Paternalism vs. Knowledge
According to a recent CBC report, seniors in Ontario make up 30% of bankruptcies. Taking on too much debt is a killer factor in such cases but it does not tell the whole story. Some seniors have simply underestimated the financial needs for their retirement years.
Either way, old age poverty is a reality, which can destroy retirement dreams of hard working people. Furthermore, it comes at a huge cost to current and future taxpayers and may slow down the economy considerably as seniors have less money to spend.
Some argue the government should make sufficient savings for retirement mandatory as a way to tackle this challenge. We believe this paternalistic approach – big father/mother/brother watching – can be an effective way to ensure financial security in retirement. However, a better alternative in our view is empowering current and future retirees with knowledge and resources to make and stand by such decisions on their own.
The financial literacy program is a step in the right direction and one we hope will lay the foundation for our children and youth in being better financial managers.