EVALUATION OF MONEYSENSE ARTICLES RE THE COST OF RETIRING WELL: COUPLES VERSUS SINGLES, DECEMBER, 2014 AND JANUARY, 2015.

Posted on March 27, 2016 by ffswpadmin

EVALUATION OF MONEYSENSE ARTICLES RE THE COST OF RETIRING WELL: COUPLES VERSUS SINGLES, DECEMBER, 2014 AND JANUARY, 2015.

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

SOURCES OF INFORMATION FOR THIS BLOG POST

MoneySense, December, 2014, “The Cost of Retirement Happiness” by David Aston (couples) /the-cost-of-retirement-happiness/

MoneySense January, 2015, “Single Retirees: The Power of One” by David Aston (singles) /single-retirees-the-power-of-one/

Kudos to MoneySense-they are one of the few sources of information that identify what it truly costs singles to live in comparison to married/coupled persons.

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The above articles for couples and singles were presented in two different timeframes by MoneySense. financialfairnessforsingles.ca thought it would be an interesting exercise to combine the figures from both articles and complete an analysis of the figures for the married/coupled retirees versus the singles retirees. (It is important to note that the definition of ‘single’ status by MoneySense is not the same definition used by financialfairnessforsingles.ca and Statistics Canada. The only person who is truly single in the six profiles is Spencer as an ‘ever’ single person (never married, no children), while Reynolds is divorced and McDonald is widowed. This is based on and justified by the Canadian Income Tax forms where the status of the tax filer has to be entered re status of married, single, divorced/separated or widowed and Statistics Canada definitions of marital status).

MoneySense Comments on Retirees Incomes

Couples – According to MoneySense author, a couple should be able to have a middle-class retirement lifestyle spending $42,000 to $72,000 a year including income taxes and assuming there is a paid-for home and no debt. After tax, that will leave about $38,000 to $62,000 a year to spend as couples choose. The minimum of about $38,000 (excluding taxes) should be sufficient to cover the basics, including operating a car and eating healthy. Money Coaches Canada advises keeping annual spending on the basics within the $25,000 to $35,000 range, while trying to ensure there is at least $10,000 for extras, (Dec. /14, article).

Singles – According to MoneySense author, a middle class single retiree should count on spending approximately $30,000 to $50,000 a year including taxes and assuming there is a paid-for home and no debt. This is about 70% of what is required for a couple since it costs about 70% of the couple’s rate for a single to maintain the same lifestyle as a couple.

For $30,000 income, taxes would be about $2,000 to $3,000 for older singles and $3,800 to $5,100 for younger singles below age 65. After taxes and if budget is tight, singles should allow at least $20,000 to $25,000 a year for the basics (including shelter, groceries, transportation and clothing) and at least $5,000 for the extras like entertainment and travel, (Jan. /15, article).

Detailed Financial Information

Couples

Case #1 – It is stated that the Taylors live frugally but comfortably. They have a paid-for three-bedroom home in a nice neighborhood and a ten-year old mid-level car. They eat out occasionally and take regular vacations. They spend just over $25,000 on the basics, which leaves enough left over to spend almost $12,000 on the extras. They both have university educations and held high-paying jobs in the technology industry while raising one child, who now lives independently. Their modest spending habits allowed them to build their savings quickly while working, so they were able to retire in their early 50s and have a large nest egg.

Many advisers tell prospective retirees that they need to replace 70% to 80% of the peak income they had while working, but the Taylors live on less than 20% of the $250,000 they earned while working.

Case #2 – The Statscan couple depicts the average spending by senior couple. (Source: Statistics Canada, Survey of household spending in 2010) plus inflation adjustments using the Consumer Price Index.

Case #3 – The Coopers, both close to 70, have lots of money to do the things they consider important, but don’t live a lavish lifestyle. They spend modestly on the basics, which leaves plenty for the extras that give them the most satisfaction, like travel. Their basic spending, at just under $45,000, isn’t much more than that of the Statscan couple. But by economizing on the basics, they can afford to spend about $36,000 on the extras. They learned frugality early on in life. During their working years, they lived on his public sector professional salary while she had primary responsibility for the household and raising three children. They also benefitted from his pension plan and saved by living well within their means and invested wisely. They have two vehicles (buy them used and keep them well beyond ten years). Now they have far more money than they need to support their accustomed lifestyle.

The Coopers love to spend money for the benefit of their extended family. They have a two-bedroom condo in the city as well as a vacation property. They use their $16,000 travel budget for regular vacations. They even spend some of their budget to cover the cost of extended family joining them on vacation. They also contribute to their grandkids’ RESPs. And while the $6,000 they budget for charitable and personal gifts is not enormous, they have distributed around $500,000 to their kids over the years to give them a good start.

Singles

Case #1 – ‘Ever’ single Spencer is in her early 60s and had to stop working at her physically demanding public sector job over a year ago due to a repetitive stress injury. She hopes to return to work in some role, but even if she is unable to work again she feels she can live comfortably and sustainably on what she now has in savings, as well as government and employer pensions. She has a $38,000 budget and pays $5,000 in income tax. Based on having a paid-for home she will spend about $23,000 on basics which leaves about $10,000 left for the extras. She recently made the choice to move to a small town, mainly for the small town lifestyle, but also for the lower cost of living as well. Money has been set aside to purchase a modest home. (She does state that earlier in life she had some bad spending habits; however, she has learned to make careful, purposeful spending choices).

Case #2 – Reynolds in her early 60s (split up with her partner about ten years ago and no children?) is intent on making the most of retirement and has above-average means to do so. Recently retired after a career in the public sector, she has a budget of $73,000 a year, including about $33,000 for the basics, and a sizeable $25,000 for the extras. She likes to travel and has about $6,000 a year allocated to it. In the early years of her career she was fixated on saving, which helped provide the ample nest egg she has today, including a group RRSP.

Case #3 – McDonald, a widower in his late 60s, has an above average budget of about $81,000, including $41,000 for the basics and $21,000 for the extras. He uses his money to support hobbies, travel and spending on his two grown children and their families. He is trying to find a balance between spending his money and leaving a large legacy. He takes two to three trips a year with his $10,000 budget. His budget also covers some travel for his children and relatives. He spends quite a bit on groceries and restaurants, including paying for meals with extended family. He happily spends less than his ample means would allow.

Qualifying Statements by MoneySense about the two articles

The MoneySense author along with Money Coaches Canada notes that the category ‘shelter’ includes property taxes, utilities, maintenance, house insurance, rent and mortgage payments. Case #3 Statscan figures include a small proportion of costs attributable to a second home. For the ‘vehicle’ category, $2,000 a year has been added for depreciation. The category ‘home and garden’ includes cleaning supplies, furnishings, appliances, garden supplies and services. The category ‘recreation and entertainment’ includes computer equipment and supplies, recreation vehicles, games of chance, and educational costs.

The author also makes the following qualifying statements: “If you are single, you know that retirement planning is tougher for you than it is for couples. You have no one to rely on but yourself, and you can’t share expenses or split income. As a result, you can’t just take the cost of retirement for couples and divide it by two. Situations vary, but a single person will need to spend roughly 70% as much as a couple to enjoy an equivalent lifestyle in retirement…The figure for couples isn’t twice the figure for singles–it is only about 40% higher because spouses are able to share costs for things like housing and cars. The higher per-person income singles need also results in higher taxes”.

Table

The following table combines the financial profiles of the three couples and three singles from the two articles into one table.

Following the table are financialfairnessforsingles.ca comments evaluating the results of the financial profiles.

Analysis of the Financial Profiles of Couples Versus Singles

Marital Status

First, it is important to get one fact straight. Couples who divorce/separate and persons who are widowed are not singles. The only person who is truly single in the six profiles is Spencer as an ‘ever’ single person (never married, no children). The profile of the ‘ever’ single person shows that she is likely at the bottom of the financial status list in terms of wealth as she is the one with a modest home in a small town where it is cheaper to live. The separated person likely has a better financial profile because she was able to accumulate wealth as a coupled person for twenty-five or thirty years and was separated later in life (if she had separated earlier in life, she likely would have a financial profile more equal to the ‘ever’ single profile). All of the other profiles show that they have more wealth and homes in nice neighborhoods and even second homes (Coopers).

Benefits

Marital status also determines who is likely to have more benefits. It can be assumed that the couples have the higher financial status simply because they are married or widowed. The married profiles will most likely pay less income tax than the single profiles because couples receive two of everything, have the ability to pension split and can get survivor benefits when widowed, etc. As retirees, the two profiles that lose on benefits are the ‘ever’ single person and the person who is separated.

It is stated that most of the couples have lived so frugally that they now have more money than they need, but at same time have three bedroom houses in nice neighborhood, vacation home, and can retire in their 50s and 60s with a very comfortable lifestyles. This implies, even with frugality, they had plenty of money to spend and save as married/coupled families with children.

The single person is the one that has to move to a smaller town to lower living expenses while others are living in what appears to be substantial housing.

Taxes

On examination of the profiles, it is easy to see that the persons who are paying the most taxes are the ever single person, the separated person and the widowed person. The Taylor couple pays the same taxes as the ‘ever’ single person (Spencer), but they have approximately $5,000 more in income and appear to have much more wealth in terms of assets (must be the pension splitting). It pays to be married. The Statscan couple pays less income tax (almost one half of the amount equal to 13.4%) than the separated Reynolds person (20%), but her income does not come even close to double of the Statscan couple. The Coopers are paying only $20,000 on $100,000 income (20%).

The widowed person (McDonald) with all of his wealth is most likely receiving survivor benefits. Did he pay extra for these benefits and why is he portrayed as being single? If he is now single why should he receive anything more than the ‘ever’ single person and the separated person?

Benefits to Families of Coupled People

The profiles of the coupled persons and the previously coupled person (widower McDonald) blatantly state that they have more money than they can spend and have given generous monetary gifts, paid for the meals of their kids, grandchildren and extended family members, etc.

Married/coupled people or previously coupled people are often able to give exorbitant gifts, inheritances, etc. to family and extended family. Does this not create a sense of entitlement for family, children and grandchildren who begin to expect this all the time? How does this extravagance teach frugality?

Emergency Monies

Where in any of these profiles has money been set aside for emergencies? The person most likely to be unable to pay for financial emergencies due to illness, financial issues, etc. is the ever single person with the least accumulation of wealth.

Education, Education, Education!!!

It is beyond comprehension on how governments, families, society and think tanks lack knowledge and are financially illiterate on the true facts of how ‘ever’ singles and divorced/separated retirees are financially robbed to subsidize married/coupled retirees by paying more taxes while getting less benefits like pension splitting and widower benefits in this country.

Singles require 70% of the income/wealth of Couples

How many ways can this fact be stated and how many different sources of information does the government and society need to make changes on how singles are financially discriminated against in this country?? Do Members of Parliament ever think to include singles when making important decisions like pension splitting and benefits that benefit only the married/coupled and families of this country? Government, businesses, society and media only ever talk about middle class families. Singles meanwhile have been financially discriminated against by their government and society.

How expensive is it to raise a child?

So how expensive is it to raise one child, two children, and three children and still come out on top in terms of wealth in the personal profiles? Governments, society and families, think tanks continue to talk about how expensive it is to raise a child, and yet many families are able to leave large legacies/inheritances to their children. Unfortunately, based on the facts this seems to be based on the half-truths and lies of governments, society, families and think tanks.

Profiling

Singles are often profiled as having excessive spending habits/lifestyles while married/coupled persons are usually profiled as being frugal. Married/coupled persons in their retired state are still profiled as being frugal even though they can give extravagant gifts (in one case around $500,000) to their children and grandchildren and spend more money on items like vacations.

Happy, happy, happy!!!!!

In both articles the profiles and the author comments seem to imply that everyone is happy, happy, and happy with their financial status. ‘Ever’ singles and divorced/separated retirees are blatantly told they should be happy with what they have even though they have been discriminated against financially.

‘Ever’ single persons and divorced/separated persons not so lucky to have achieved equivalent wealth (70%) of married/coupled persons as shown in above examples wish to state they are not happy with being financially discriminated against on every level of government and society. They are not asking for more than married/coupled people. They are asking for financial fairness.

FINAL STATEMENT

Governments, businesses, society, families, think tanks all maintain that the middle class is being affected most by poverty. The real truth is that ‘ever’ singles, singles with kids, persons divorced/separated early in marriage/coupling, and families with low incomes are being affected most by poverty. Singles (‘ever’ and divorced/separated) in this country are not happy with always being excluded from financial formulas and conversations. They are human and in their humanity are equal to married/coupled people, and it is time that they are treated with the same financial fairness, dignity and respect as married/coupled people.

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

INCOMPLETE REPORTING OF NEWS AND MEDIA ARTICLES PROMOTE FINANCIAL INEQUALITY OF SINGLES TO MARRIED/COUPLED PERSONS

Posted on March 24, 2016 by ffswpadmin

INCOMPLETE REPORTING OF NEWS AND MEDIA ARTICLES PROMOTE FINANCIAL INEQUALITY OF SINGLES TO MARRIED/COUPLED PERSONS

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

While it is recognized that news and media articles are limited by space, often what is left unsaid promotes financial inequality of singles in comparison to married/coupled persons. Also, the misinformation of research and studies is perpetuated by other organizations picking up the misleading information and reprinting it.

Examples are as follows:

“Four Ways Senior Singles Lose Out” by Ted Rechtshaffen (outlined in Dec. 2, 2015 blog post /false-assumptions/). Rechtshaffen’s article left ‘ever’ singles and early in life divorced/separated persons out by exclusion because the definition of single status was incorrectly used. Instead, the ‘singles’ he referred to are actually widowers. He stated 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, but only mentions widowed and later in life divorce/separated persons. There is no mention of tax systems including ‘ever’ singles and early in life divorced persons.

This article was republished by CARP carp/ (Canadian Association of Retired Persons) and was sited in other news media outlets such as Financial Post financialpost, and National Bank Clear Facts clearfacts.

“An Analysis of the Economic Circumstances of Canadian Seniors” by Richard Shillington of Tristat Resources and the Broadbent Institute (February 28, 2016 blog post continued-financial-illiteracy-of-financial-gurus) was sited in several news articles as follows:

Huffington Post, Daniel Tencer, February 16, 2016 “Are Canadians Ready for Retirement? Not Even Close, Broadbent Institute” (huffingtonpost.) states:

‘Half of Canadians aged 55 to age 64 who don’t have an employer pension have less than $3,000 saved up for retirement.

Nearly half (47 per cent) of Canadians aged 55 to 65 without an employer pension and earn $50,000 and $100,000 a year have saved an average of $21,000.

Among those who earn $25,000 – $50,000 and don’t have an employer pension, the average savings is a paltry $250.

Median Income for single seniors-At the same time, the study says social support for retirees has become less generous. Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) have fallen behind over the decades, and now give seniors just 60 per cent of median income, down from 76 per cent in 1984.

The report comes as the federal government launches pre-budget consultation hearings. Though the study doesn’t delve into specific policy options, it says the Liberals’ plans to increase the GIS for singles retirees will make little dent in senior poverty.

The plan “should remove 85,000 senior singles from the poverty rolls — leaving 634,000 seniors living in poverty,” the left-leaning Broadbent Institute said in a statement.’

Globe and Mail, Shawn McCarthy, February 15, 2016 “Many Canadians entering retirement with inadequate savings, study (theglobeandmail) says:

‘Income trends suggest the percentage of Canadian seniors living in poverty will increase in the coming years, especially for single women who already face a higher than average rate, the report said. The poverty rate for seniors will climb at the same time as a sharply rising number of Canadians hit retirement age in the next two decades; more than 20 per cent of the population will be older than 65 within 10 years.

Ottawa’s pledge to increase by 10 per cent the guaranteed income supplement – paid out to the poorest seniors – would cost $700-million and remove 85,000 single people – mostly women – from the poverty rolls. But that would still leave 634,000 seniors living below the poverty line. And that number will grow dramatically in the coming years.’

Global News, Monique Muise, National Online Journalist, February 16, 2016 “Canadians nearing retirement with ‘totally inadequate’ savings (globalnews): study” observations are much the same as outlined above.

creb now (Calgary Real Estate Board) February 19 to 25, 2016, “Canadians ill-prepared for retirement” (crebnow) study observations are much the same as above, but also adds statement:

‘Already, the spread between the OAS/GIS guarantee levels and the low-income measure for 2015 – the spread that seniors need to fill using the Canada or Quebec Pension plans (CPP/QPP), private pensions and private savings – is about $5,600 for single seniors and $4,700 for couples. The overall median value of retirement assets of those aged 55 to 64 with no accrued employer pension benefits (representing 47 per cent of this age cohort), is just over $3,000.’

Also in big letters ‘Amongst Canada’s single persons without pension income, the median income in under $20,000’.

Not one of these articles mentions from the Broadbent Institute study that when using LIM the poverty rates for singles seniors is nearly 30 per cent. Also, the proportion of the population receiving the GIS (Guaranteed Income Supplement for Canadians in poverty) is higher for senior singles (including widowed) living alone than couples, and higher for single women (between 44 per cent and 48 per cent) than for single men (between 31 per cent and 37 per cent). It also does not mention that reliance on the GIS is greater for single seniors that it is for senior couples across all age ranges.

In addition there are 719,000 seniors living below the poverty line. This total includes 469,000 senior singles and 250,000 living in an economic family. This is 65 per cent of singles in comparison to 35 per cent living in an economic family! Sixty-five percent of singles, why is this never reported? Why is the full information of singles finances never worthy enough to report with same equality as families?

Some of the articles above also mention the the new GIS increase of 10 per cent for single seniors “should remove 85,000 senior singles from the poverty rolls — leaving 634,000 seniors living in poverty.” Statement with full truth should read: “should remove 85,000 senior singles from the poverty rolls – leaving 634,000 seniors (384,000 senior singles and 250,000 living in an economic family)”. This still leaves more senior singles in poverty than those living in an economic family! ‘Half truths’ reporting sometimes is almost as good as telling a lie!

What also is not mentioned by the media is that the Broadbent Institute study does not treat home ownership as a retirement asset. The report states:

‘This analysis has not treated home equity as a retirement asset because the replacement rate analysis has as its objective an income that allows one to enjoy a lifestyle comparable to that which existed pre-retirement. We do not include home equity here because we accept that the pre-retirement lifestyle for many middle- and moderate-income Canadians includes continued home ownership’.

Home ownership is a big factor in determining the standard of living for seniors in their retirement years. Statistics Canada 2011 shows approximately 69 per cent of Canadians own their own home. About four out of five (82.4%) married/coupled people own their home, while less than half (48.5 per cent) of singles own their home. Paying rent will have much more impact on poverty than owning a home outright.

CONCLUSION

To provide the real truth about singles’ poverty all it would have taken is the addition of 10 – 20 words to the articles (719,000 seniors live below the poverty line. This total includes 469,000 senior singles and 250,000 living in an economic family. The GIS increase for senior singles still leaves 634,000 seniors – 384,000 senior singles and 250,000 living in an economic family in poverty).

The GIS increase of 10 per cent for senior singles is a paltry amount compared to all the marital manna benefits that has been given to married/coupled persons like pension splitting.

The sad reality is that by omission of singles from the conversation true facts of singles finances are never fully reported; therefore, there is little understanding on the part of married/coupled persons, families, government, businesses, and decision making bodies on what it truly costs singles to live. Singles need to be included in financial formulas at the same level as married/coupled persons and families.

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

REWARD PROGRAMS BENEFIT MARRIED/COUPLED PERSONS AND FAMILIES MORE THAN SINGLES

Posted on March 10, 2016 by ffswpadmin

REWARD PROGRAMS BENEFIT MARRIED/COUPLED PERSONS AND FAMILIES MORE THAN SINGLES

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

In the last post money programs such as the Alaska Permanent Fund Dividend program was discussed on how these programs benefit married/coupled persons and families.

This post discusses ‘freebie’ programs like fuel discounts, and giveaways like glassware, etc. Safeway Canada in Alberta will be used as the company of choice in the examples outlined here (note: reward programs may vary from province to province). A family of four will be compared to a single person’s grocery budget. For ease of comparison a family grocery budget of $840 a month or $210 per week will be used and for a single person $200 a month or $50 per week (remember, previous reader opinion letters have stated singles should be able to live on $200 a month for groceries /reader-opinion-letters/). For ease of comparison a vehicle with 100 litre fuel capacity will be used for both family units and singles, even though it is recognized families are more likely to have vehicles with larger fuel capacity than singles.

(Caveat: food budgets are dependent on region, what is included in food budget and the age of the children. Some regions have very expensive food costs, some budgets include paper and cleaning products, and food budgets will increase as children get older.)

Present Safeway ‘freebie’ programs running at the present time include:

Fuel – Spend $35, get 5 cents off per litre
- Spend $70, get 6 cents off per litre
- Spend $105, get 7 cents off per litre
- Spend $210, get 10 cents off per litre
Air Miles Points program – Collect 95 cash miles – get $10 off grocery purchase (for comparison here only the coupon for ‘spend $100, get 100 air miles’ once per month will be used. Additional air miles for buying certain products will not be used as it would be too difficult to calculate).
Glassware (Spiegelau) program – collect stamps from Oct 30, 2015 to March 3, 2016. For every $10 spent in groceries, one stamp would be received at the checkout. For every 50 stamps collected, purchaser would be eligible for one pair of glasses (for example, white wine, red wine glasses, etc.). Safeway retail price stated in brochure is $39.99 for a pair of glasses.

COMPARISON

Fuel – For comparison purposes here, it will be assumed that families will spend $210 per week on groceries and, therefore, will receive 10 cents off per litre of gas. For a vehicle with 100 litre fuel capacity requiring a complete refuel, the fuel discount would be $10 times four weeks for a total of $40 per month for a family and $5 time 4 or $20 a month for a single. The total discount for four months for a family would be $160 for a family and $80 for a single; therefore, totals of $160 and $80 will be entered on chart.

Air Miles – If coupon ‘spend $100, get 100 air miles’ is used once per month families would be able to get a discount of approximately $40 on groceries (for every 95 Air Miles get $10 off) for four months, while singles would not be able to use this coupon as they have not spent $100 to get 100 air miles points. On chart $40 will be entered for families and $0 will be entered for singles.

Glassware Rewards – Groceries by family at $840 per month times four months equals $3360. This amount divided by $10 equals 336 stamps divided by 50 stamps gives possibility of acquiring 6 sets of glassware (2 glasses per set). The value of six sets of glasses at approximately $40 or $240 will be entered on the chart.

Groceries for a single person at $50 per month equals $200 times four months for a total of $800. This amount divided by $10 equals 80 stamps divided by 50 stamps gives a single person the possibility of acquiring only one set of glasses (2 glasses per set). The value of one set of glasses at approximately $40 will be entered on the chart.

FINAL EVALUATION

For this particular example, families have been able to receive rewards totalling approximately $440 to that of $120 for a single person. Married/coupled persons would probably fall halfway between families and single persons.

It should also be noted that even more rewards are possible if, for example, charge cards with reward points are used to buy groceries provided that the charge cards are paid every month in a responsible fashion so as not to have to pay interest charges.

It is also recognized that those ‘with the money’ (for example, the rich, middle class families and married/coupled persons) will be able to acquire more rewards value , than the poor and singles because the setup of the reward programs makes it possible for those ‘with the money’ and families to get more rewards.

LOST DOLLAR VALUE

This list is still a work in progress. However, for the list a ’lost dollar value’ for singles $240 for fuel rebates will be used ($160 minus $80 times three for total of 12 months). The only ‘lost dollar value’ that will be added to the list is the fuel rebate as this is the only constant available and easily calculated for an entire year. (Lifetime total age 25 to 85, $240 times 60 years equals $14,000.)

CONCLUSION

Initially, examination of the fuel discount program reveals that this is a good program for those with less money to spend as only $35 needs to be spent to get a 5 cent discount, but $210 (six times more in dollars) needs to be spent to get 10 cent or double discount. However, in the end, extra dollars spent on groceries and stacked rewards still means family of four will get a greater discount than the single person.

Manipulation of reward point programs can also occur in many ways. It is known that some spouses of married/coupled persons and families will split the grocery bill between them. A family with a $210 grocery bill will split bill between each spouse at $105 to each get 7 cents fuel discount and 100 air miles Each spouse can fill up their vehicles once week and get 7 cent discount.

What can one say about rewards programs? Not much, except to say that reward programs benefit the rich, married/coupled persons and middle class families the most. Can anything be done to level the playing field on reward programs for the poor and singles? Probably not, except maybe to put a cap on the programs or eliminate them completely. Elimination would mean everyone would be on level financial playing field with everyone paying same price.

Once again, most married/coupled persons, families and rich are completely unaware of the financial power and advantage they have over the poor and singles. And, imagine what other financial advantages are out there as this is only one reward program out of many.

The benefits of reward programs are in the eye of the beholder. Of course, those who benefit the most relish the thought of accumulating whatever they can, often tier upon tier upon tier. Many believe that one should be rewarded more if one spends more, even if it is at the expense of the disadvantaged and those who have limited food budgets.

And, it does not help for singles to band together (for example two people)to buy groceries as half a discount on a tank of gas is only half a discount. Half of a set of glassware is only one glass. Singles are told over and over again that they spend too much. The reality is that reward programs force them to pay more and get less for the necessities of life like groceries.

“OUR BIG FAT WALLET” BLOGGER’S OPINION -new-pilot-program-are-bigger-fuel-discounts-ahead/

The blog “Our Big Fat Wallet” talks about reward programs in the post ‘Safeway’s New Pilot Program: Are Bigger Fuel Discounts Ahead?’ Some interesting comments are made on reward programs as well as reader comments as follows:

“Tiered Savings Programs

I’m hoping the pilot program is implemented permanently and other stores follow suit by increasing their fuel savings.

Ideally I would like to see stores have a tiered savings program like Safeway – that rewards bigger spenders with bigger savings. I like to eat – a lot – so our grocery costs tend to be higher than most.

A tiered savings program would benefit anyone who spends a decent amount each month on groceries and if all stores implemented a similar program, it wouldn’t matter what store you buy your groceries at.

If you spend more than $200 in-store, you should be rewarded with a larger fuel discount than someone who only spends $35. With food prices climbing higher and higher, it’s becoming even easier to reach new heights on grocery bills so any additional discount at the pumps would help.

Reader comment:

Interesting! When will we know whether the “test program” is put in for good? I’m secretly hoping it is as my husband and I spend way more on groceries than we should so any place we can save a buck or two helps

Another reader comment:

I love fuel money tied to grocery stores. Where I live, gas prices are provincially regulated, so there is no option of driving down the street a kilometer and saving an extra $0.02/L, so these programs are the only way to get discounts.

A while ago, Sobey’s had a deal where if you bought $200 in GCs you would get $0.10/L off. And you could stack them. Then, if you used them at their gas station, you got $0.035/L to use in the grocery store. It was an awesome circle because you sometimes they’d let you buy gift cards with other gift cards. We got a few very cheap tanks of gas, LOL.

“Our Big Fat Wallet Blogger comment”:

I actually didn’t know gas prices could be provincially regulated. Using gift cards to buy gift cards – now that’s a sweet deal!

Another reader comment:

It’s really nice that it works in your favor, especially since you spend a lot on groceries. Well, hopefully they will implement it permanently!

“Our Big Fat Wallet” Blogger’s response to this reader’s comment:

I am hoping they will implement the program for good and that other retailers will be forced to offer more incentives so we can all start to get bigger fuel discounts”

This concludes the post.

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

MONEY BENEFIT PROGRAMS FINANCIALLY BENEFIT MARRIED/COUPLED PERSONS AND FAMILIES MORE THAN SINGLES

Posted on March 7, 2016 by ffswpadmin

MONEY BENEFIT PROGRAMS FINANCIALLY BENEFIT MARRIED/COUPLED PERSONS AND FAMILIES MORE THAN SINGLES

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

Married/coupled persons and families often receive ‘free money’benefits that financially benefit them much more than singles.

Two very good examples of these benefits are the Alaska Permanent Fund Dividend and the ‘Ralph Klein $400 Bucks’ Program.

Alaska Permanent Funds Dividends

The Alaska Permanent Fund Dividend (PFD) program implemented in 1982 is an annual payment paid to individuals (children as well as adults) rather than households. It is paid irrespective of any income from other sources and does not require the performance of work or the willingness to accept a job if offered. Unlike social assistance programs, it is not means-tested.

The book “Alaska’s Permanent Fund Dividend: Examining Its Suitability as a Model”, edited by Karl Widerquist and Michael W. Howard states the following:

‘…..In 2008, when the PFD reached its highest level at $2,069, the individual poverty threshold in the United States was approximately $11,000; for a family of four it was approximately $22,000. Thus, at its highest level, the PFD would have provided less than 20 percent of the income necessary for an to individual to reach the poverty threshold, but almost 40 percent of the income necessary for a family of four to reach the poverty threshold……Thus, on basis of its level alone, the PFD is at best a partial basic income…

Finally, because of its flat and universal nature, the PFD on its own makes a very modest contribution to the reduction of inequality. But the PFD together with the elimination of the state individual income tax that was part of its founding has an overall regressive effect on income distribution. To have a significant redistributive effect, the PFD would have to be recouped from wealthy individuals; in the absence of a progressive state income, consumption, or wealth tax, the PF would have to be distributed on a sliding scale with larger dividends given to those with less income from other sources, rather than as a uniform flat payment….

The PFD does serve as an excellent model for the conceptualization of natural resources as commonly owned—an important step along the path to acceptance of the idea of a basic income. It provides a model of cash transfers to individuals without any stigma of dependence, fraud, waste, or failure—attributes often attached recipients of other government cash transfers. The PFD’s funding source in natural resources rather than in taxes on individual income or wealth seems to exempt it recipients from any need to justify their use of the dividend, and to exempt the transfer as a whole from the ‘socialist’ label….’

It has been argued that it is preferable to have oil profits distributed broadly rather than end up in the pockets of only a few corporate executives, wealthy shareholders, and political cronies.

Alaska is the only state that does not collect sales tax or levy an individual income tax on any type of of personal income, either earned or unearned. Every Alaskan, children as well as adults, receives a payment each year from the Alaska Permanent Fund Corporation. The USA does not have child benefits, although there is a child tax credit system for parents or guardians of children under 17 who meet certain requirements. (The PFD is taxable by the Federal government).

Further review of information shows that in 2002, the poorest 20% of Alaskans relied on their dividend for 25% of their total income….some Alaskans depend on their dividend for up to a quarter of their yearly income, especially Native Alaskans, who make up 15% of the population. Those in poverty brackets and many of those living a subsistence lifestyle cannot afford to lose the dividend as a source of income.

However, review of articles on this program also states that the sense of entitlement has been established where it is very difficult to reduce state spending in this particular benefit at the expense of politicians losing their jobs, because state residents view these dividends as ‘rights’, not ‘privileges’.

One could argue that monies are being given to children who have not earned that privilege. They have earned no money and have not paid any taxes.

If one looks at the PFD contributions over a twenty year period (lifetime of a family with children) in comparison to singles /individuals, the financial unfairness becomes apparent very quickly. From 1996 to 2015,the benefits have ranged from a low of $846 to a high of $2,072 annually. For a family of four the twenty year total amounts to $113,156 and for a single/individual person the amount is $28,289. A lot more can be done with $113,000 than $28,000.

Prosperity Bonus (‘Ralph Klein $400 Bucks’) Program

The Prosperity Bonus, also nicknamed Ralph (Premier of Alberta at that time) bucks, announced in September 2005, was the name given to a program designed to pay money back to residents of the province of Alberta as a result of a massive oil-fuelled provincial budget surplus. This program gave $400 to every citizen of Albertan in the year 2005.

For a family of four, the benefit was $1,600, while a single/individual received $400.

ANALYSIS

‘Free Money’ Benefits allow families to achieve greater wealth than singles/individuals even though the children of these families have not earned any income or paid any taxes. Married/coupled persons without children also achieve greater financial benefits because of accumulated assets times two.

SOLUTIONS

To achieve greater financial equality between singles/individuals and married/coupled persons and families, the following suggestions are submitted:

Eliminate children from these programs until they reach the age majority since they have not made any contributions to the coffers in the form of salaries or taxes; rather, they are using resources such as education instead of contributing to them.
Top up benefits to singles at rate of ~~70 percent~~ 1.4 Market Basket Measure to that of married/coupled persons as it costs more for singles to live than married/coupled persons living as a single unit (updated August 31, 2018).

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

HOW MARITAL STATUS IMPACTS DEDUCTIONS, CREDITS FOR MARRIED/COUPLED PERSONS

Posted on March 2, 2016 by ffswpadmin

HOW MARITAL STATUS IMPACTS DEDUCTIONS, CREDITS FOR MARRIED/COUPLED PERSONS

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

(While researching online for information on last two posts, this article came up: “Love and taxes: Canadians confused on how marital status impacts deductions, credits” by Darah Hansen and published in Yahoo Finances on February 12, 2016 just before Valentine’s day. This article and the comments following the article provide some interesting insight into thoughts of Canadian citizens on reporting of marital status on income tax forms. This article and comments is also a good follow-up to the information entered in the last two posts.

Comments of the author of this post are shown in italics.)

Quotes From Article

Quote from article states:

‘Recent survey by Leger, on behalf of H&R Block Canada, found that more than half of us mistakenly think that married and common-law spouses can file a joint return to save money on their taxes. Another 40 per cent believe it’s up to us to decide whether to claim our marital status on our tax returns, while a handful of respondents doubt the CRA (Canada Revenue Agency) has guidelines to determine that status.
Couples are required by law to check the correct status box in tax forms.
Family incomes in Canada are not combined for the purpose of calculating tax; however, they can be for the purpose of calculating income-tested benefits, such as the GST/HST credit or the National Child Benefit supplement.
Couples also stand to benefit from combining their charitable donations, transit passes and medical expenses.
And, new this year, parents of children under 18 years stand to gain from a newly announced federal tax credit. Often referred to as the “family tax cut”, the new measure allows a higher earning spouse to transfer in kind up to $50,000 in income to his or her spouse in order to collect a tax credit of up to $2,000.Canadian taxpayers are required by law to answer the marital status question correctly. “If you lie, it’s tax fraud,” says Golombek…..
To be considered common-law, two people must live together in a conjugal relationship for 12 months or immediately if you have a child together. If you receive benefits you are not entitled to because of an incorrect marital status, you can bank on being asked to repay them.
One final misconception: About 44 per cent of Canadians believe that once you are divorced, you can claim as single the following year. But once you have filed as married, you can never claim single. You are instead classified as separated, divorced or widowed’, (end of quote).

Comments from Readers

The comments following the article, of which there were many, resulted in very different viewpoints. Indeed, some comments turned out to be very derogatory and inflammatory as often occurs in forums of this kind. Families with children call singles ‘selfish’ and single call families with children ‘breeders’, etc. Analysis of the comments revealed some commonalities.

A large majority of Canadian citizens, it seems, don’t have a clue about declaration of their marital status on income tax forms, especially those that are married, divorced, separated, or living common-law. Canada Revenue Agency (CRA) has very clear definitions of marital status, so why the confusion?

Some of the reasons why incorrect reporting of marital status on income tax forms are as follows, (these are comments that were submitted by the readers):

Unhealthy or unequal relationships with their significant other.

One comment: ‘good luck in filling as common-law in my case my partner refuses to file common-law, said his taxes are complicated, and we been together now for 5 years. I look at it he is hiding something and don’t want me to know his business.’

Some don’t seem to want to record their marital status as outlined in CRA rules. One of the biggest issues on recording marital status seems to revolve around those that are divorced/separated and what they will have to give to the other spouse in the way of child and spousal support.

‘Once you are legally married you can never again claim “single”. If you divorce, you must say “divorced”, even if you were divorced 40 years ago. If you remarry, of course, you then check the “married” box once again. Until your partner dies, whereby you become “widowed” until you remarry or die yourself. To be “common law” you will have been living together for 12 months prior to filing your taxes, – or right away if you have a child together and it happens to be less than that. (Even if divorced for many year, marital status would still be divorced).’
‘Making a “stupid decision” not to inform CRA about this issue will often come back to bite you.’
‘There are more tax breaks for single moms then for being married. It is actually scary to tell them when you finally do get married. There goes everything.’
‘Seems strange, usually you marry the mom not the kids. Not sure why she would stop getting benefits to support her kids. Note to self, stay clear of single moms and the tax man will pin you with the responsibility.’
‘So why (does) Revenue Canada have different category for divorced people? to have a reason to garnish… They do this because people who are separated or divorced often have separation agreements/court orders for making support payments. Spousal support payments are taxable in the hands of the recipient and deductible for the payer. Since there are no slips that go with these payments they want to make sure that both parties are claiming it or including it correctly (i.e. not just being deducted by the payer and not included in income for the recipient).’

Many income tax filers have no clue what benefits they will get and how marital status will affect those benefits. Married/coupled persons don’t seem to realize they will receive more benefits throughout their married/coupled lives than will singles, particularly ‘ever’ (never married, no kids) singles.

‘Single working professionals get taxed the hardest with the fewest deductions.’
‘There is no benefit in being married. Stay single especially single mothers.’ (Married/coupled persons seem to never be happy with the benefits they get).
‘don’t forget to add to move in with your boyfriend either, if you want the benefits or to minimize your tax, of course based on that rationale they should struggle on one income just to get benefits is quite irrational thinking.’ (This presumably was a tongue-in-cheek remark to the above comment.)
‘You may not see the benefits of being married when it comes to taxes, but financially there are a lot of benefits to not be single. Sharing costs like same housing is huge and when finances are done with purpose in mind can lead to wealth creation.’ (This is known as being able to live more cheaply because of economies of scale-Six Reasons why Married/Coupled Persons able to Achieve More Wealth). six-reasons-why-married-coupled-persons-are-able-to-achieve-wealth/
‘But there is no denying that two people going in the direction accomplish way more than one person by him/herself….. those who stay together are better off statistically in a financial sense than those who go about it alone.’ (This is because of ability to accumulate wealth times two persons and ‘rule of 72’ -Six Reasons why Married/Coupled Persons able to Achieve More Wealth)
‘Couples can transfer unused credits to each other. Singles lose unused tax credits.’ (This is because of marital manna benefits – Six Reasons why \Married/Coupled Persons able to Achieve More Wealth)
‘I was once told by my neighbour that he and his wife would be better off financially if they divorced. Obviously not ALL Canadians are confused about tax credits and deductions. (Next comment) Not so. Couples can transfer unused credits to each other. Singles lose unused tax credits.’ (This is known as manipulation of assets as stated in ‘Six Reasons why Married/Coupled Persons able to Achieve More Wealth).
‘I have never paid more than what I owe based on my income whether single, married or divorced. The only difference it makes is for benefits like GST rebates, etc….’
‘Family incomes in Canada are not combined for the purpose of calculating tax.’
‘They are only combined for potential benefits such as GST tax credits… etc…..you can transfer unused tax credits to lower the spouse’s taxable income, thereby reducing their taxes. CRA combines them for the purpose of calculating GIS benefits and HST refunds.’

Some tax filers choose to falsely record their marital status, though they know they are committing fraud.

‘Most Canadians play dumb as they are fully aware they are breaking the rules and pretend like they didn’t know. They cheat hoping they will not get caught.’
‘If you are married the tax form asks for your spouse’s name, SIN and whatever.’
.It’s not your fault you didn’t get caught. It is your fault for claiming single while married. Let me simplify this for you. Two scenarios. Husband and wife. Both make $35k. If they claim single each pays tax on $35k. If they claim married EACH pays tax on $35k. The combining is only for tax credit purposes. Percents don’t change due to marriage or not. Govt fraud is irrelevant to this conversation. And if it is true… then so what … two wrongs make a right? Seriously you need to get professional advice. Just because you have not ‘been caught’ yet does not mean it won’t happen. You are cheating and if you are getting tax credits fraudulently, you will pay a penalty if caught.
For those who don’t think there are repercussions to false filing, you can view the convictions from each province at Google “CRA Criminal investigations actions, charges, and convictions”.

Many more comments were made and are too numerous to be included here.

CONCLUSIONS

If there is confusion about how to record marital status on tax forms, get professional help.

Incorrect filing of marital status on tax forms constitutes fraud.

Education, education, education – married/coupled persons need to educate themselves on all the benefits they receive from date of marriage to after their spouse is deceased. They need to realize that singles have been left out of financial formulas and do not receive benefits such as transfer of spousal credits, pension splitting, tax relief if one spouse is in nursing home, etc. even though it costs singles more to live than married/coupled persons living as a single unit.

Singles deserve to be included in financial formulas at 70% of that given to married/coupled persons. Many singles have worked throughout their entire lives (35, 40, 45 years) and,with their taxes have supported married/coupled persons and their families; therefore singles deserve equal financial representation in financial formulas.

Problems that divorced/separated persons have with spousal/child support, etc. should not be the problem of singles and should not be a reason to say that ‘singles’ are lying on tax forms (especially ‘ever’ singles who only have one option to record on tax forms, that is ‘single’).

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