Happy Canada Day

Canada, as we know it, is 148 years old today.  Someday maybe people will live that long.  Would that matter?  Likely.

Suppose it happened to someone born 1 July 1867.  They would have lived a full life and retired at 65 in 1932.  Butter, bread, milk and rent were all cheap by today’s standard.  It cost a penny to mail a letter.  We don’t use pennies any more.  Someone told me you could get a pound of butter, a loaf of bread, a dozen eggs, a quart of milk and a chocolate bar for less than a quarter.  You can’t now, but that could be because of the security cameras.

Whatever the case, it is not possible that a person could have set aside enough money to make it work.  They could not have guessed what is happening now.

You cannot precisely plan for an unknowable.

Pensions would not have saved anyone because there were few, if any, of them.  My grandfather retired in 1957 and his pension plan was just six years old at the time.  Tiny money.

The world today is so different from 1932 that it would be near impossible to compare.  It gradually changed over time but the effect of the changes would have been impossible to know.  For practical thinking purposes, it is easier to see the period as discontinuous.

Technology has changed immensely. Medicine and drug therapies are like magic by comparison.  I suppose it would be possible to explain cell phones and computers to someone from 1932, but I am not so sure the internet and its effects would be clear.  I am not sure the implications and possibilities are clear to people today.

It is more than technology, though.  Society is different.  The equality of the sexes would have been hard to foresee from 1932.  The corruption of politics, regulation of trivia, the welfare society, the idea of equality of result, racial relations, the tolerance of foreigners and more would have been harder to see than the advances in medicine.

I think I would have a better chance of explaining lasers to our friend from 1932 than I would same-sex marriage.

What will happen from here?  You might live well beyond your best before date.  A couple aged 65 can expect that one will live past 90.   Have you fully anticipated the possibility of living, and of living in a totally different kind of world?

We make a mistake when we think that the future will be like the past only with different colored cars.  It could be fundamentally different from the past, or even the future we can estimate.

Every retirement and estate plan requires a margin for error.  Assets that you may never need but should circumstances change, then you have a resource to call upon.  Preparation for the unknown is harder than people think.

Survey, anticipate, plan, create flexibility, and act.

Contact: don@moneyfyi.com  

Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

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