# Cpp



## couchman (Oct 10, 2013)

When the govt made changes to when you could access your old age pension . What does that affect? I am currently 50 years old. There is cpp, old age security and guarentee income supplement. What do you have access to and at what age.


----------



## gibor365 (Apr 1, 2011)

couchman said:


> When the govt made changes to when you could access your old age pension . What does that affect? I am currently 50 years old. There is cpp, old age security and guarentee income supplement. What do you have access to and at what age.


I thing they changed only OAS - to 67, CPP you can get from 60


----------



## HaroldCrump (Jun 10, 2009)

gibor said:


> I thing they changed only OAS - to 67, CPP you can get from 60


Yes, but they recently increased the penalty for taking "early" CPP i.e. before 65, and increased the payouts for taking late CPP.


----------



## gibor365 (Apr 1, 2011)

HaroldCrump said:


> Yes, but they recently increased the penalty for taking "early" CPP i.e. before 65, and increased the payouts for taking late CPP.


What can i say?! Bustards!


----------



## RBull (Jan 20, 2013)

20 second search gives you the answers. 

http://www.servicecanada.gc.ca/eng/services/pensions/cpp/payments/


http://www.servicecanada.gc.ca/eng/services/pensions/oas/pension/index.shtml


----------



## Itchy54 (Feb 12, 2012)

There is a good thread in the retirement section regarding CPP


----------



## gibor365 (Apr 1, 2011)

To tell the truth, I don't count on CPP/OAS income at all.... In order to get full CPP/OAS , you should work from age 15 or 16 and max CPP deductions.... I arrived to Ccanada in mid 30's and even though I paid CPP up to max, even before this "reform" my estimate CPP/OAS was practically nothing... I expect another couple of similar reform until I reach retirement age, thus CPP/OAS money will be enough only to buy couple of vodkas per month 
If I was counting on retirement , I would just move back to Israel at age 65


----------



## Ihatetaxes (May 5, 2010)

Gibor CPP/OAS will be there for you. I think I am a bit younger than you and I have zero doubt they will be around although I bet the claw back numbers for OAS will drop and I won't ever see a dime but I bet CPP will flourish and be there for us all.


----------



## Guban (Jul 5, 2011)

A couple of vodkas a month? gibor's taste in vodka sounds very expensive!


----------



## gibor365 (Apr 1, 2011)

Guban said:


> A couple of vodkas a month? gibor's taste in vodka sounds very expensive!


It is , as far as we have LCBO monopoly! Just before CPP "reform" as per Service Canada website , If I continue to contribute until age 65, CPP I get will be around $400, after reform it will be less, if I get laid off or retire earlier - CPP will be much less...considering that 1 bottle of Grey Goose cost about $110 -> it will be exactly 2 bottles of vodka


----------



## cwrea (Jul 2, 2009)

gibor said:


> To tell the truth, I don't count on CPP/OAS income at all.... In order to get full CPP/OAS , you should work from age 15 or 16 and max CPP deductions.... I arrived to Ccanada in mid 30's and even though I paid CPP up to max, even before this "reform" my estimate CPP/OAS was practically nothing... I expect another couple of similar reform until I reach retirement age, thus CPP/OAS money will be enough only to buy couple of vodkas per month
> If I was counting on retirement , I would just move back to Israel at age 65


Some untruth there.

1. OAS is residence-based, not earnings-based. i.e. your OAS benefit has nothing to do with how long you work. Simply: 40 years of residence in Canada gets you the maximum OAS benefit. Any less than 40 and you get a pro-rated benefit, provided you meet the minimum residence requirement. If you came to Canada in your 30s (say, 35) and apply for OAS at 65, that would be 30/40 or 75% of the maximum benefit.

2. To earn a maximum CPP benefit, contributions on your earnings need to be at the maximum level (YMPE) for ~40 of the 47 years from age 18 to age 65. That's because 7 of the worst 47 years (assuming you retire at 65) are dropped by the calculation. i.e. you can score 85% on the maximum-years test and still get awarded 100%. You can request a statement of contributions from Service Canada, online. (Sadly, their tools aren't very easy to use.)

3. Re: _"I don't count on"_. Kind of the right approach, but I wouldn't discount the programs entirely, either. Consider: The maximum CPP benefit replaces, by design, only 25% of earnings, and only up to the YMPE. In other words, the government only intended CPP to provide a portion of retirement income and consequently expects Canadians to save more money on their own. I think the best approach is for folks to learn how the programs work so they can factor reasonable estimates into their retirement plan, rather than assuming too-optimistic or too-pessimistic outcomes.

I suggest you (and others) check out the ""I'm a CPP expert. Any questions?" thread that was just bumped by another member. FWIW, the same OP of that thread also wrote a series of articles at Jim Yih's Retire Happy blog that are quite informative. Those are also easy to find.

All the best.

Regards,

Chris W. Rea


----------



## OhGreatGuru (May 24, 2009)

gibor said:


> What can i say?! Bustards!


Regarding the changes to CPP, for once Harper's government made a decision on facts, not ideology or manufactured data. The provisions for taking either early CPP or late CPP are supposed to be actuarially neutral. The cost of the 2 is supposed to balance out so the net long-term effect (to the Plan) is the same as if everyone took CPP at 65. But due to changing demographics and longevity, those taking CPP early were getting a better long-term benefit than those who took it late. So the penalties/bonuses for taking CPP at an earlier or later age were adjusted accordingly. 

As for delaying OAS to 67, I think this was the result of another "manufactured crisis" in long-term funding. And the PBO agreed that there is no crisis of the order Harper's government was predicting. Whereas the practical consequences to individuals of changing the eligibility age by 2 years is very significant.


----------



## gibor365 (Apr 1, 2011)

I said I'm not counting on CPP/OAS for ONLY my situation...
OK, my OAS should be about $400 , but already at age 67 , looking at the trend, it's very possible that age from 67 can be bumped to 70 or or amounts could be reduced.
CPP. as per servicecanada website, "If you apply at the age of 60, you could receive a monthly retirement pension of: $291.45". I asked you some time ago on another CPP thread, and you said that those amounts in case I have same income until I retire. I'm planning to retire at 55 or earlier (depends on many factors), thus I assume that I can receive "a monthly retirement pension" around $100 - 120?! 

P.S. I'm wondering what % of retirees get max CPP?! I think 0%


----------



## sags (May 15, 2010)

gibor said:


> I said I'm not counting on CPP/OAS for ONLY my situation...
> OK, my OAS should be about $400 , but already at age 67 , looking at the trend, it's very possible that age from 67 can be bumped to 70 or or amounts could be reduced.
> CPP. as per servicecanada website, "If you apply at the age of 60, you could receive a monthly retirement pension of: $291.45". I asked you some time ago on another CPP thread, and you said that those amounts in case I have same income until I retire. I'm planning to retire at 55 or earlier (depends on many factors), thus I assume that I can receive "a monthly retirement pension" around $100 - 120?!
> 
> P.S. I'm wondering what % of retirees get max CPP?! I think 0%


The average CPP benefit is less than $500 a month, I believe.

My spouse and I both qualified for full CPP.........but I started working full time at age 15 and paying into the CPP since it first started. My wife started at age 19.......and we both paid in the maximum contributions for the maximum years.

We both took early CPP..........as most people do, and you are right..........few people will ever receive the maximum.

As a result..........I question the actuarial assessments.

The CPPIB recently reported a $16 Billion dollar (16.5%) return on the fund investments for 2013. They have exceeded their benchmark 4% return rate for the last 10 years. with a return of (5.1%) despite the recession losses. 

The fund now has almost $220 Billion dollars in it. They are considering divesting an oil company they invested $300 million into........for a sale of $1 Billion...........so another $700 million will go into the fund. Given the size of the CPP fund, they are in a unique position to buy anything they want without incurring any debt, and the money just flows back into the fund. 

It is my belief, that the changes to the CPP weren't necessary and the actuarial projections are just plain wrong.

The CPP probably "should" be paying out higher benefits, given how well the fund has performed.

It doesn't make much sense...........that the fund returned much better than expected returns..........so benefits have to be cut.

I believe the CPPIB is too conservative on their actuarial computations, and people are not receiving the benefits they should as a result.


----------



## gibor365 (Apr 1, 2011)

_My spouse and I both qualified for full CPP.........but I started working full time at age 15 and paying into the CPP since it first started. My wife started at age 19.......and we both paid in the maximum contributions for the maximum years.

We both took early CPP..........as most people do, and you are right..........few people will ever receive the maximum._ 

Congrats! Not many people like you!

_It doesn't make much sense...........that the fund returned much better than expected returns..........so benefits have to be cut_ In majority of government decisions it's nor easy to find sense  Can you imagine if this fund performs really bad?!


----------



## sags (May 15, 2010)

gibor said:


> _My spouse and I both qualified for full CPP.........but I started working full time at age 15 and paying into the CPP since it first started. My wife started at age 19.......and we both paid in the maximum contributions for the maximum years.
> 
> We both took early CPP..........as most people do, and you are right..........few people will ever receive the maximum._
> 
> ...


Not good planning..........just plain "dumb luck". 

Right time to be born and start working........is all........but I would trade it to start all over again...........LOL........

Like my dad told me years ago, when I was complaining about having to work and was looking forward to retiring. 

"Just remember..........when you retire, you don't have to work........but you also will be old."


----------



## Itchy54 (Feb 12, 2012)

I like you Dad's quote sags!

http://www.servicecanada.gc.ca/cgi-bin/search/eforms/index.cgi?app=prfl&frm=isp1003&ln=eng

I filled this form out a few years ago and got my numbers for cpp , mostly part time work ( so I could be there for the kid)and home with kid...hubby still thinks moms should get full monetary allotment for "time served" rather than a dropout of those years, I kind of agree with that...the kid turned out well though so I have nothing to complain about.


----------



## OhGreatGuru (May 24, 2009)

sags said:


> ....I question the actuarial assessments.
> 
> The CPPIB recently reported a $16 Billion dollar (16.5%) return on the fund investments for 2013. They have exceeded their benchmark 4% return rate for the last 10 years. with a return of (5.1%) despite the recession losses.
> ...
> ...


The mind boggles. One great year in the markets and you are ready to spend all the money! Do you really think it is going to keep earning at that rate for 75 years? Try reading the actuarial reports.

And by the way, the target 4% return is "real rate of return" after inflation.


----------



## Daniel A. (Mar 20, 2011)

gibor said:


> To tell the truth, I don't count on CPP/OAS income at all.... In order to get full CPP/OAS , you should work from age 15 or 16 and max CPP deductions.... I arrived to Ccanada in mid 30's and even though I paid CPP up to max, even before this "reform" my estimate CPP/OAS was practically nothing... I expect another couple of similar reform until I reach retirement age, thus CPP/OAS money will be enough only to buy couple of vodkas per month
> If I was counting on retirement , I would just move back to Israel at age 65


Please tell us how good things would be in Israel for a retired person. Is it better ?

Both my wife and I will have the maximum from CPP but we have both worked since the early seventies contributing, two thousand a month in pension sounds good to me plus 550.00 each for OAS. 
If we moved to Israel is that government going to give us 3000.00 a month ?


----------



## RBull (Jan 20, 2013)

sags said:


> The average CPP benefit is less than $500 a month, I believe.
> 
> My spouse and I both qualified for full CPP.........but I started working full time at age 15 and paying into the CPP since it first started. My wife started at age 19.......and we both paid in the maximum contributions for the maximum years.
> 
> ...


This all may have merit however in your argument you have not considered a very important factor - longevity of people has changed dramatically and continues to evolve with people living longer.


----------



## sags (May 15, 2010)

OhGreatGuru said:


> The mind boggles. One great year in the markets and you are ready to spend all the money! Do you really think it is going to keep earning at that rate for 75 years? Try reading the actuarial reports.
> 
> And by the way, the target 4% return is "real rate of return" after inflation.


The CPP has received great returns for a lot longer than one year. From stock markets alone, the CPP should have received a great deal of wealth. Their private investments have done very well.

As the fund grows larger and larger, they say they have a more difficult challenge to find appropriate investments, but the enormous size of the fund allows them to make investments that average investors can only dream about. They are now travelling in a world well beyond Warren Buffet's Berkshire Hathaway's enormous portfolio and ability to make very profitable investments. 

If people don't believe the stock market will earn 4% or above annual returns..........why would they invest in it themselves? They might as well buy GICs, because they wouldn't be getting paid for the risk of capital losses.

Why is it that so many people assume "they" will make decent returns from the stock market themselves.......but the CPPIB would struggle to do the same ?

I don't know what the actuarial assumptions are on longevity........do they assume everyone will collect full benefits at age 65?.........what % of the population do they assume will die before collecting anything from the CPP ? If the CPP were wound up today......how much would each person receive from the fund ?

I haven't seen any of those assumptions posted anywhere.......but I think they would be interesting to consider.

The only information usually carried in the media is.........the size of the fund, the latest annual returns, and that is fully funded for *75 years and beyond*. 

One question I wonder.........is how many more years does "beyond" mean.

Maybe the CPPIB is running tight.........but, that isn't what their public statements would indicate.


----------



## gibor365 (Apr 1, 2011)

Daniel A. said:


> Please tell us how good things would be in Israel for a retired person. Is it better ?
> 
> Both my wife and I will have the maximum from CPP but we have both worked since the early seventies contributing, two thousand a month in pension sounds good to me plus 550.00 each for OAS.
> If we moved to Israel is that government going to give us 3000.00 a month ?


By move ....what do you mean ? "returned citizen" or "new immigrant"? Cannot tell about amount, but there is 10 years tax exemption from any income from outside of Israel.... you will continue to get CPP/OAS and can receive Israeli pension...


----------



## RBull (Jan 20, 2013)

sags said:


> The CPP has received great returns for a lot longer than one year. From stock markets alone, the CPP should have received a great deal of wealth. Their private investments have done very well.
> 
> As the fund grows larger and larger, they say they have a more difficult challenge to find appropriate investments, but the enormous size of the fund allows them to make investments that average investors can only dream about. They are now travelling in a world well beyond Warren Buffet's Berkshire Hathaway's enormous portfolio and ability to make very profitable investments.
> 
> ...


My guess is "beyond" isn't anything significant or they would have stated it. In any case projections for that long a period aren't significant in that they can't possibly be accurate. There are way too many factors to consider. What would be important is to see trending over time to assess strength.

These are latest life expectancy charts I found from stats Canada which I am sure would be valid for Canadian workers across the country. They aren't the most current but you get the idea. I don't know when the assumptions are for starting CPP fully but that probably isn't important unless you don't trust them. It's a simple answer to your question of why benefits would change. 

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/health26-eng.htm



> I'm not sure why you're suggesting this.
> Why is it that so many people assume "they" will make decent returns from the stock market themselves.......but the CPPIB would struggle to do the same ?


CPPIB has done a good job that most personal investors would be envious of. I don't know of anyone who actually knows something about the fund that doesn't think this.


----------



## Daniel A. (Mar 20, 2011)

gibor said:


> By move ....what do you mean ? "returned citizen" or "new immigrant"? Cannot tell about amount, but there is 10 years tax exemption from any income from outside of Israel.... you will continue to get CPP/OAS and can receive Israeli pension...


So how much would I get given that I contributed nothing.


----------



## Daniel A. (Mar 20, 2011)

I guess the problem I have with this thread is that the rules around CPP are fairly clear.

CPP is based on 45 years of work and we can drop the seven lowest years which now becomes eight years this year I believe.
Most people it seems take CPP as soon as they are able based on the average payout.
I've chosen to wait as I am in good health and have a couple of parttime jobs that more than make up the difference plus at some point I may decide not to work at all.

I can only guess my health based on my annual physical but at the moment it looks good so given that I only work because I want to and have all the flexibility I want I have no reason to apply.

The moment one takes CPP it is set in stone no turning back and I'm not willing to give up the 300.00 a month as it may be important to me later in life. 

I do have a DB pension that I'm grateful for.

I think delaying my CPP for the benefit of 300.00 a month is the smart move but only for myself.


----------



## My Own Advisor (Sep 24, 2012)

I think you're smart Daniel, not to take CCP, and defer it, until you need the income.


----------



## LBCfan (Jan 13, 2011)

sags said:


> It is my belief, that the changes to the CPP weren't necessary and the actuarial projections are just plain wrong.


I'm sure that as a trained actuary or simply a mathematician, you can tell us why. How about it?


----------

