Chapter 30: Tsunami Redux

Going one more round with the wave that never was.

There are some issues that refuse to go away. Of the stubborn ones that assail our community, the notion of the Grey Tsunami is the most intractable and pernicious. I’ve written before about this charge – that our demographic wave is of the “tidal” variety, representing mortal danger for the rest of the world, especially youth, who will go bankrupt paying for the entitlements of our dotage – and now I find myself having to write about it again because the calumny just won’t go away. And I doubt that this will be the last time, either.

What makes the J’accuse so formidable, of course, is the fact that, on a certain level, it’s true: the great post-Second World War boomer generation was indeed unprecedented in number and, consequently, that cohort remains extremely powerful today.

So, dire statistics are easy to generate. Diseases associated with aging are rising at unheard of rates – diabetes alone will cost the health-care system more than $17 billion in the coming year – while the growing proliferation of retirement homes attests to the numbers of clients expected shortly.

Yes, our very large gang is undeniably getting older, but that doesn’t mean we’re automatically getting duller or frailer. As I pointed out in Chapter 8, “The Myth of the Looming Health-Care Crisis” (which was primarily about matters physical), better education, nutrition, medicine and peace in our time mean that the majority of aging people are actually healthy. Seventy per cent of 70-year-old Canadians are either in “very good or perfect functional health.” It’s only in the last year of life, typically, that health-care needs become intensive (and that’s true of sick young people, too).

Yes, Alzheimer’s rates are rising, but so is the extent of medical research and the march of technology. Considering the advances of the past 20 years, I have no doubt that mortality statistics that today seem designed to make us feel apprehensive and guilty will soon be offset by organizational, cultural and technological progress on the health science side. For example, when special geriatric clinics are opened in hospitals, failing people return home more quickly and spend more meaningful, less expensive, remaining time there.

But what really energizes me these days in the battle against the Great Cliché is a new counter-argument that has to do with finance. All too often, all we hear about is the doom and gloom of how much we’re going to cost. But, actually, the real issues are “what we have” and “how we’re going to use it.”

An article by Michael Callahan on retirement planning in the September 2012 issue of Forum magazine points out that boomers control a staggering amount of Canada’s wealth. To clarify just how staggering, Callahan cites a study by Investor Economics Inc. It reveals that more than 70 per cent of the country’s wealth is in the hands of boomers. Nor is that 70 per cent concentrated in some hypothetical upper one per cent. In fact, wealth is remarkably evenly distributed over most of our numbers.

How? Meet the “Hidden Millionaires.” Although the number of those employed by government (various levels, different jobs) in Canada has been decreasing steadily since the early ’90s, as of the last year for which data was available, there were 76 Canadians being paid by some level of government for every 100 Canadians working in the private sector.

Government jobs are noteworthy for providing very solid, ample pensions. In addition, although the private sector has been shrinking its recipient pool since the 2008 financial crisis, there are still almost as many pensioned workers in the private workforce as there are in the public – close to three million. Salaries and rates will vary, but it’s not extravagant to estimate that a teacher, say, or a long-time worker in a large private company might retire with a pension of $50,000 to $60,000 annually. (Many teachers at the secondary level do better than that.) This amount is paid out as long as the pensioners live. Given today’s interest rates of about two per cent, how much money would a person have to have in order to achieve an annual income of $60,000? $3,000,000! So our teacher or corporate pensioner is effectively a millionaire three times over – as are hundreds of thousands of other government and private industry employees with similar deals. In fact, they’re better off than someone who merely has $3,000,000 in the bank because, in the bank or elsewhere, invested returns are subject to the vicissitudes of the market with its shifting interest rates and levels of risk.

So, what does this mean for those doomed-to-be-destitute younger generations? It means that parents and grandparents will be able to pay for the extras that their children and grandchildren may desire or require. Not only will the Gen X and Gen Y, or Millennials, not be bankrupted by the Grey Tsunami, it’s the Tsunami that will likely bail them out.

That same Forum story reveals that the 60-somethings are on the verge of inheriting more than a trillion dollars from their 90-something parents in what economists are calling “the biggest transfer of wealth in Canadian history.” And what do these boomers plan to do with their windfall? According to a report from the Royal Bank of Canada, 61 per cent intend to pass money on to their children while they themselves are still alive because “they want to see their children enjoy their lives.” Only seven per cent are certain that they won’t give anything to their children during their lifetimes (reasons: they require the money themselves; they feel their children don’t handle money well; their children need to make their own way in the world; or, simply, kids should wait till their parents die). All of which amounts to a trillion or so more reasons why that infamous Grey Tsunami begins to look more like a long, large Wave of Gifts rolling in.

What about the ancillary charge that we refuse to retire and make way for younger workers? Aside from the fact that it’s contradictory – you can’t upbraid us for retiring in droves and becoming dependent and then condemn us for staying at work – by not retiring in the same old way, we lessen the probability that we’ll end up on the public dole. Instead, it’s likelier that we’ll stay financially independent and continue to pay tax. And it’s not as though, by working into old age, we’re violating the natural order. The fact is that “retirement” is a very new idea historically. A hundred years ago, virtually nobody retired. A hundred years from now, that may also be the case. The way of the world is that a majority of people are going to need and want to keep working, partially for financial reasons, partially out of personal preference: for socialising, to have a reason to get up in the morning or in response to the impulse to not simply be a taker but a giver.

This is not to say that the public system that encompasses aging can’t be improved; to save money and especially to benefit that portion of our cohort that is seriously in need.1 For example, the federal government recently legislated that anyone 52 or younger would have to wait until age 67, as opposed to 65, to collect their Old Age Security benefit. A lot of CARP members weren’t happy with this decision. But that two-year difference constitutes a massive saving, which could then be used to better support those who reach their 60s and 70s naked, without any supplementary pension or health plan at all.

Similarly, the system could also encourage more saving for personal use by loosening the RRSP regulations. The deadline for winding down an RRSP has already been raised from 69 to 71; why not push it to 75? If we’re moving the typical pension age from 65 to 67 (and, eventually, 70?), why not let us save longer as well? And while we’re at it, even when we’re forced to convert our RRSPs to RRIFs, why not give the latitude to take out less than is now required, so that we can retain more funds into our 90s and beyond? At the very least, give us the flexibility to avoid having to open our plans when the markets are seriously down, as they were in 2008 (an inequity CARP took a leadership role in fighting at the time).

Do these sound like the concerns of people who are about to lay down to gorge at the public trough? Frankly, I’ve grown tired of the casual, unthinking, melodramatic Tsunami blame game and I invite you to tire along with me.

I’m tired of headlines that read “Sponging Boomers”2 or sum up the situation as “The struggle to digest the swollen generation of aging baby boomers” and warn that “a showdown between generations may be inevitable.”

The dates of our births are not our fault, and it’s wrong to reduce the grand march of the generations to a crude struggle over resources. We stand for active aging and solidarity between generations; but we are who we are, we’re not going anywhere and we’re not going to apologize for being here! It’s time to pull the plug on the Grey Tsunami.

Moses’ Zoomer Philosophy — which launched in ZOOMER Magazine in October 2009 — is a series of monthly essays on age and aging, and the secrets and the science to living better, longer, healthier and happier lives. The first volume of his collection is now available in e-book format on the Kobo Books website.  Click here for more information.