When viewed on the surface, both the USA and Canada have very similar retirement systems in place. Delve a little deeper, however, and it becomes clear that our northern neighbors have a slight advantage in that department.
In a recent poll of all of the major countries in the world, Canada ranked fifth in retirement planning and assistance while the United States ranked tenth. The U.S. came up short, separated from Canada by Brazil, Poland, the United Kingdom and Chile, while Canada was bested only by countries like Switzerland, Sweden and at the top of the list, the Netherlands. The flat-rate pension plan can be listed as a success, but a side-by-side comparison of similar retirement policies demonstrates why the Canadian people, at least at the moment, have a brighter outlook when it comes to living better as they get older.
The United States has Social Security and Canada has Old Age Security. Old Age Security is pretty straightforward. Once Canadian citizens turn 65 (after having resided in the country for at least 40 years as an adult), they are typically eligible to receive the entirety of a monthly payment of about $530, give or take a few dollars based on certain qualification factors. What's more, retirees earning under $29,904 gain access to Guaranteed Income Supplements and Allowances.
Social Security varies in complexity from Old Age Security when considerations like marital status and outside income come into play. The U.S. Program also provides disability income and takes into account more than simply retirement benefits. The eligibility age is two-tiered as well, in that a person is eligible for part-time benefits at age 62, graduating to full-time at age 67. The system is also credit based, meaning that individuals who qualify must reach a minimum of 40 credits and can earn more by delaying the receipt of their first benefit payments. Since the U.S.'s Social Security funds are expected to run out, Canada's retirement programs are deemed safer.
This extends into the overall quality of life in each nation as well. Since Canadians don't really have the concerns of running out of money post-retirement that the average American pensioner has, they typically experience a less stressful and more enjoyable retirement. It's not uncommon to find retirees in America still holding jobs to supplement their retirement benefits in search of a more comfortable life. This isn't to say that it's all doom and gloom, as both countries rank near the higher end of the United Nation's Human Development Index, a marker of general quality of life and living standards.
As is often the case, the more privatized healthcare system in the United States serves to weigh the country down when it comes to retirement and benefits. All of the basic healthcare services are covered for Canadian citizens and the program is funded by the public, so retirees don't have to stress over caring for their bodies and their general health nearly as much as their American counterparts. Once a person leaves the workforce and the safety of the accompanying health coverage, they can be expected to pay around $350,000 to compensate for Medicare-ineligible, out-of-pocket medical expenses.
With that said, it's more important than ever for people to pay attention to their finances early on to prepare for a longer life and to ensure a safe, secure and happy future in whatever country they call home.
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