life. Many of these homeless are single or if married/ partnered suffer broken marriages/partnerships because of the mental stresses of service.

Why should this be shocking when 300,000 Canadian persons or families are waiting for affordable housing ? In addition immigrants are brought into country, given temporary free housing and jobs adding further insult to injury. (In recent news immigrant family,while travelling to Jamaica, found their Canadian-born child is on a ‘no fly’ list – so what is this, immigrant family wealthy enough to have a nice little vacation while Canadian-born persons are homeless or waiting affordable housing?)

The mentality of government, decision makers, businesses and families in this country is to serve only the rich and middle class families while ignoring singles, low income and no income individuals and families. When reading or listening to articles on housing for families, families will always talk about how important their housing is for them in regards to entertaining and maintaining close ties to friends and families. They talk about how their ‘hearts are eternally and inexplicably changed’ when bearing their children, but same hearts appear to become ‘hearts of stone’ when these same children become adult singles, low income or no income persons and families. The greed of business decisions takes over from family values and these disadvantaged persons are tossed out or are considered less important or non-existant in financial formulas and decision-making processes.

Housing is just one example. Those with the money and decision making powers continue the NIMBY mentality where they do not want to see tiny houses or condos in their precious spaces. When tiny condos are built, for example 200 square feet, the purchasers of these spaces are often forced to pay more on less square foot living space and less take-home income than families paying for houses (thus violating Maslow’s Hierarchy of Needs (Maslow%27s_hierarchy_of_needs). One example is a complex in Calgary where the 532 square foot condo is $299,900 or $543 per square foot, and the 1830 square foot condo begins at $649,900 or $355 per square foot. The higher cost per square foot means that tiny space purchasers also will pay proportionately more real estate fees, education fees, house taxes and mortgage interest payments because all these fees are based on the cost of the housing, not square footage. (See November 13,2015 post “Upside Down Finances re Housing for Singles and Low Income” – how is this any different than loan sharking or payday loans?)

Calgary Herald December 16, 2015 article “Nothing New from housing collective” (housing-affordability) (a study going on for 14 months) states:

’Mayor Naheed Nenshi says he’s unhappy with the city’s Community Housing Affordability Collective strategy, but hopeful it’s members now understand the ‘time for talk is over.’

Talk, talk, talk, and study after study without action is just meaningless rhetoric. In this so called democratic, civilized country all persons, whether they are immigrants or Canadian-born, single or married, male or female, low income or no income deserve the same financial dignity and respect such as being included in financial formulas. All individuals deserve a living wage job and a place to live in just like the rich and middle class families.

(This blog is of a general nature about financial discrimination of individuals/singles. It is not intended to provide personal or financial advice).

NEW YEAR’S RESOLUTIONS (FINANCIAL) FOR SINGLES

Posted on January 1, 2016 by ffswpadmin

NEW YEAR’S RESOLUTIONS (FINANCIAL) FOR SINGLES

I resolve to contact my members of government, policy and decision makers and educate them about the financial discrimination of singles.
I resolve to question fees when married/coupled persons (adult to adult) are paying less person to person for two adults than for one adult. (Example: gym memberships when married/coupled persons pay less per person than single persons. It is recognized that children are expensive to raise and, therefore, fees for the children may be free. However, it is financially discriminatory to charge a single adult and a divorced/separated adult with and without children more, adult to adult, than married/coupled adults.)
I resolve to contact my members of government, policy and decision makers and insist that singles (ever) and divorced/separated individuals need to be included in financial formulas, not just married/coupled persons and widowers.

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