Old-age pension is income the government gives to people that have retired from active employment. It is also called retirement pension. Currently, individuals qualify for the full retirement benefits at the age of 66. One can also opt for early retirement at the age of 62 but will have to receive partial benefits. There is also an option of waiting till one is 70 years to start receiving the retirement benefits (Patterson and Patterson 34; Thornton and Fleming 56).
The older a person is when starting to receive the benefits, the higher the benefits for that individual. Another important element to consider is a person’s earnings over the active years. This factor determines the number of benefits one is to receive at retirement.
How sustainable is the old age pension in old age considering the factors that determine an individual’s amount of benefits?
Thesis Statement
Old Age Pension Scheme should have a standard base in which the elderly receive equal benefits. There are various factors that determine old age pension and benefits in both United States (U.S) and Canada. These factors include the amount one pays into the scheme, the number of years one has lived in either country, the period one begins to receive the benefits and the relation one has to an eligible person. The person to be covered must have worked and resided in either country for at least 40 years after the age of 18. Looking at these factors, one could conclude that the pension might be unsustainable considering the rapid changes in the cost of living.
Increase in the cost of living
The time one has lived in the country
Canadian and American governments consider the period one has lived within either of the two countries from the age of 18 to determine the old age benefits (Davis and Lastra 36). This consideration is related to the number of months one will have paid into the pension scheme. The longer one has lived, the more one will have contributed. This consideration though is not standard since an individual might live far fewer years but still contribute more based of their level of income. The two governments need to reconsider this aspect when determining the benefits to give retirees.
Incapacitation
In case a person is incapacitated at a young age, he or she might be unable to pay the monthly contributions (Daniel 23). Such an individual may, therefore, fail to receive adequate financial support at the moment of he or she is incapacitated and at old age. The pension scheme stakeholders need to consider this aspect.
This research will, thus mainly focus on this factors to determine the viability and effectiveness of the pension scheme.
Works Cited
Daniel, Militaru Nicolae. "Analysis of the Correlation between Social Protection Expenditure and Old Age Security Pension." Impact of Socio-economic and Technological Transformations at National, European and International Level (ISETT) 6 (2015).
Davis, E. Philip, and Rosa M. Lastra. "Pension Provision, Care and Dignity in Old Age: Legal and Economic Issues." Davis EP and Lastra R (2016)," Pension Provision, Care and Dignity in Old Age: Legal and Economic Issues", Brunel Economics and Finance Working Paper 16-06 (2016).
Paludi, Michele A. Managing Diversity in Today's Workplace: Strategies for Employees and Employers. Santa Barbara, California, 2012. Print.
Patterson, James T, and James T. Patterson. America's Struggle against Poverty in the Twentieth Century. Cambridge, Mass: Harvard University Press, 2000. Print
Thornton, Paul, and Donald Fleming. Good Governance for Pension Schemes. Cambridge: Cambridge University Press, 2011. Print.
