Quote:
Originally Posted by lubicon
We are way overdue to push OAS age back to 67 from 65, life expectancy has increased well over two years during this time. The end result is NOT for people to collect it longer, that will bankrupt the system.
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Even if it's true that the life expectancy has gone up by 2 years I think your logic is flawed.
When people live longer if they cannot retire, they work longer. Consequently as life expectancy grows, so does our ability to support a longer OAS period. If life expectancy goes up by 10 years and you push the eligibility age back 10 years, it becomes a cheaper program, all else being equal. It makes sense for the retirement period to grow a bit if life expectancy goes up.
I wonder if life expectancy at birth is even a good way to look at it. See for example:
Source
Imagine a population of 2 groups, and we'll assume OAS kicks in at 65 and the average person begins work at 20...
In 1990:
Group A, 50% of the population, lives to be 80
Group B, 50% of the population, lives to be 40
Life expectancy = 60
Average retirement years = 7.5
Average working years = 32.5
In 2020:
Group A, 50% of the population, lives to be 80
Group B, 50% of the population, lives to be 65
Life expectancy = 72.5
Average retirement years = 7.5
Average working years = 45
People lived longer but OAS affordability went up! This is just one specific scenario but the point is simply that there isn't an ironclad link between people living longer and OAS being harder to fund.