THE TRUMP’S FINANCIAL DISCRIMINATION OF SINGLES

THE TRUMP’S FINANCIAL DISCRIMINATION OF SINGLES

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

Ivanka Trump in her speech yesterday at the Republican Convention stated that something needs to be done about single women without children being paid more than married women with children.

Some studies also show that women under the age of thirty make more than men and some studies show that employers don’t want to hire married women with children.

There also has been a lot said about women being paid less than men for the same job, married men being paid more than single men.  There is no doubt that there should equal pay for equal work.

Three different sources are outlined below showing the controversy generated by the facts and whether the fact are really true.

From “Workplace Salaries:  At Last, Women on top”, Time magazine, September 1, 2010 (time):

There has been recent evidence in the USA in many of the largest cities that the median income salaries of young women are 8% higher (and in some cases even higher) than men in their peer group.  However, this gap does not apply to rural areas and disappears for older women, married women and women with children.

However, there also are many factors where perception is false because all the facts have not been taken into consideration.  Some of these facts are:

  • Education.  Women are outpacing men in obtaining degrees.
  • Knowledge-based industries.  Larger cities which tend to have knowledge-based industries will have higher pay.  The decline of a manufacturing base in cities may result in lower wages.
  • Minorities.  Hispanic and black women are twice as likely to graduate from college as male peers.

“The holdout cities — those where the earnings of single, college-educated young women still lag men’s — tended to be built around industries that are heavily male-dominated, such as software development or military-technology contracting. In other words, Silicon Valley could also be called Gender Gap Gully.

As for the somewhat depressing caveat that the findings held true only for women who were childless and single: it’s not their marital status that puts the squeeze on their income. Rather, highly educated women tend to marry and have children later. Thus the women who earn the most in their 20s are usually single and childless”.

From “Fact Check:  Do young, childless women earn more than men?”, September 10, 2014 (abc)states:  data does not hold up because median figures don’t compare people who have the same jobs and qualifications.  They are an aggregate of the salaries of all people in a particular cohort; therefore, figures are misleading.

From “Childless Women in their twenties out-earn men.  So?”, Matthew Rouso, February 24, 2014, Forbes (forbes) :

“Statistics show only the average difference between men and women, across all jobs.  It doesn’t control for the types of job, the number of hours worked or for time taken off (to raise children, for example)….There are differences in job types, education levels, hours worked, and other factors that lead to these wage differentials.  But these factors are just as responsible for the overall difference in wages between men and women.  Once you control for factors such as college major, time off of the labor force to raise children, and hours worked per week, the gender wage gap essentially disappears.  A big part of the difference in pay is due to the choice of jobs:  women choose to enter career fields that pay less than those that men choose.   Women are still more like to be Kindergarten teachers while men are more likely to work in finance.  In short, firms aren’t discriminating against women. The reality remains that women, on average, do earn less than men.  But to blame it on discrimination is misguided.

Solutions to the gender wage gap aren’t simple.  Taking time off from a job, or working fewer hours, will reduce one’s earning potential, but many people (rightly) relish the opportunity to take time off to raise children.  There are no easy policy recommendations to deal with the loss of earning power for those who take time off to raise children.  But there is one thing we can do that would decrease the gender wage gap with no negative consequences: ensure that women are encouraged to pursue work in high-paying industries….Women may earn less than men, but causes are more complex than the cries of discrimination we hear from politicians.  When politicians mislead the public on this issue, the consequence is our delay in solving the real problem”.

Comment on Ivanka Trump’s statement:  It is difficult to find the source of her information.  Whatever the source is, what is more disturbing is the continuous reference by politicians and business people to marital status when human rights policies specifically state marital status should not be used in employment.  If Ivanka Trump wants to deal with married women’s pay, then she should address all other employment discrimination such as married men being paid more than single men.

TAX REFORM:  DONALD J. TRUMP FOR PRESIDENT (donaldjtrump)

Donald Trump as part of his bid for President platform has outlined his suggestion for tax reform.  A direct quote from his reform states:

“If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households – over 50% – from the income tax rolls…..All other Americans will get a simpler tax code with four brackets – 0%, 10%, 20% and 25% – instead of the current seven. This new tax code eliminates the marriage penalty and the Alternative Minimum Tax (AMT) while providing the lowest tax rate since before World War II.”

Comment of Donald Trump’s Tax Reform:  Here we go again, past posts have shown that cost of living is higher for a single person family unit than a married or coupled family unit without children.  This once again shows the financial illiteracy and ignorance regarding singles’ finances by politicians and business persons.  We do not know all the details of American tax system, but Trump cannot just give a figure for singles, and then multiply it by two for married or coupled family units.  Finances for singles don’t work that way.  The cost of living for a single person is higher than the cost of living for a family unit of two married or coupled persons, so why should married/coupled family units get the benefit of double tax free income?  Marriage penalty???  What about all the marriage benefits that married or coupled family units receive?  He also includes a separate column for head of household in his four tax brackets.  There is no explanation of what head of household includes, so it is difficult to know what this tax group is all about.

Financial discrimination will continue if singles figures are just multiplied by two to arrive at married family unit figures.  When, when are politicians and businessmen going to drop the marital status designation and use family units as the designated standard? Why can’t tax reform be more progressive instead of using same old financially discriminatory practices?

Cost of living equivalence scales such as the square root equivalence scale show that if a value of ‘1’ is used for a single person family unit, then the value of ‘1.4’ is applied to two adults, ‘1.7’ is used for two adults one child, ‘2.0’ is used for two adults two children and ‘2.2’ is used for two adults three children.

CONCLUSION

It is pathetic that marital status continues to be used a standard for tax, hiring and income policies when this is a direct violation of human right and civil rights.  It is absurd how married or coupled family units (including the Trumps) continue to protect their own interests without including all family members in financial formulas and favouring married family units over single person family units.

Ivanka Trump says married women are being paid less than single woman.  If one considers that most of management and business persons who do the hiring and determine the income schedules are married, then married people are the ones guilty of committing the wrongful acts against themselves, so don’t go blaming singles for this! There are many who do not like unions, but at least they pay the same wage for the same work without inclusion of marital and sex status.

Married and coupled women with children want it all.  They want employment time off for their children and then want full compensation even for the years they haven’t been working. If married women take time off to be with their children, they are not going to have the same level of work experience as a single person who has continuously been employed. When are married and coupled women ever going to realize that they can’t have it all while taking singles down to a standard of living that is lower than theirs?

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

BOUTIQUE TAX CREDITS PUSHING SINGLES INTO POVERTY-Part 2 of 2

BOUTIQUE TAX CREDITS PUSHING SINGLES INTO POVERTY-Part 2 of 2

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

six-reasons-why-married-coupled-persons-are-able-to-achieve-more-financial-power-wealth

(The last two posts discussed how detrimental boutique tax credits can become to the financial well-being of a country and its citizens.  These were based on ‘Policy Forum:  The Case Against Boutique Tax Credit and Similar Expenditures’ by Neil brooks (abstract).

This post itemizes four personal finance cases showing how certain family units may benefit far more  than other family units like ever singles and singles with children).

CASE 1 – Financial Post Personal Finance Plan, June 11, 2016 – ‘Farm Plan Risky for Couple with 4 Kids’ (financialpost)

Ed age 32 and Teresa 33 have four children ages 5, 3, 1 and newborn in British Columbia. Ed works for a government agency, Teresa is a homemaker.  At age 32 and 33, already have a net worth of $502,000 ($208,000 home not in the Vancouver area fully paid and $177,000 land with $37,000 (21%) mortgage.  They would like to sell their house, move out of town and set up a small farm.  Ed would give up his government job and secure income by selling eggs and produce.  Would like to retire with about $4,000 in present-day dollars and after tax.

Ed brings home $2,680 per month plus tax-free Canada Child Benefit (CCB) $1,811 for their four children, all under the age of 6 for total family disposable income to $4,491 per month (CCB is about 40 per cent of take-home income.  (When all four children are ages 6 to 17, the CCB will be $1,478 a month based on 2016 rates).

Financial Planner’s Recommendations – Maximize Registered Education Savings Plans (RESP), so they can capture Canada Education Savings Grant (CESG) of $500 per beneficiary for total of $7,200 (three per cent annual growth after inflation would generate about $270,000 or about $67,500 per child for post secondary-education).  Advice is that Ed continue working until the age of 60 and when the youngest child is 18.  Advice is also given for purchase of the farm, details of which will not be discussed here.  Each spouse would add $5,500 to their TFSAs for every year until Ed is age 60.

At retirement, if Ed retires at age 60 and Teresa continues as a stay at home spouse, in 2016 dollars they would have a total pre-tax income of $68,495, or $5,137 per month to spend after 10 per cent tax and no tax on TFSA payments.  At age 65, they would have total income of $86,163 with no tax on TFSA payouts and pension and age credits or $6,460 a month to spend.

If they follow financial planner advice for retirement at age 60 and maxed out contributions of RESPs and TFSAs, rough calculations show they will have received approximately $339,000 child benefits, $308,000 tax free TFSA savings  and $28,800 RESP government grants for total $675,800.  This does not include all possible benefits from other sources such as provinces, GST/HST credits and interest generated from investments.  If Ed is deceased before Teresa, as a widower Teresa will receive even more benefits as a survivor with survivor pension benefits.

All things remaining the same their assets at age 60 with farm/house $485,000, RRSP $48,000, and TFSA $349,000 will equal a total of $882,000.  So, at age 60 they will have assets close to millionaire status while paying very little in taxes.  (Financial Post rating – two stars out of five).

CASE 2 –  Financial Post Personal Finance Plan, March 24, 2016  ‘Couple sick of existing like college student are living below their means, but could still use a financial tuneup’ (financialpost)

Ontario couple Mark 45 and Cathy 43 have two kids 9 and 12 and bring home $8,670 per month ($7,000 from jobs and net rent income $1,670 from two rental properties that produce good income  in North).  At ages of 45 and 43 they already have assets of $1,480,272 including RRSPs of $300,322, liabilities of $536,315 for net worth of $943,957. Their two cars are 10 and 15 years old.  They feel like they are living like college students. Mark’s job is not secure and produces a lot of stress. They have not contributed to children’s RESP and 130 year old house requires repairs.

Financial planner advice is to restructure their finances, put money into RESPs for children and maximize RRSPs.  Both spouses have defined benefit pension plans from past employment..

At retirement pensions, RRSP, rental income and CPP/OAS at age 65 would generate  pre-tax income of $105,672.  After age and pension splitting, after-tax income at 16% tax would be about $7,400 a month.  Financial planner states they would have surplus income for travel and pleasure which they now forego, (plus they will still have assets of home and rental properties). (Financial Post rating – four stars out of five).

 

 

CASE 3 – Financial Post Personal Finance Plan, May 21, 2016 ‘Home Ownership Possible but Tight’ (financialpost)

Jessica, age 54 lives in Ontario and has three grown children.  She would like to buy $150,000 house in small town Ontario.  Assets are $40,000 LIRA, $2,400 in TFSA, $10,000 RRSP and $19,000 in company defined contribution pension plan, car $10,000 and debts of $10,700 for $70,400 net worth total.  Her take home pay is $3,315 per month. She puts $240 in TFSA, $100 in RRSP and $300 in non registered account per month. “Her outlook is to retire in 10 years, but that will be struggle.  She has to make a middle income (so stated) go a long way”.

Financial planner advice is to pay off debts in nine months.  Advice is given for purchase of a home with three per cent twenty five year mortgage and saving for retirement but it will be on a financial shoestring.  At retirement and after age and pension credits and 10% tax, she should have take home pay of $2,300 per month.  Final comment:  “her retirement will be hostage to unexpected expenses.  But she will have the security of a home of her own”.  (Financial Post rating two stars out of five).

CASE 4-Public Service Canadian employees

In same job/wage categories with 2013 annual income around $67,000 for never married singles, no children (calculations may vary slightly in provinces regarding tax and other deductions) approximate payroll deductions include income tax $11,000, CPP and EI $3,200, union dues $900, public pension contributions $5,300, RRSP deductions $3,500, parking $1,200, health premiums and insurance $600, for total of $25,700.  This leaves $41,300 take home yearly income or $3,441 per month.

personal finance cases 1

personal finance cases 2

CONCLUSION

The above four cases show four distinctly different cases, two family units with children, one single parent family unit with children and one family ever single family unit.

  • It is astounding how two parent family units with children can accumulate wealth while single parent and unattached person family units struggle to live on on $3,300 and $3,400 after tax dollars per month or $39,600 and $40,800 annually while working and into their retirement years.
  • It is absurd that tax credits should comprise 40 per cent of a family’s income when  they have the ability to become wealthy enough to not have to pay mortgage or rent. In some provinces, singles cannot have assets of more than $7,000 to get affordable housing, so why should families have assets of half a million dollars and still get full child tax credits?
  • It is absurd that a family unit never pay full taxes at any time during child rearing years only to have the ability to retire early at age 60 and have more retirement income than they had during child rearing years  and have paid little or no taxes.
  • It is absurd to claim poverty because of what it costs to raise children when in age thirties and forties family units with children already have assets of half a million dollars and higher.
  • It is absurd that married/coupled family units with children in retirement pay less than 20 per cent in taxes on very healthy retirement incomes because of pension spitting and other credits.  Where is fairness when they pay same or less level of taxes as singles on lower incomes?
  • Financial planner calls Jessica’s income middle class, but she has difficulties living on it.
  • Married or coupled family units possibly have a much better retirement life than singles in family units with and without children.  (Singles with children generally have the greatest financial struggle).
  • Life during working years is just as difficult for singles as it is for married or coupled family units.
  • Government, politicians and families need to consider all family units in financial formulas.  These should be based on equivalence scales to provide financial fairness for all family units.  Financial fairness should include not only income, but also assets.
  • It should also be stated that when examining many of the Financial Post profiles for divorced persons with children, particularly those beyond child rearing years, many appear to have assets beyond $750,000.  How is this possible?  One reason might be inherited wealth.  Second reason which has been stated over and over again in this blog is the ability for married/coupled persons with children family units to gain wealth and, therefore, already have considerable wealth when they are divorced later in life.

LESSONS LEARNED

IT IS INHERENTLY WRONG FOR GOVERNMENTS TO NOT INCLUDE ASSETS AS WELL AS INCOME WHEN DOLING OUT TAX CREDITS.  THESE CREDITS SHOULD BE GIVEN TO THE POOR, NOT THOSE WITH LOW INCOME AND WEALTHY ASSETS.  BETTER YET,  TAX CREDITS SHOULD  BE COMPLETELY ELIMINATED AND REPLACED BY TAXES WHICH ARE BASED ON  INCOME AND ASSETS.

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

REAL FINANCIAL LIVES OF SINGLES

REAL FINANCIAL LIVES OF SINGLES

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

It seems governments, decision making bodies, families and married/coupled people have difficulty understanding that many singles are in as much financial distress as they are. They perceive singles to have spendthrift lifestyles and to be poor managers of their finances.  To show how untrue this is, five cases are presented here.  Four of the cases are employed singles or divorced persons; fifth case is a wealthy widower already retired.

CASE STUDIES

Case 1-Tanis age 54, November 2, 2013, Financial Post Personal Finance Evaluation, “Frugal Lifestyles Reaps Rewards” (business.financialpost)-Single 54 year-old (divorced in 2002, left with debt of $40,000 which she paid off in five years) has take-home income of $48,000 annually ($80,000 pretax?). Two children are financially independent.  She would like to retire between age 65 and 67.  To save, she buys clothes at thrift shops, has hair done by students and volunteers at events so she can see them without charge.  Assets $215,000 home, $75,000 vacation cottage $8,500 car, $149,925 RRSPs, line of credit $8,500, mortgages $201,374 with net worth of $239, 551.  She is anxious to sell vacation property as occasional rentals are not covering mortgage costs.  Article states she has turned frugality (financial distress) into a financial strategy.  Total monthly expenses are $3,996.  She has no money left for emergencies, replacement of vehicle, or other unexpected expenses like dental, vision care or medications.  Elimination of vacation condo mortgage, fees, insurance and line of credit would free up $1500 monthly for these financial realities. If she takes advice of financial planner (2013), she should have retirement income at age 66 comprised of $12,240 employee pension, CPP $10,840, OAS 7,008, investment income of $12,516 and $12,465 from other savings for total before tax income of $55,069 or $3,900 a month after 15% average income tax.

Case 2-Public Service Canadian employees in same job/wage categories with 2013 annual income around $67,000 for never married singles, no children (calculations may vary between provinces regarding tax and other deductions).  Approximate payroll , deductions include income tax $11,000, CPP and EI $3,200, union dues $900, public pension contributions $5,300, RRSP deductions $3,500, parking $1,200, health premiums and insurance $600, for total of $25,700.  This leaves $41,300 yearly take home income.

Case 3- Doris  age 63, October 12, 2013 Financial Post Personal Finance Evaluation, “The choices:  Be a good grandma and poor or work and retire happy” (pressreader)-This generous 63 year old grandmother (divorced or single with a grown child?) has total before tax  income $47,600 ($41,600 annual earnings and receives $6,000 from roommate with whom she shares apartment). Car worth $3,000 and $10,000 line of credit for negative net worth of minus $7,000.  She is barely making ends meet now.   Monthly expenses are $3,100 per month.   Question asked: can she quit work at age of 63 and babysit granddaughter for $500 a month?  Answer is a definitive ‘no’.  She is better off to work to age 65 to get full job and Canada pensions and then could give $500.00 to daughter (who earns similar salary as her mother) to help with daycare costs.  Best financial situation is to work until age 70 to maximize her own pension and have extra money as contingency.  At age 70 she will have after tax income of $3,800 a month.  As a renter this single has to work well beyond age 65 to avoid poverty as a single senior.  (She is very generous.  If there is problem with expenses, should she be contributing $116 to her granddaughter’s RESP?  Also food budget is high at $375, but some of this might be for granddaughter and is renter paying for own food?)

Case 4–Georges age 51, August 15, 2015, Financial Post Financial Evaluation, “Should he buy first house at 51? (business.financialpost)-Georges is a production line supervisor who rents and has total net worth of $152,000.  Current after tax income is $50,244 or $4,187 per month.  Financial planner states that Georges’ problem is very simple; he cannot afford both to buy a home and build retirement savings.  Repeat:  this man, who has appearance of a responsible productive citizen working at supervisory level, is making $81,600 a year, but has been told that he cannot afford both.  Financial planner says alternatives are to buy smaller (translation cheapest) home or get better paying job. At age 65 and still renting, his projected before tax retirement income is $55,258 (with OAS at 67), and 22% tax, after tax income will be $3,590 a month with $949 surplus to do with whatever he wants.  How generous and fifteen years later his apartment will be how old with no refurbishments and likely increases in rent!!!  (Georges does have very high food and restaurant expenses.  Further economies could be achieved by reducing these expenses.  His travel costs also appear very high; however, there is no mention that he owns a vehicle so some of the travel costs may be for transit and taxi costs.  Living wage for Guelph and Wellington suggests  $221  for transit and taxi for a single person.)

Case 5-Philip  age 78, October 26, 2013 Financial Post Personal Finance Evaluation, “Strategy:  Cut the taxman’s bite” (pressreader) -Widower 78 years old wants to keep as much as of his $1million net worth for his two sons, but can no longer pension income split.  His pre-tax income of $79,450 and taxable dividends puts him in danger of 2013 OAS clawback. The article states ‘that is unfair to every person who has taxable dividends and receives OAS.  In this case his sons will receive less inheritance.  It is the fact of life for every widow and widower.’  Wow, that really is a financial hardship for him (and his sons who will receive large inheritances)!!!  How the taxes were calculated for this person is not clear.  At one point, it is stated that taxes plus OAS clawback gives a total of 48% income tax payable.  Yet, his $66,000 income per month out of total $80,000 before tax income equals a deduction of only 18%.  After expenses, it is amazing that he is able to put $3,000 into his TFSA and savings accounts.

financial case profiles

ANALYSIS

  • Frugal financial lifestyle – Many singles are frugal because they have to be (Tanis).  Word ‘frugal’ used by financial planners respectfully describes financial distress of singles.  Why not call it was it is, a  poor financial quality of life?
  • Good incomes, but have difficulties living on them regardless if renting or paying  a mortgage– Some singles in these cases are making around $80,000 before tax income which is far above average before tax incomes of many singles and families in Canada.  The MoneySense 2015 All Canadian Wealth Test (wealth-test-2015-charts) (based on 2011 Statistics Canada data) shows that the top 20% quintile of unattached individuals have incomes over $55,499.  Unattached individuals in the middle 20% quintile have incomes from $23,357 to $36,859 and are considered to be middle class.  But are they able to live a middle class or wealthy lifestyle with these incomes?  If singles are having a hard time living on $50,000 plus incomes and are unable to max out their TFSA and RRSP accounts, there is something very wrong with financial systems for singles in this country (including lower income singles). Married/coupled people are quite often able to buy additional properties like rental and vacation properties, but then have to sell them (Case 1 – Tanis) when they become single because they can’t afford them.
  • Good incomes, but it doesn’t matter how much more singles make they still gain very little from increased income.  With every $20,000 increase in income they are lucky to get maybe extra $500 a month or $6,000 a year.  This is 30% gain in disposable income to 70% loss in deductions.  If Georges gets a higher paying job, he will likely be in a higher tax bracket. (added April 27, 2016)
  • Financial planners say it is not possible for singles to have a mortgage and save at the same time, can only do one or other.  They also tell single to get better paying jobs (but Case 4 – Georges already has a very good paying job at $81,000). – When singles are already working at very good salaried and management jobs earning $60,000 to $80,000, these are not $15 per hour jobs but $30 to $40 per hour jobs.  It is also bizarre when financial planners state these high paid singles are not able both to save for a house and save for retirement and should get better paying jobs ( Case 4 – Georges).  What does this mean, singles are only able to rent and cannot have mortgages except with $100,000 plus income jobs?  Another example is MoneySense April, 2016 “Budget Basics” (moneysense) – Lindsay is 29 year old engineering consultant from British Columbia who earns $71,000.  She owns an affordable $150,000 condo (housing costs are just 30% of her income which is nearly unheard of in British Columbia) and has $46,000 in RRSP and TFSA savings (saves 20% of her salary at $400 to her TFSA and $220 to her RRSP- RRSP is matched by her employer).   She wants to save for a bigger condo so she can have a dog and a garden.  The problem, though, is her expenses are surpassing her income.  She has $11,000 line of credit and $15,000 car loan.  The suggested financial action plan is to rethink her budget and to track her true expenses, subtract them from her net income and then reallocate what is left to savings.  She is in good financial shape, but she is trying to accomplish too many things at once (so stated in article).  In other words, it is very difficult for singles to have a mortgage and save at the same time even with good salaries.
  • What expenses are missing from budgets for most singles (can’t afford)? 
  • Dental, medical, medication
  • House maintenance
  • Extra monies for savings/emergencies
  • Restaurants/vacation/entertainment
  • Computer and repair, paper, ink
  • Replacement of vehicle
  • Other fees and expenses like library/recreation/fitness/magazines, books, etc.
  • Car license, registration, motor association fees
  • Professional association fees which can be very expensive depending on profession
  • Public Service single employees during employment or retirement are not as rich as everyone thinks – Singles with public service jobs (you know those people who make so much more than private sector employees and have outrageous pensions) often don’t have any more take home pay than private sector employees.  The public pension benefits must come from contributions during their working years leaving them financially stretched during their working years (this is not a bad thing as this is income being directed to savings).  Pensions on retirement are taxed at same rate as married persons and pension splitting is not available for singles.  Survivors pensions paid to widowers are subsidized by contributions of single employees.  Many singles with or without company pensions don’t have any more income in retirement than they had during employment.  If they are paying rent or mortgage they often are as poor during retirement and have no extra money for emergencies, replacement of vehicles and medical expenses.  (They may have a better quality of life during retirement if they own their own home and are not paying rent.  In these cases the only deductions public service individuals have any control over is the personal RRSP contribution).  Based on 15 year service as public service employee and rough calculation of retirement, take home income at age 65 is may be about $3,400 a month with rent or mortgage possibly not paid in full; therefore, these persons will have to draw from savings to pay expenses or work past the age of 65.
  • Unused RRSP and TFSA contributions – Most singles, unless they are wealthy, will have multiple unused room in RRSP and TFSA savings plans because of inability to max out contributions.
  • Married/coupled persons (many, not all) have unrealistic sense of entitlement and want it to continue throughout their lives from time of marriage to date of death – Case 5 – (business.financialpost) Philip wants to keep as much of his $1million net worth for sons’ inheritances, but doesn’t want OAS clawback on his income and taxable dividends.  Some married/coupled people with huge financial assets don’t want to give anything up (David 71 and Celeste 63, August 8, 2015, Financial Post Personal Finance Evaluation, “Couple fears shift to pension income”) (business.financialpost).  If they have problems during retirement, how about selling their $355,000 USA condo and winter at home in Canada?  Herb and Isabel at age 37 have so much wealth, $1.8 million, they can take two year out of country vacation and retire early and wealthy even though they have two children (Herb and Isabel, August 22, 2015, Financial Post Personal Finance Evaluation, “Vacation, Retirement hinge on real estate” business.financialpost).
  • Marital status or state of being married does not mean married people are any better at managing their financial affairs than singles (David and Celeste-need financial planning as disinterested investors with $ 1.9 million net worth, and Patricia 53, August 29, 2015, Calgary Herald, Financial Post Personal Finance Evaluation, “Debt clouds dreams of retirement at 60” who has monthly after tax income of $15,000) (pressreader).
  • Many married/coupled persons can retire before age 65, while most singles know they can’t retire until age 65 or beyond (Case 3 – Doris)
  • Shouldn’t financial systems be well planned to ensure all citizens (singles and young people) can live decent respectful financial lives without help from their parents and/or inheritances and without marital manna benefits?

CONCLUSION

Singles deserve same financial dignity and respect as married/coupled persons.  Singles need to be included in financial decision making and formulas at 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.

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

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.

moneysense cost of retiring well

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.

ARE FAMILIES REALLY MORE FINANCIALLY INTELLIGENT IN MANAGING FINANCES?

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.

 

COUNTRY SHOCKED BY VETERANS HOMELESSNESS

 

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).

 

SENIOR SINGLES PAY MORE – PART 2 OF 4

FINANCIAL FAIRNESS FOR SENIOR SINGLES NOT PART OF PLAN

(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).

This article was published in a local newspaper on August 19, 2015. The Conservative Party was in power federally at the time. In the October, 2015 federal elections the Conservatives were ousted by the Liberal Party. Proper names have been removed.)

In the midst of a Federal Election the financial rhetoric continues. The Conservative Member of Parliament, Wildrose, in his latest mailbox flyer, states that Conservatives have been committed to helping provide Canadian seniors with a secure and dignified retirement. The reality is that married/partnered people stand to gain much more from the Conservative Action Plan 2015 and other Conservative financial initiatives than individual/single seniors.

First, increases in the contribution limits of the TFSA account favors married/partnered people as the contribution limit per person is doubled. (The doubling of the TFSA was rescinded by the Liberals when they came into power in the October, 2015 federal election).

Second, pension splitting benefits applies only to married/couple people, not singles.

Third, the Age Credit benefits initiative increased by an amount of approximately $1,000. This benefit is incrementally reduced by 15% of net income exceeding approximately $35,000 and is eliminated when net income exceeds approximately $80,000. Any unused portion of the Age Credit can be transferred to the individual’s spouse or common-law partner. Comparable benefit of unused portion to individuals/singles without a spouse/common-law partner is zero.

Fourth, in the targeted tax relief benefits a senior couple can earn $40,720 without paying income tax (marital manna benefit), while a single senior can only earn $20,360 before paying income tax.

Fifth, Allowance for people ages 60 to 64 benefits are available to the spouses or common-law partners of GIS recipients. The spouse, age 60 to 64, of a senior with a single income of less than $31,584 may receive an allowance of $1,070.60 per month. This is an additional $12,000 per year. Furthermore, this benefit may also be available to immigrant married/coupled people who have been in the country for only ten years. Canadian-born and immigrant individuals/singles have nothing comparable to this benefit.

These are just a few of many more examples.

The following tables showing the income and net worth/wealth of unattached individuals versus families of two or more have been taken from MoneySense, The All-Canadian Wealth Test, January 2015 (moneysense) (based on Statistics Canada 2011 data)

____________________________________________________________________

INCOME TABLE

______________________________________________________________________________

INCOME

HOW DOES YOUR PAY STACK UP

_____________________________________________________________________

Quintiles                    Unattached Individuals        Families of Two or More

Bottom 20%                 $0 to $18,717                         $0 to $38,754

Lower-Middle 20%        $18,718 to $23,356                 $38,755 to $61,928

Middle 20%                  $23,357 to $36,859                 $61,929 to $88,074

Upper-Middle 20%         $36,860 to $55,498                $88,075 to $125,009

Highest 20%                 $55,499 and up                      $125,010 and up

______________________________________________________________________________

NET WORTH TABLE

____________________________________________________________________

NET WORTH

ARE YOU RICH?

______________________________________________________________________________

Quintiles                     Unattached Individuals        Families of Two or More

Bottom 20%                 Negative to $2,468                  Negative to $67,970

Lower-Middle 20%         $2,469 to $19,264                   $67,971 to $263,656

Middle 20%                   $19,265 to $128,087                $263,657 to $589,686

Upper-Middle 20%         $128,088 to $455,876              $589,687 to $1,139,488

Highest 20%                 $455,877 and over                   $1,139,489 and up

______________________________________________________________________________

An individual/single person who has an income of more than $55,000 is considered to be in the top 20% ‘wealthy’ category, but has great difficulty living a ‘wealthy’ lifestyle on $55,000 especially if they have a mortgage or need to pay rent in their senior years (meanwhile wealthy family income is $125,000 and up). Women between ages 45 and 64 earn on average $23,000 less than men.

What is even more revealing is the net worth of unattached individuals compared to families of two or more. The MoneySense article makes the following comments:

“The collective net worth of the lowest 40% of individuals wouldn’t match the poorest 20% of families. Families can build wealth faster than individuals because they can pool resources, which enables them to pay down debts faster and make larger purchases. And what a difference it makes: between ages 55 and 65, families are worth, on average, a whopping $670,000 more than unattached individuals in the same age group”.

 

(It should be noted that the net worth is probably even higher for families of two or more, since it appears that single parents with children are included in families of two or more statistics.  Single and divorced/separated parents of children, especially if younger in age, should excluded from families of two or more and placed into  their own category for more accurate statistics -added January 20, 2016).

It is always prudent to have more than one source for verification of facts, so here are another two.

The “Current State of Canadian Family Finances 2013-2014” report by the Vanier Institute of the Family vanierinstitute.ca states that

“between 1999 and 2012 the net worth of families advanced more than it did for unattached individuals”.

The 2009 “Report of the National Seniors Council on Low Income Among Seniors” (seniorscouncil) states that:

“between 1980 and 2006, the unattached have the highest incidence of low income of any group, with 15.5 percent of unattached seniors living below LICO in 2006, a rate 11 times higher than that of senior couples (1.4 per cent)”.

So how can married/coupled people continue to demand more financial benefits? How can governments continue to increase the financial means of married/coupled people at the expense of unattached individuals/singles? And, how expensive is it really to raise children when families can achieve so much more net worth than singles? Financial fairness requires balance and elimination of unfair benefits such as income/pension splitting and ability to transfer credits from one spouse to another.

The Conservative MP claims to “stand up for Canada’s seniors who have helped make Canada the strong and prosperous country it is today”. However, this holds true more for married/coupled people in Canada than it does for individuals/singles. In his flyer, the Conservative MP wants feedback on the question “Am I on the right track to deliver support to seniors?” For senior individuals/singles the answer is a resounding and unequivocal “NO”.

Individuals/singles need to stand up, speak out and make facts such as the above known to their members of Parliament, those with decision-making power, and families. Individuals/singles need to decide which political parties are detrimental to their financial health and vote for the party which best meets their financial needs in the Federal election. They need to demand financial sensibility and equality. Financial discrimination of one segment of the population over another is a blatant violation of human rights and civil rights.

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