which will net you the most money over your lifetime then post some more information and people will be able to give better informed answers. The max pension for 2012 would be $986.67, and if all 27 of your years of contribution were at YMPE, that would only give you a pension of approx $859.36 if we pretended that you were 65 now ($986.67 / (84% of 37 years) x 27 years). These benefits for the children would continue after your death, plus your spouse would become eligible for a survivor’s pension. And can I keep working part time? These calculations don’t take into consideration the tax consequences. However, OAS should offset the difference. I will not get the full CPP or OAS as I have not lived in Canada for the length of time to collect them. To me the best idea is to maximize my monthly income. Your wording is suspect. If you want me to do this calculation for you (for a $30 fee), email me at [email protected]. Sorry . Also with a TFSA you can withdraw if you need funds. With all due respect, the CPP is not a scam. No. People Counting System Market Will Surpass USD 2,278 Million By 2026 Growing At 18.2% CAGR | North America Region Market Valuation of USD 325.1 Million In 2018 And Expected to Register A CAGR of 17.0% 15 years 2 months, just to get your contributions back. Please advise me. Hi, I’ve been trying to figure out if it is best for my husband to claim his Canada pension at 60 or 65. GROise I am turning 60 next year would it make even more sense to take CPP early based on the clawback or is this a non issue? My husband has been retired from General Motors since October, 2007. But I haven’t seen anything yet that says if I take CPP early I will get less govt pension (or RPP). Also I have more than 418 M months of usable contributions so starting at 60 would have not used the full value of my entitlement. His income is in the $60.000 range. I am not certain whether I should take my CPP early… reading a lot about leaving money on the table if I don’t take it at 60 but don’t wait until I’m 65. At that point, you could be eligible for a disability pension (which is more that a retirement pension) plus a monthly benefit of approx. In my case, I will be taking quite a huge tax hit from the package I got, putting most of it at about a 42% tax rate. Une bonne sodomie pour la jolie et gourmande Taissia Shanti 18/05/2020. Bottom line for this financial planner only those with excellent track records and/or good pension plans should take CPP early. Hi Anthony – CPP benefits aren’t affected by where you live. I wrote a couple of articles on this subject, which you can find at: https://retirehappy.ca/cpp-survivor-benefits/ and at: https://retirehappy.ca/a-case-study-on-cpp-combined-benefits/, This is a very complex issue though, and if you want me to do some calculations for you (for a fee), email me at [email protected]. I am eligible to receive CPP but am going to continue to work part time . CPP benefits are payable anywhere in the world, so absences from Canada don’t matter at all. Ray The general dropout is not a flat 8 years. Hi Jim, I will be 65 in Feb 2015. I have a company pension that will supplement after 70. I am 60 and have started collecting allowance for the spouse. If you want accurate CPP estimates, I can do that for you (for a fee), if you email me at [email protected]. when does the PRB kick in for the contributions made from 65 on. As far as tax withhold, that depends on what other sources of income he might have and what tax bracket he would be in. or is that too simple a calculation. The CPP offset that stops at 65 is calculated on your years of service in the particular pension plan whereas your age 65 CPP entitlement is based on your CPP contributions from age 18 to 65. this leads me to another question what month is best to retire ? Not exactly what I had hoped to hear but at list I can put my mind at rest, continue to pay CPP and wait for the June 2109 retirement date to basket – at last – my hard earned benefits on CPP shores of joy (The 2014 Max CPP being 1038.33). Here is a weblink that allows you to apply online: All the best Jack. If you work after 60 does the amount you get increase at 60’or 65 after taxes in the pocket money. I would want something on the east coast though. How does it make sense to take CPP early if the breakeven point is 77? The question is – should I contribute to CPP or should I just start CPP early? I am not collecting early CPP yet. Just wondering if I should collect my CPP early or not, Hi Terry – You should make that decision based on these factors: http://www.drpensions.ca/when-to-take-your-cpp.html. There’s insufficient information here to determine the answer. Don, Considering over the next 5 years living off half of my RRSP savings ….starting next month when I retire at 60. Now in saying this: I do not proclaim to know a lot on this subject. Thanks for a very informative column. I have no private pension plan other than a small RRSP through my union – not enough to make any sort of difference. If you contribute the maximum, based on 2014 rates. Thank you Do the benefits of taking the integration or bridge outweigh the benefits of having a higher income later in life? Do these charts still apply? At age 60, that means your best 34 years and 10 months count (out of the 42 years from age 18 to age 60) whereas at age 63 your best 37 years and 4 months would count. Even though I contributed the maximum for 40 of the 43 years that I worked (18-60) before becoming disabled I am not collecting the maximum. How it is calculated is: your monthly CPP x 12 months / 52 weeks = weekly amount deducted as if it were employment earnings. If he denounced his citizenship and plan to move to a third country permanently for his personal reason. I can understand your confusion, because the CPP rules around contributing after you start your CPP retirement pension changed effective 2012. And one more thing, if its okay that my spouse will be the witness. I am a government employee with a pension. Last Dec., on a lark, I applied for any CPP that might be mine and am now receiving a whopping $25. I had heard many times over the years that it is better to take the CPP at age 60, so that is what I had planned on doing. Usually they get an embarrassed look on their face (oil stocks anyone) or they have no idea. Hi Doug, She will never work in Canada again. Hi Doug again! 8% is over 90 years of age. We have 2 situations in our home Great charts. Why is the math different? I am a Canadian and worked 19 years there with max annual CPP payments. As mentioned above, this maximum GIS is reduced by approx. $321x12x20=$77,040 (Beth) would receive less than $502x12x15=$90,360 (Janet) Why wouldn’t I continue to let the Govt bridge my pay until 65,, thus increasing my CPP at 65? My response concerns only your CPP calculation, and whether you remember completing form for the “Child Rearing Dropout” or CRDO provision. Thank you. Thank you Doug. It’s not calculated just on the credits I already have? Shouldn’t the breakeven age increase for taking CPP early as you go through the charts for 2013 to 2016? Remember this is your money and your decision. The definition of disability for CPP purposes is that your condition must make you “incapable regularly of pursuing any substantially gainful employment”. Thanks for your assistance. Don’t forget though, that the PRB that I’ve quoted of approx $25/mth is for max contributions if you’re age 65. If you retire early and do not think you can live off your pension here are a few things to think about. I am a CPP expert, and I know that CPP is not affected by you receiving EI benefits. End of story. Do you have a recommendation for someone in Toronto that know the international tax law? And then the Prov ODS or BC PWD will pay you top dollar per monthly with no deductions to take away from you. If I feel the need I will definitely contact you for a more precise calculation. I believe this changes if you are putting your CPP into RRSP’s if you are still working. Life is short, and it seems nobody knows when and if their time will come. Assuming both live upto age 80: behalf of myself. If you’re talking about CPP, it has never been payable any earlier than age 60 unless you’re disabled. If so, how long do they need to go back into Canada and stay, before they leave again? If you apply for your CPP at age 60, the actual calculation will be based on your average earnings for your best 35 years (83% of your 42 year contributory period), and if you apply for your CPP at age 65, the actual calculation will be based on your average earnings for your best 39 years (83% of your 47 year contributory period). Robert Thank you. At the end of this year I would have been paying into it for 39 years. I suggest delaying OAS to 70 and reducing your RRSP’s to live on and make max contributions to TFSA From your RRSP at 65 you can create a small pension to get the pension tax credit. Janet start CPP at age 65 – get $502 per month I’m not an EI expert, but I’m sure that you can qualify for EI even though you’re receiving CPP, as long as you’re still looking for work. The moment they start their own pension, the survivor’s pension is generally cut by at least 40% (up to 100%). I am a Canadian citizen and have contributes to CPP for six years, and paid Canadian taxes as non-resident Canadian for another 4 years. My wife is supporting and it is getting harder. 4. and will you be any better in the old folks home than the guy next to you that pissed all his money away. Should I find my card board box now to live in . I think this is what happened. When I called CPP they actually said payment would be shortly after applying… confusing? I believe too many people start their CPP early and will live to regret it. Just be aware of the consequences of taking early CPP with a pension linked to CPP through a bridge. The amount of a disability pension is always more than a retirement pension and it can begin at any age, whereas a retirement pension is payable no earlier than age 60. I am only 58 years old and completed my ten years contributions on my CPP. Start rebuilding your TFSA with RRIF income. Does one need to keep resident status in order to collect? This starts to make the calculation fairly complex. The Canadian benefits system does not require loads of money at the back end to survive like the US system. I’ve taken advantage of looking at some of Dougs articles and charts and at this point am thinking of not taking CPP at 60, but rather waiting. I suggest that you call Service Canada at 1-800-277-9914 and ask them to send you a copy of your CPP statement of contributions (SOC). I stopped working in 2008. Thank you. Of course there’s a breakeven point to that decision! The amount of your CPP benefit that is greater than $5000 could be placed in a non-TFSA investment vehicle that produces good returns. What is the best way as of today to start my contribution? I mis-typed earlier. When calculating the 17% of years to drop out, what base # of years is used … 18 to 65? By taking your CPP at age 60 you’ve been ahead for these last 5 years, but that means that the reduction in your private pension may be more than your CPP. Great article. The best thing to do is to request a copy of your CPP statement of contributions from Service Canada online at; http://www.servicecanada.gc.ca/eng/online/mysca_credential.shtml or by phone at 1-800-277-9914. I retired this year; I will be 60 next July 2019. The econonmy and the liklihood of job loss arn’t relevant in making the decison whether to start it at 60 or 65. 15.5 years after age 65, Do you know what the make up time would be if CPP was taken at age 60 ( given the new rules of .6% per month)? The breakeven point for Beth is age 74.4. Hi Chuck – Part of one year isn’t going to make a significant difference to either of your CPP benefits, but if you want to know the exact impacts and which option would give you the greatest net benefit, I’d need to do detailed calculations for both of you. The other system projected your last year of earnings until age 65, and did an estimated calculation, but still using 2012 dollar values. The Lifetime Allowance is set by the Treasury and is currently £1,073,100 (2020/21). This makes a difference in the calculation for someone who does not contribute a full 35 years when taking CPP at 60. Then again, each year that you continue to work and contribute after starting your CPP retirement benefit will earn you a post-retirement benefit (PRB). The new rules bring the breakeven point earlier but also gives more people access to early CPP because you no longer have to stop working to get CPP. However, in my case, it makes no sense for me to take CPP in 2015 since ALL of it would be taxed at 42%. Question: My job ends in July 2011 and I will be getting a severance package in 2011 which will meet exceed my income needs during 2011. I have started to receive CPP-D (disability) (age 54) due to MS complications thus having to access CPP earlier than I would have planned. Question is at age 65 CPP disability turns into CPP will I collect the same amount on CPP as I did on CPP disability or will they top it up with OAS. As a single person where every penny counts I regret that I listened to you. I have not applied for my own CPP retirement benefit because it will get clawed back from the Allowance and therefore will not benefit from taking early CPP retirement benefits. Just wanted to say you can get your pension at sixty you lose 30%, you can still work and you pay monthly cpp, and each month your cheque increases. By figuring out where the knee in the curve starts to really go up, I think I’d be better off withdrawing a bit more from the RRSPs as long as the tax rate is still palatable (and put it in a TFSA if I don’t need it) because eventually, I’ll have to wind down the RRSP come RRIF whether I want to or not, and the minimum RRIF withdrawl rates will only leave me with less choices. Thanks but I’m still a bit confused. I stopped working at 63,I have paid the maximum for 39 years. The only reply that I can give you without seeing your entire CPP contributory record is “it depends”. @Jon. I received some amount of the retirement money from my company this year. I am planning on buying back that time to my municipal pension plan. Had we waited for full CPP we would be paying on extra tax on the difference.. Hi Doug. Please enable JavaScript in your browser. Thank you. Hello; what interest rate are you using to get the breakeven years? at age 80. you have collected 164700 15 years of collecting at approx 915 for 15 years. Finally someone that has worked out the fine details of how the CPI impacts the decision. Hi my name is rino fregoli ,i am a canadian citizen living in the U.S ,i paid into CPP, for 10 years before moving to the U.S ,apllied for early retairment at 60 ,last February in Canada ,my DOB 08-26-1950,how much would i get ,and how long will it take to get an answer?Thanks Rino, how long after i have been accepted does it take fo the first cheque to arrive.
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