Introduction
I am getting ready to head back in to Toronto’s Libraries, online forums and Church basements to talk about retirement on a low income in Canada.
A majority of the people in the audiences I address are able to apply for benefits, understand their income tax returns and comprehend the basic rules that govern Old Age Pensions and other programs.
They have sufficient critical thinking skills.
But I am finding that a growing minority of attendees are unable to engage the decisions they need to make and they are having more and more trouble navigating application processes and our income tax system. This minority often does not possess critical thinking skills and may lack numerical ability.
They live in a world of numerators with few if any denominators. They do not understand base rates and suffer from what Daniel Kahneman called ‘denominator neglect’.
They live in a world of numerisolation (a new word I just made up).
I know this because they ask questions that routinely conflate different aspects of the system. How does one answer questions like: “Would I be better off with a GIC or a TFSA?” or “If I put all my money in a RRIF before age 71, can I avoid the clawbacks on GIS as well as pay lower taxes after I turn age 71?”
Some within this minority cannot take a monthly benefit and convert it to a yearly amount even when they have access to a calculator. Others cannot distinguish a withholding tax from an income tax no matter how carefully or simply explained.
For this minority, various discrete elements of our tax and transfer system have simply exploded into a kaleidoscopic map – many large and small shards all over the place – with little structure. Think of it as a number of jigsaw puzzle pieces from different puzzles thrown into a bag and then emptied on a table.
It’s becoming my job if I am to assist some people not only to separate out the pieces to complete the puzzles but to first discover and explain which pieces belong to which puzzle.
The first three rungs of the ladder
I have started to think of this morass of ‘stuff’ in terms of climbing a ladder. The first three rungs of the ladder are crucial.
Climbing the first rung of the ladder is the achievement of some understanding of the simple existence of various elements of the system: benefit programs, income tax, savings vehicles, application processes and levels of government etc.
The second rung is the achievement (another step up) to having a rudimentary understanding of what each element actually does or how they work.
The third rung is the step up to understanding how the various elements interrelate and their place – how each impinges on the others.
For the majority who understand the basic structure of Canada’s retirement system and can navigate the massive systems of support available to help them, I refer to them as the people who understand how to climb the first three rungs of the ladder.
The minority who don’t understand the basics, I refer to them as those who need help with the first three rungs of the ladder.
Our system of advice starts at the fourth rung of the ladder
In my opinion, the biggest problem in low income retirement planning in Canada is that governments, helping agencies, planners, experts, writers, journalists and others all tend to start their advice-giving at the fourth rung of the ladder.
For example, I have never seen anything written that inventories all the stops on the journey to low income retirement: banks, benefits, income taxation, refundable credits, deductions, non-refundable credits, application forms, savings vehicles, penalties, eligibility requirements, choices to be made, entitlements etc. and sets them out describing the tableau, the gestalt that real people inhabit.
I have never seen anything written that takes all the elements and fits them into a structure and simply says what they are and how they differ one from another.
And I have never seen anything written that describes how all of these elements relate one to another in a way that prepares someone for the experience of navigation.
The vast majority of written material starts with an element or several elements in the system and then helps you through those elements on the assumption that you have some clue as to what you are doing. They most often assume that you know basic concepts of place, how to add and subtract, that you understand percentages and fractions, and you have some idea of how the overall system works.
In other words, most advice tends to assume the capacity for something we all now call ‘basic financial literacy’ which to me, starts at the fourth rung of the ladder. The assumption appears to be that all of us know what the basics are, have some vague idea of how they work and perhaps some understanding of how they relate. Now we just need to be guided through a process to understand our own personal situations and to develop good habits and financial hygiene to maximize the benefits that are part of our financial lives.
The main reason we miss the first three rungs of the ladder is that the ecosystem that prepares financial literacy materials is financially literate in its own right.
It is capable of critical thinking. That ecosystem is populated by people who understand the system and prepare materials that would be useful to themselves based on an understanding of the first three rungs of the ladder.
The person who draws the diagrams that show us how to assemble IKEA furniture knows how all the pieces fit together. (I don’t).
Financial literacy experts know how to fit the pieces of the low income retirement system together. They often assume, it seems, that they just need to show other people how to do it on the assumption that readers and listeners have or can develop some of the skills needed and be able to bring them to the table (so to speak).
I am talking in this essay about the minority who can’t don’t or won’t.
Why critical thinking is suffering a setback
My topic in this piece is presenting to audiences on low income retirement in Canada.
I began by attempting to think through the problems that appear to disallow the effectiveness of financial literacy interventions (including my own) for low income retirees.
And every so often, I will be thinking about a topic like that and just as I am ready to put fingers to keyboard, a piece will be published that beautifully amplifies what I want to say.
In this case, a journalist based in the UK, Mary Harrington wrote an Opinion piece in the New York Times that hit a high mark for me. Her short Guest Essay is called Thinking Is Becoming a Luxury Good and was published on July 28, 2025.
Very much in the genre of the many critiques of Meritocracy where costly elite education for the very few who become very wealthy leaders bears responsibility for massive economic gaps between rich and poor, Harrington deftly extends her analysis to include the capacity for critical thinking and basic literacy as entrenching and worsening modern economic divisions.
She asserts that the divide further widens when social media and short videos on smartphones become the educational tools responsible for the thought patterns of most of us.
The chosen few learn critical thinking through deep reading which she calls long form literacy.
And if the divide between critical thinkers and ordinary folks was not wide enough, she also notes that the same divide between rich and poor, thinkers and non-thinkers, the literate and the non-literate also extends to nutrition problems caused by the ultra-processed foods consumed more by those with lower incomes.
Curiously, Harrington does not talk about financial, program, or policy literacy but I think her words are eminently adaptable to problems I am seeing with low income ‘numerisolated’ retirees and near seniors who do not have the capacity to climb the first three rungs 0f the ladder.
I want to quote her extensively as she has real insight into some of the people I see:
“According to a recent report, adult literacy scores leveled off and began to decline across a majority of O.E.C.D. countries in the past decade, with some of the sharpest declines visible among the poorest.”
“Nearly half of Americans read zero books in 2023.”
“The idea that technology is altering our capacity not just to concentrate but also to read and to reason is catching on. The conversation no one is ready for, though, is how this may be creating yet another form of inequality.”
“Social media platforms are designed to be addictive, and the sheer volume of material incentivizes intense cognitive “bites” of discourse calibrated for maximum compulsiveness over nuance or thoughtful reasoning. The resulting patterns of content consumption form us neurologically for skimming, pattern recognition and distracted hopping from text to text.”
“…. literacy and poverty have long been correlated.”
“Bluntly: Making healthy cognitive choices is hard. In a culture saturated with more accessible and engrossing forms of entertainment, long-form literacy may soon become the domain of elite subcultures.”
I have gone on this long tangent because, as I begin a new season of presenting on low income retirement, I know that the cellphones will be out, the attention deficits will be in plain view and that many will be having difficulty with what I once believed to be simple ideas; elements of the system they just can’t describe or integrate with other things.
At the end of these sessions, I normally have lineups of people who want to ask a question. Nine times out of ten, I answer by picking up my booklet and turning it to a certain page, show it to them and then read it aloud to them. It does not work to refer them to the booklet nor does it work to show them the page. I have to read it aloud for the answer to work for them.
This becomes perhaps a snippet of long form financial literacy.
Like Harrington says: Making healthy cognitive choices is hard.