# I'm a CPP expert. Any questions?



## Dogger1953

I worked for CPP for more than 32 years, and have recently retired. 

I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


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## Daniel A.

Sounds good thanks.

Question I retired at 56 and had maximum contributions for most of my working life so from age 18.
The year I turned 56 was also a full year of contributing. 
Between 57 and 65 I don't have any contributions.

I'm trying to decide when to start CPP.


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## My Own Advisor

Welcome Dogger1953.

Congrats on the retirement - good for you!

I wish I was able to retire, early as well. In my late-30s, got at least another 15 years to go. 

I'm tempted to take CPP early, at 60. Take the money and enjoy it while I can, even with the 30+% reduction.


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## Dogger1953

Daniel A. said:


> Sounds good thanks.
> 
> Question I retired at 56 and had maximum contributions for most of my working life so from age 18.
> The year I turned 56 was also a full year of contributing.
> Between 57 and 65 I don't have any contributions.
> 
> I'm trying to decide when to start CPP.


If I knew your current age, I could give you a better response than just ballparking.


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## Daniel A.

Just turning 59 next month.


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## Dogger1953

Daniel A. said:


> Sounds good thanks.
> 
> Question I retired at 56 and had maximum contributions for most of my working life so from age 18.
> The year I turned 56 was also a full year of contributing.
> Between 57 and 65 I don't have any contributions.
> 
> I'm trying to decide when to start CPP.


Daniel - With your current age being 59, and with 39 yrs of max contributions (age 18 to age 56 inclusive), your choices are fairly simple, even with the evolving legislative changes in the general dropout and in the age adjustment factors. I will give you some approximates here, and if you want exact calculations you could email me at [email protected]. I charge $25 per actual calculations, but I guarantee the accuracy of those calculations!

Using 2013 rates, your approximate choices are $672.30/mth at age 60, $730.62/mth at age 61, $793.80 at age 62, $866.70 at age 63, $939.60 at age 64 or $1,012.50 at age 65. Your actual start date doesn't have to be at those ages, but this gives you the range. If you want to calculate the "breakeven points", let's use age 60 and 65 as an example. You can receive $672.30 for life starting at age 60, or choose $1,012.50 for life starting at age 65. If you delay to age 65, you will have passed up on $40,338 ($672.30 x 60 month), but you will be ahead by $340.20/mth if you wait. It would take you 119 months ($40,338/$340.20) or 9.9 years to make up the "passed on benefits", or age 74.9.

So, purely from a CPP benefit perspective, you are better off taking the CPP at age 60 if you die before age 75, but better off waiting until age 65 if you live beyond age 75. I'll let you work out the other breakeven points.


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## RBull

I will be turning 54 in May and plan to retire from my P/T position in December 2014 at age 55 & 7 months. My most recent statement (Feb 07, 2013 says I would collect $938.43 at 65)
22 of my 35 working years on the the statement (1977-2011)were at MPE, 3 had no contributions(self employed) and 10 yrs at various levels probably averaging 60%, and a little higher % for the years 2012-14. 

I would like to know what benefits would be at ages 60 through 65 as I'm not sure the government calculator factors in leaving work earlier than when benefits would be available. (I'm not expecting $938.43 at 65)

TIA


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## Sherlock

Should someone more than 35 years from retirement still count on CPP being there for them when they retire?


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## Dogger1953

RBull said:


> I will be turning 54 in May and plan to retire from my P/T position in December 2014 at age 55 & 7 months. My most recent statement (Feb 07, 2013 says I would collect $938.43 at 65)
> 22 of my 35 working years on the the statement (1977-2011)were at MPE, 3 had no contributions(self employed) and 10 yrs at various levels probably averaging 60%, and a little higher % for the years 2012-14.
> 
> I would like to know what benefits would be at ages 60 through 65 as I'm not sure the government calculator factors in leaving work earlier than when benefits would be available. (I'm not expecting $938.43 at 65)
> 
> TIA


RBull - Your calculations are a little more complicated than Daniel's. Since you have less than 39 years of max contributions, although you'll get a higher % each year that you wait, your actual "calculated retirement benefit" decreases because of the extra year of zero earnings. I could still do precise calculations if you wanted to email me @ [email protected], but for now I can give you the following estimates, based on the equivalent of 30.4 yrs of max contributions (22 @ max, 10 @ 60% and 3 @ 80%):

At age 60, you could receive $586.29 (66.4% of $882.96); at age 61 $622.33 (72.16% of $862.43); at age 62 $660.78 (78.4% of $842.83); at age 63 $705.43 (85.6% of $824.10); at age 64 $748.14 (92.8% of $806.18) and at age 65 $789.23 (100% of $789.23).

Using the ages of 60 and 65 to compare, your breakeven calculation changes a bit from Daniel's. You could choose $586.29 at age 60 or delay until age 65 and receive $789.23. You would be passing up $35,177.40 ($586.29 x 60 mths) to receive $202.94 ($789.23 - $586.29) more monthly. It would take you approx 173.3 mths (14.4 yrs) to make up this amount, so your breakeven age would be 79.4 yrs old.


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## Dogger1953

Sherlock said:


> Should someone more than 35 years from retirement still count on CPP being there for them when they retire?


Not my area of expertise, but I think (hope) so!


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## RBull

Thank you very much for the calculations. Now I have some more planning to do. 



Dogger1953 said:


> RBull - Your calculations are a little more complicated than Daniel's. Since you have less than 39 years of max contributions, although you'll get a higher % each year that you wait, your actual "calculated retirement benefit" decreases because of the extra year of zero earnings. I could still do precise calculations if you wanted to email me @ [email protected], but for now I can give you the following estimates, based on the equivalent of 30.4 yrs of max contributions (22 @ max, 10 @ 60% and 3 @ 80%):
> 
> At age 60, you could receive $586.29 (66.4% of $882.96); at age 61 $622.33 (72.16% of $862.43); at age 62 $660.78 (78.4% of $842.83); at age 63 $705.43 (85.6% of $824.10); at age 64 $748.14 (92.8% of $806.18) and at age 65 $789.23 (100% of $789.23).
> 
> Using the ages of 60 and 65 to compare, your breakeven calculation changes a bit from Daniel's. You could choose $586.29 at age 60 or delay until age 65 and receive $789.23. You would be passing up $35,177.40 ($586.29 x 60 mths) to receive $202.94 ($789.23 - $586.29) more monthly. It would take you approx 173.3 mths (14.4 yrs) to make up this amount, so your breakeven age would be 79.4 yrs old.


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## Red

Dogger 1953

I'm not looking for exact calculations just idea whether early CPP or waiting to age 65 is better.

Some details - 
Wife is aged 60 & not planning to work any longer. 
She has 8+ years of no CPP contributions due to me being transferred around in my employment (so about 13 non contributory years at 65)
Based on family history she could easily be drawing CPP for 20 years +

I'm mainly not sure how taking a reduced CPP is offset by the affect of not contributing to CPP age 60 to age 65, especially when there are non-contributory years earlier in workig career.

Thanks


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## Karen

I had a pleasant surprise from Canada Pension last year. My husband, who was 16 years older than I, died in 2003. He had been receiving a CPP pension for 11 years at the time of his death and I received a survivor's benefit. A few years later, I retired and started taking my own CPP which brought me close to the maximum so my survivor's benefit was reduced to only a few dollars. Then just last year (2012) I received a letter from Canada Pension informing me that my husband's pension amount had been miscalculated and enclosing a cheque for about $3800 payable to his estate. A separate letter came addressed to me personally explaining that an error had been made calculating my husband's pension, so therefore my survivor's benefit had also been miscalculated. I received an extra amount of about $1100. Obviously I was pleased to receive a completely unexpected amount of over $5000, but I was very surprised that it had taken them nine years to discover the error, and I couldn't help but wonder what would have happened if the error hadn't been in my favour. Would I have been expected to repay them after all that time?


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## OptsyEagle

Another question came to mind. I am not sure if it was asked or addressed. If a person takes CPP at 60, with the reduced amount as opposed to age 65, do they also have to factor in 5 years of 0 earnings and CPP contributions (years between age 60 and 65). Assuming they are retired by or before age 60.


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## Dogger1953

OptsyEagle said:


> Another question came to mind. I am not sure if it was asked or addressed. If a person takes CPP at 60, with the reduced amount as opposed to age 65, do they also have to factor in 5 years of 0 earnings and CPP contributions (years between age 60 and 65). Assuming they are retired by or before age 60.


Optsy - No, if they take their CPP at 60, they don't have to worry about the 5 years of 0 earnings between age 60 and 65, but if they don't take it at age 60, those same 5 years of 0 earnings can reduce their calculated CPP significantly.


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## Dogger1953

Karen said:


> I had a pleasant surprise from Canada Pension last year. My husband, who was 16 years older than I, died in 2003. He had been receiving a CPP pension for 11 years at the time of his death and I received a survivor's benefit. A few years later, I retired and started taking my own CPP which brought me close to the maximum so my survivor's benefit was reduced to only a few dollars. Then just last year (2012) I received a letter from Canada Pension informing me that my husband's pension amount had been miscalculated and enclosing a cheque for about $3800 payable to his estate. A separate letter came addressed to me personally explaining that an error had been made calculating my husband's pension, so therefore my survivor's benefit had also been miscalculated. I received an extra amount of about $1100. Obviously I was pleased to receive a completely unexpected amount of over $5000, but I was very surprised that it had taken them nine years to discover the error, and I couldn't help but wonder what would have happened if the error hadn't been in my favour. Would I have been expected to repay them after all that time?


That's an unusual situation that you describe. I can't imagine how it would happen in reverse, but I don't think there would have been any significant effort to recover the overpayment of your husband's retirement pension from you. They would likely however, attempt recovery of any survivor's overpayment directly to you.


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## Dogger1953

Red said:


> Dogger 1953
> 
> I'm not looking for exact calculations just idea whether early CPP or waiting to age 65 is better.
> 
> Some details -
> Wife is aged 60 & not planning to work any longer.
> She has 8+ years of no CPP contributions due to me being transferred around in my employment (so about 13 non contributory years at 65)
> Based on family history she could easily be drawing CPP for 20 years +
> 
> I'm mainly not sure how taking a reduced CPP is offset by the affect of not contributing to CPP age 60 to age 65, especially when there are non-contributory years earlier in workig career.
> 
> Thanks


Red - Assuming there were no children and the child-rearing dropout (CRDO) isn't a factor, your wife's situation would be very comparable to RBull above. Even if the actual amounts are different, the percentages would be similar, and the breakeven calculation would therefore be similar. From a CPP perspective only, your wife would therefore be ahead of the game by applying at age 60 IF she dies before age 79.4, and she would be better of waiting until age 65 if she lives past age 79.4.


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## peterk

Hey Dogger, welcome to the forum!

If I, as a canadian citizen, work in Canada from age 25 to 35, then never hold employment again, will I still qualify for 10/40 years of the max CPP payment, or will the 30 non-earning years reduce or eliminate my entitilement? What if I spend some years between 35 to 65 as a non-resident out of the country? What if I spend ALL years between 35-65 out of the country? Will this affect my pension entitlement at 65?


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## Daniel A.

Thanks Dogger 1953

You have given me something to think about I may contact you likely will as what I receive could cost me more without your help.

Something else folks can consider.

My wife turns 60 this month and has five years to go before retiring.
She has decided to apply for her CPP now and put the money to her RRSP as she does have plenty of room.
The net effect is it won't change her income but she can build her RRSP with the money she receives .

Given that she has five more years of work it will adjust her CPP pension at 65.


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## Dogger1953

peterk said:


> Hey Dogger, welcome to the forum!
> 
> If I, as a canadian citizen, work in Canada from age 25 to 35, then never hold employment again, will I still qualify for 10/40 years of the max CPP payment, or will the 30 non-earning years reduce or eliminate my entitilement? What if I spend some years between 35 to 65 as a non-resident out of the country? What if I spend ALL years between 35-65 out of the country? Will this affect my pension entitlement at 65?


PeterK - If those 10 years of employment were all at the max contribution rate (ie., your earnings were at or above the YMPE in those years), then YES, you will qualify for 10/40ths of the max CPP payout at age 65. And if that occurs in 2014 or later, you actually get a raise to 10/39ths, as the general dropout increases to 17%, and you can then drop out your lowest 8 years of earnings. It doesn't matter why you don't contribute those other years, or where you're living or whether you remain a Canadian citizen or not. Some of those factors would affect if and how much Old Age Security you qualify for however, although I'd need a bit more detail to fully answer that for you.


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## Dogger1953

Daniel A. said:


> Thanks Dogger 1953
> 
> You have given me something to think about I may contact you likely will as what I receive could cost me more without your help.
> 
> Something else folks can consider.
> 
> My wife turns 60 this month and has five years to go before retiring.
> She has decided to apply for her CPP now and put the money to her RRSP as she does have plenty of room.
> The net effect is it won't change her income but she can build her RRSP with the money she receives .
> 
> Given that she has five more years of work it will adjust her CPP pension at 65.


Daniel - I'm glad if my free advice helps you at all, but I'd love to have you as a paying customer also!!

One comment on your wife's situation. I'm not exactly sure how CPP will treat her 2013 earnings and contributions, as this is quite a new situation, and there is really no process for them to identify what earnings were earned before/after she starts receiving her CPP, within the 2013 calendar year. What is certain is how her contributions for 2014 and later will be considered. They will NOT increase her CPP retirement pension that she's taking at age 60. That is fixed at the reduced age-60 amount, subject only to the annual inflation of increases in the CPI. What they WILL DO, is create new post-retirement benefits (PRBs). For each year that she contributes after starting her CPP retirement, she will generate a new PRB which is payable monthly starting in January of the following year, and is payable for life. The amount of the PRB is approximately equal to how the additional year of contribution would have affected her CPP pension if she hadn't applied for it at age 60, but I thought I should make that distinction for you anyway.
I hope this makes a bit of sense, but I realize the PRB is a totally new and somewhat complex benefit. I'm looking forward to receiving my first PRB next year!


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## peterk

Dogger1953 said:


> PeterK - If those 10 years of employment were all at the max contribution rate (ie., your earnings were at or above the YMPE in those years), then YES, you will qualify for 10/40ths of the max CPP payout at age 65.


Would that be 10/39ths of the max CPP payout at age 35 (the last year of employment earnings) or the max payout 30 years in the future, at age 65? I would image the max would about double over that period due to inflation...

No need for specific numbers - This is long term planning I just want to make sure I understand the general way CPP works.


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## Dogger1953

peterk said:


> Would that be 10/39ths of the max CPP payout at age 35 (the last year of employment earnings) or the max payout 30 years in the future, at age 65? I would image the max would about double over that period due to inflation...
> 
> No need for specific numbers - This is long term planning I just want to make sure I understand the general way CPP works.


PeterK - That would be 10/39ths of the max for the year that your CPP pension starts, so 30 years in the future in your case.


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## Addy

Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


Congratulations Dogger! I hope you have a lovely trip planned to celebrate?

Do you know much about CPP disability benefits?


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## Dogger1953

Addy said:


> Congratulations Dogger! I hope you have a lovely trip planned to celebrate?
> 
> Do you know much about CPP disability benefits?


No big trip(s) planned, but better than heading off to the office every morning!

As for CPP disability, I know all of the legislation concerning it, but it's hard to comment on the medical side of it except to quote from the legilsation. What's your question?


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## Rainey

Dogger -- this may be outside your area of expertise (but you still may have an opinion).

I am 42 and currently employed in a regular job but trying to think through the options on starting my own company, including whether or not I pay myself a salary and make CPP contributions, or just go with dividends. 

How would you recommend I try and weigh whether or not additional contributions would be worth it? 

My current CPP status is as follows:

If you were 65 today, • you could receive a monthly retirement pension of: $680.51
If you apply at the age of 60, • you could receive a monthly retirement pension of: $435.53
If you apply at the age of 70, • you could receive a monthly retirement pension of: $966.32

Thanks for any guidance.


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## Dogger1953

Rainey said:


> Dogger -- this may be outside your area of expertise (but you still may have an opinion).
> 
> I am 42 and currently employed in a regular job but trying to think through the options on starting my own company, including whether or not I pay myself a salary and make CPP contributions, or just go with dividends.
> 
> How would you recommend I try and weigh whether or not additional contributions would be worth it?
> 
> My current CPP status is as follows:
> 
> If you were 65 today, • you could receive a monthly retirement pension of: $680.51
> If you apply at the age of 60, • you could receive a monthly retirement pension of: $435.53
> If you apply at the age of 70, • you could receive a monthly retirement pension of: $966.32
> 
> Thanks for any guidance.


Rainey - That's a really good question, and some of the answers are outside of my area of expertise, but I suspect others on this forum will have some thoughts for you.

Strictly from a CPP perspective, you should be aware that the retirement pension estimates from the Service Canada site assume that the next 23 years of your working will be identical to what you've earned between age 18 and now, as compared to the YMPE for each year. If you don't contribute any more to the CPP, your actual benefits at age 60, 65 and 70 would likely decrease by about 50%, since you're 24 years into your contributory period and you've got 23 years left until age 65. I could do some actual calculations for you if you emailed your CPP statement of contributions to me at [email protected], but I charge $25 for each accurate calculation.

On the other hand, what your current contributions will "buy" you in 23 years is probably irrelevant to your current decision. A quick way of looking at payback on CPP contributions for a self-employed person (9.9%) versus the retirement benefit value (approx 0.64% per year of contribution, at age 65). This would give you a breakeven period of approx 15.5 yrs after you become eligible for an age-65 retirement benefit.

It's flawed to look at CPP "value" just on the basis of retirement pension payback though, as the CPP also covers you for disability and survivor benefits. Disability benefits require that you've made contributions in at least 4 of the last 6 years prior to becoming disabled. That means that if you decide not to contribute to CPP, you may want to take out your own private disability coverage, just in case.

I don't know if any of this helps, but good luck in whatever option you choose.


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## Dogger1953

Rainey said:


> Dogger -- this may be outside your area of expertise (but you still may have an opinion).
> 
> I am 42 and currently employed in a regular job but trying to think through the options on starting my own company, including whether or not I pay myself a salary and make CPP contributions, or just go with dividends.
> 
> How would you recommend I try and weigh whether or not additional contributions would be worth it?
> 
> My current CPP status is as follows:
> 
> If you were 65 today, • you could receive a monthly retirement pension of: $680.51
> If you apply at the age of 60, • you could receive a monthly retirement pension of: $435.53
> If you apply at the age of 70, • you could receive a monthly retirement pension of: $966.32
> 
> Thanks for any guidance.


Rainey - I just re-read your question, and realized that you talked about paying yourself as an employee and not considering yourself as self-employed. That perhaps changes the math a bit, as you would only be paying 4.95% as an employee, and your company would be paying the other 4.95% as the employer. Possibly irrelevant though, as you are the company.


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## MoneyGal

It may be worth noting that CPP contributions as an employer are tax-deductible, while CPP contributions as an employee give rise to a tax credit. The after-tax cost will be less than 4.95% in both cases.


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## Dogger1953

MoneyGal said:


> It may be worth noting that CPP contributions as an employer are tax-deductible, while CPP contributions as an employee give rise to a tax credit. The after-tax cost will be less than 4.95% in both cases.


MoneyGal - I thought about mentioning that also, but since any benefits are taxable, I thought that might be a wash?


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## MoneyGal

Yes, but if you are considering *whether to pay the premiums in the first place* you should probably take into account the tax cost.


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## MoneyGal

Dogger1953 said:


> A quick way of looking at payback on CPP contributions for a self-employed person (9.9%) versus the retirement benefit value (approx 0.64% per year of contribution, at age 65). This would give you a breakeven period of approx 15.5 yrs after you become eligible for an age-65 retirement benefit.


For what it's worth, I think the other part of this equation - once you have this basic data on the payback period - is knowing the probability you will survive over the length of the payback period and beyond. So if the payback period is 15.5 years after age 65, what is the likelihood that someone aged 65 today will live an additional 15.5 years? For a Canadian man aged 65 today, it's about 60%.


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## Rainey

"Strictly from a CPP perspective, you should be aware that the retirement pension estimates from the Service Canada site assume that the next 23 years of your working will be identical to what you've earned between age 18 and now, as compared to the YMPE for each year. If you don't contribute any more to the CPP, your actual benefits at age 60, 65 and 70 would likely decrease by about 50%, since you're 24 years into your contributory period and you've got 23 years left until age 65. I could do some actual calculations for you if you emailed your CPP statement of contributions to me at [email protected], but I charge $25 for each accurate calculation."

Dogger -- thanks for your response (and Moneygal, thanks goes without saying). This little tidbit about the assumptions of the calculator never occured to me and is very valuable indeed (even if my CPP won't be!). It strike me there could well be healthy market for such specialized advice. Best of luck with the consulting, and may well be in touch when I take the plunge.


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## sags

Hi Dogger..........welcome to the Forum

Regarding the CPP death benefit.

As I understand it, as executor for my dad who passed away September 2012, I have to file a final tax return for 2012 by April 30th...........but cannot enter the CPP death benefit on that return. I must file another return..........a T3 return?...........and put the death benefit on it?

He will have no income after his death, as everything else can be entered on the 2012 return.

Is this correct?


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## Dogger1953

sags said:


> Hi Dogger..........welcome to the Forum
> 
> Regarding the CPP death benefit.
> 
> As I understand it, as executor for my dad who passed away September 2012, I have to file a final tax return for 2012 by April 30th...........but cannot enter the CPP death benefit on that return. I must file another return..........a T3 return?...........and put the death benefit on it?
> 
> He will have no income after his death, as everything else can be entered on the 2012 return.
> 
> Is this correct?


Sags - Your question is more of a tax issue than a CPP issue, so I'm not going to pretend to be an expert on that. I do believe that you're correct though, and here is a CRA link that you may find useful: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/114/dth-eng.html


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## sags

Thanks for the reply Dogger.

From the link you provided, and reading some other information, it appears that I have 2 choices.

Claim the CPP death benefit on my own taxes or file a T3 Trust tax return.

The T3 looks complicated......requiring a trust number and other things.........so I will probably take the easy route and simply claim the benefit on my own return and then bill the estate for the estimated 500 taxes on the 2500 benefit.

The only other option is to split the 2500 among the 5 beneficiaries...........but that is just too much work.

I was surprised to learn the CPP is taxable though. Any other death benefit can be entered on the deceased terminal tax report and be included in a 10,000 deduction, making it tax free.

I am sure there is a logical reason, but it seems odd to treat the CPP death benefit differently than all others.


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## Dogger1953

sags said:


> Thanks for the reply Dogger.
> 
> From the link you provided, and reading some other information, it appears that I have 2 choices.
> 
> Claim the CPP death benefit on my own taxes or file a T3 Trust tax return.
> 
> The T3 looks complicated......requiring a trust number and other things.........so I will probably take the easy route and simply claim the benefit on my own return and then bill the estate for the estimated 500 taxes on the 2500 benefit.
> 
> The only other option is to split the 2500 among the 5 beneficiaries...........but that is just too much work.
> 
> I was surprised to learn the CPP is taxable though. Any other death benefit can be entered on the deceased terminal tax report and be included in a 10,000 deduction, making it tax free.
> 
> I am sure there is a logical reason, but it seems odd to treat the CPP death benefit differently than all others.


Sags - No problema. Only wish I could have been more help to you! That's very generous of you to suggest that there must be a logical reason for this situation. In my 32 years with the government, I don't remember logical and legislation ever being used together in the same sentence.


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## dubmac

Hi Dogger - 

My question relates to CPP and mum's who spend their "prime" working years raising kids. Not sure, but I think that CPP does recognize these years in one way or another and pays some money in retirement for these periods.

Me: 52, Her: 50. 
Our CPP payment history is logged below for the 2 of us - 
Age 16-22 - both of us worked summer & seasonal work during university - some of those years (3) had maxed out contributions.
23-26 - Full contributions to CPP
26-29 - Partial Contribution (say 40%) during which we pursued further education.
Me: 32-52 (20 yrs) fill CPP contribution
My wife - since age 30 - no CPP contribution as she raised 2 kids.

How does CPP recognize those years when women are raising kids?


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## Dogger1953

dubmac said:


> Hi Dogger -
> 
> My question relates to CPP and mum's who spend their "prime" working years raising kids. Not sure, but I think that CPP does recognize these years in one way or another and pays some money in retirement for these periods.
> 
> Me: 52, Her: 50.
> Our CPP payment history is logged below for the 2 of us -
> Age 16-22 - both of us worked summer & seasonal work during university - some of those years (3) had maxed out contributions.
> 23-26 - Full contributions to CPP
> 26-29 - Partial Contribution (say 40%) during which we pursued further education.
> Me: 32-52 (20 yrs) fill CPP contribution
> My wife - since age 30 - no CPP contribution as she raised 2 kids.
> 
> How does CPP recognize those years when women are raising kids?


Dubmac - The CPP recognizes years where a parent raised children up to the age of 7, by allowing a "dropout" of those years, known as the Child Rearing Dropout (CRDO). CRDO can't create a benefit on its own if that parent never contributes to CPP, but it can increase both the eligibility for disability/survivor benefits, and in can increase the amount of all benefits. For example, in your wife's case, I calculate that she has the equivalent of 8.6 yrs of max contributions. Without the CRDO, her CPP retirement benefit at age 65 would be about $223.60/mth. With the CRDO, (assuming your 2 children were born 3 years apart), her benefit would increase to approx $283.80/mth, by dropping out the 10 years while at least one of them was under age 7.


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## dubmac

awesome -thnaks for this Dogger.
one other question - 

Could I make contributions (max is around $2200) to my wife's CPP! Is there any advantage (other than the obvious - getting income in retirement) in doing so? Would the payments that I make to my spouses plan be taxed favousrably? seems like a longshot - but thought I'd ask anyway.


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## Dogger1953

dubmac said:


> awesome -thnaks for this Dogger.
> one other question -
> 
> Could I make contributions (max is around $2200) to my wife's CPP! Is there any advantage (other than the obvious - getting income in retirement) in doing so? Would the payments that I make to my spouses plan be taxed favousrably? seems like a longshot - but thought I'd ask anyway.


Dubmac - Contributions are mandatory if she has any earnings from employment or self-employment, but there is no way to make "voluntary" contributions aside from that. Once you are both at the point of being eligible for CPP retirement pensions however, you can apply for an "assignment of benefits", which will basically share your CPP retirement pensions equally, and thereby give her a larger pension and presumably result in a net tax savings.


----------



## dubmac

very helpful information Dogger! thanks again. I know I'll be loooking for this thread in 12-14 yrs as a get more serious about retirement!

I am curious however - Do many people "hire" their spouses (as staff or on a contract) and have their spouse pay CPP deductions in their salaries/fees? Seem like a perfectly legal way for a couple/family to maximize CPP if this kind of hiring arrangement can be made.


----------



## Dogger1953

dubmac said:


> very helpful information Dogger! thanks again. I know I'll be loooking for this thread in 12-14 yrs as a get more serious about retirement!
> 
> I am curious however - Do many people "hire" their spouses (as staff or on a contract) and have their spouse pay CPP deductions in their salaries/fees? Seem like a perfectly legal way for a couple/family to maximize CPP if this kind of hiring arrangement can be made.


Dubmac - I'm sure that happens, but that's outside my area of expertise and I'll leave it to others to comment on the legalities and wisdom (financial and otherwise) of doing so.


----------



## Islenska

Dogger found this thread very helpful,
My situation is very similar to Daniel. I was going to delay (60 this year) as really not needing the cash now and feel it is back-up or money in the bank.
From your experience do most delay beyond 60 years.
CPP seems either black or white with most adamant "Take it as soon as you can or.................

We Canadians are blessed with such a plan, wonder how it compares to other countries?


----------



## Dogger1953

Islenska said:


> Dogger found this thread very helpful,
> My situation is very similar to Daniel. I was going to delay (60 this year) as really not needing the cash now and feel it is back-up or money in the bank.
> From your experience do most delay beyond 60 years.
> CPP seems either black or white with most adamant "Take it as soon as you can or.................
> 
> We Canadians are blessed with such a plan, wonder how it compares to other countries?


Islenska - In my experience, more people take their CPP sooner rather than later (including myself). That is starting to shift a bit though, with the increased penalty for taking it early, and the increased incentive for taking it later. All that I can suggest is to make sure that you know your numbers for both choices, so that you make your decision on facts rather than following any trend.

I agree that the combination of CPP and OAS is a pretty solid foundation for government-sponsored retirement programs, and compares very favourably with most other countries.


----------



## steve41

When you actually do the math, it turns out that delaying both CPP and OAS will extend your planning horizon the farthest. The only counter is that if you die prematurely, your estate will be worse off. It is a tricky calc.


----------



## sags

Don't forget that spousal CPP benefits only go up to the maximum benefit for 1 person.

So, if both wait and are collecting maximum or more........and one passes away, they are not entitled to any spousal benefit.

This information is what decided it for us.

We both took it early.............so we get the 120 extra payments from 60-65.

If we both live long enough that we would have been better off waiting to receive our benefits until we were 65........then we are both alive and still collecting CPP, OAS, and our pensions, so lower CPP benefits due to taking it early may be irritating but not crucial to our finances at that time.

If one of us passes away...........it doesn't matter anyways, as we will be topped up to the maximum for 1 person.


----------



## Karen

Judging by my experience, I don't think it's as simple as the surviving spouse receiving enough of their deceased partner's CPP to bring them up to the maximum. I know that I received a survivor's benefit in the range of approximately $350 when my husband died. Later, when I retired at 63 and started collecting my own CPP, my survivor's benefit was reduced to a lesser amount (I don't remember how much) and then when I turned 65, the survivor's benefit was further reduced to only $30 dollars a month which is added to my own pension but still leaves me short of the maximum. Perhaps Dogger can clarify this for us.


----------



## Dogger1953

Karen said:


> Judging by my experience, I don't think it's as simple as the surviving spouse receiving enough of their deceased partner's CPP to bring them up to the maximum. I know that I received a survivor's benefit in the range of approximately $350 when my husband died. Later, when I retired at 63 and started collecting my own CPP, my survivor's benefit was reduced to a lesser amount (I don't remember how much) and then when I turned 65, the survivor's benefit was further reduced to only $30 dollars a month which is added to my own pension but still leaves me short of the maximum. Perhaps Dogger can clarify this for us.


Karen - You are 100% correct that combined benefit calculations are not as simple as being subject to whatever brings you up to a maximum retirement pension. That is only one of the 3 possible amounts, and the "maximum" doesn't mean what most people think it does. What it does mean in this context is your "unreduced calculated retirement benefit". This means for instance, that when the max for an age-65 pension is $1,012.50 for 2013, if you started your retirement at age 63 at a 12% reduction, your maximum for combination purposes would be 88% of $1,012.50 or $891.00. While you were under age 65 however, you would also have been eligible for the survivor's flat-rate benefit ($173.82 for 2013), which would have disappeared when you turned age 65, but it would have been replaced by a larger percentage of your husband's CPP, but subject to the same maximum as above. Before you think it's that simple though, there's a "special adjustment" to your retirement benefit in this situation, that would basically "unreduce" a portion of your retirement benefit to offset for any of the survivor's benefit that you aren't receiving as a result of being limited by the maximum combined formula.

I've devised an Excel sheet that will approximate this combined calculation, and I would love to test it by using your case as an example. If you're interested, email me offline @ [email protected].


----------



## OptsyEagle

As a rule of thumb. If the choice is to leave your money a little longer under the control of a politician, or take it into your own control, the rule of thumb states, take it now ... or it will quickly be given to some other person that will ensure a larger number of votes for that said politician. This rule has never been broken.


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## steve41

OK here is a 59 yearold, retired with 750K inside his RRSP and 250K outside. Lives in BC. If he forces a constant $45K net income out over time, he will run out of capital at age 95 should he elect to take CPP and OAS early.

If he elects to delay his CPP and OAS til age 70, his capital will take him out to age 101..... fully 6 years longer.

Early or late CPP&OAS


----------



## Charlie

Interesting graph Steve. Seems if our 59 YO lives past 81 he's better off delaying the CPP (kind of counterintuitive to me...but it does make sense). If he dies before 81 he would have been best collecting early.

And of course, his plan must weather 21 yrs of federal budgets which might change the parameters yet again.


----------



## Karen

Dogger1953 said:


> I've devised an Excel sheet that will approximate this combined calculation, and I would love to test it by using your case as an example. If you're interested, email me offline @ [email protected].


Thanks, Dogger. I will do that, but first I want to look into my records and see if I can come up with more precise amounts for you. I'm on my way out right now, but I'll e-mail you within a few hours.


----------



## Dogger1953

steve41 said:


> OK here is a 59 yearold, retired with 750K inside his RRSP and 250K outside. Lives in BC. If he forces a constant $45K net income out over time, he will run out of capital at age 95 should he elect to take CPP and OAS early.
> 
> If he elects to delay his CPP and OAS til age 70, his capital will take him out to age 101..... fully 6 years longer.
> 
> Early or late CPP&OAS


I would basically agree with Charlie's assessment, but did you remember to adjust your CPP calcs for the extra years of zero earnings/contributions? And did you remember to adjust the OAS for the "voluntary deferral" which starts July 2013?

Just out of curiosity, what did you use for cost-of-living increases and for a rate-of-return on your investments?


----------



## steve41

Dogger1953 said:


> I would basically agree with Charlie's assessment, but did you remember to adjust your CPP calcs for the extra years of zero earnings/contributions? And did you remember to adjust the OAS for the "voluntary deferral" which starts July 2013?
> 
> Just out of curiosity, what did you use for cost-of-living increases and for a rate-of-return on your investments?


I assumed he's fully retired and his accumulated CPP brownie points are the same. I used 2% inflation and 4% nom rate of return. My experience is that of all the parameters in the financial equation, the tax algorithm and cpi have fluctuated the least, especially since the tax brackets were indexed by Paul Martin. The value of Nortel, not so much.


----------



## Dogger1953

sags said:


> Don't forget that spousal CPP benefits only go up to the maximum benefit for 1 person.
> 
> So, if both wait and are collecting maximum or more........and one passes away, they are not entitled to any spousal benefit.
> 
> This information is what decided it for us.
> 
> We both took it early.............so we get the 120 extra payments from 60-65.
> 
> If we both live long enough that we would have been better off waiting to receive our benefits until we were 65........then we are both alive and still collecting CPP, OAS, and our pensions, so lower CPP benefits due to taking it early may be irritating but not crucial to our finances at that time.
> 
> If one of us passes away...........it doesn't matter anyways, as we will be topped up to the maximum for 1 person.


Sags - I hate to tell you, but you've been given some wrong information about how combined (retirement & survivor) benefits work. The "maximum" refers to what your "calculated retirement pension" is prior to any reduction for taking it early. If your benefit(s) are the maximum for an age-60 pension the only survivor's benefit either of you will be eligible is the flat-rate portion, and that only while you're under age 65. After age 65, neither of you will be eligible for any survivor's benefit, if your retirement pensions are at the max age-60 rate. 
The only good news is that by taking it early, when one of you dies, the survivor will become eligible for a "special adjustment" to his/her retirement benefit. What this special adjustment attempts to do is "unreduce" a portion of the survivor's retirement pension, equivalent to the "lost" survivor's benefit. 
I'll be writing an article on this subject in the not-too-distant future, and I'll post a link to that article once it's available.


----------



## sags

Thanks for the info Dogger.............

I will look forward to the article.


----------



## Dogger1953

sags said:


> Thanks for the info Dogger.............
> 
> I will look forward to the article.


Here is a link to my article on how CPP combined survivor/retirement benfits are calculated: http://retirehappy.ca/cpp-survivor-benefits/


----------



## newfoundlander61

I have a good question that I am attempting to figure out. Retired from the Canadian Armed Forces and in receipt of a Defined Benefit Pension Plan. Similar to Retired RCMP's pension, it is clawed back once I am able to draw CPP at 65. Not sure how much the claw back % is. My question is it better for me in my specific case to start drawing CPP at age 
60 (reduced of course) and invest the money each month into my TFSA. If I invest the amount for the full 5 years this may reuce the impact of the clawback for a while anyway. Opinions are most welcome, there may be no 100% right answer but I have to plan for it.


----------



## jmarks

First off Thank You for your kind offer to help out the folks on this forum!

I'm so messed up trying to figure out if I should retire or not I can hardly think straight, which of course isn't making the planning any easier.
I'll be 55 in Sept. of this year and have contributed the max. amount since 1977. My wife and I both have defined benefits pension plans (no we are not gov. employees) and we know our monthly income's from those pensions. 

Current Service Canada print-out for me states $1012.50 at 65, $648 at 60 and $1437.75 at 70.

If I retire Jan.1, 2014 and don't work anymore can I expect to get those dollar value's at those ages or will it be reduced? Also what would be the best age to actually start drawing? And finally is there a magic number/age where the service Canada print-out will always be accurate. i.e. do I have to be a certain age or have contributed the max. amount for x years?

Our current plan is to use my RRSP's to tide me over until age 62 so that my company pension is not reduced(and pay less tax), then live on our company pensions and gov. benefits. My wife is 3 years older than me and plans to work until 62, unless her health won't allow it.

TIA


----------



## Dogger1953

newfoundlander61 said:


> I have a good question that I am attempting to figure out. Retired from the Canadian Armed Forces and in receipt of a Defined Benefit Pension Plan. Similar to Retired RCMP's pension, it is clawed back once I am able to draw CPP at 65. Not sure how much the claw back % is. My question is it better for me in my specific case to start drawing CPP at age
> 60 (reduced of course) and invest the money each month into my TFSA. If I invest the amount for the full 5 years this may reuce the impact of the clawback for a while anyway. Opinions are most welcome, there may be no 100% right answer but I have to plan for it.


Newfi61 - I will leave it to others to comment on the wisdom of investing in TFSAs, but I can do detailed calculations to estimate your CPP at age 60, and at any other age(s) that you wish. I can only do that to any degree of accuracy if I have your entire CPP record of contributions, and I do charge $25 per calculation (I used to do it for free, but I couldn't keep up with the volume of such requests). If you're interested in this, email me at [email protected], along with your CPP statement of contributions.


----------



## Dogger1953

jmarks said:


> First off Thank You for your kind offer to help out the folks on this forum!
> 
> I'm so messed up trying to figure out if I should retire or not I can hardly think straight, which of course isn't making the planning any easier.
> I'll be 55 in Sept. of this year and have contributed the max. amount since 1977. My wife and I both have defined benefits pension plans (no we are not gov. employees) and we know our monthly income's from those pensions.
> 
> Current Service Canada print-out for me states $1012.50 at 65, $648 at 60 and $1437.75 at 70.
> 
> If I retire Jan.1, 2014 and don't work anymore can I expect to get those dollar value's at those ages or will it be reduced? Also what would be the best age to actually start drawing? And finally is there a magic number/age where the service Canada print-out will always be accurate. i.e. do I have to be a certain age or have contributed the max. amount for x years?
> 
> Our current plan is to use my RRSP's to tide me over until age 62 so that my company pension is not reduced(and pay less tax), then live on our company pensions and gov. benefits. My wife is 3 years older than me and plans to work until 62, unless her health won't allow it.
> 
> TIA


jmarks - The only magic number is that if you have at least 39 years of max contributions, you will receive the maximum CPP ($1,012.50 for 2013), adjusted up or down if you start receiving it at other than age 65.

If you want a personalized calculation, email me at [email protected], along with a copy of your CPP statement of contributions. You can give me various scenarios of when you might retire and when you might start your CPP. I charge $25 per calculation, but I can guarantee their accuracy.


----------



## Karen

I just wanted to say that Dogger has just finished doing some calculations for me, based on my own and my late husband's CPP situation, and I am so impressed with both his knowledge and his ability to make things clear to his clients. I think he must have been a big loss to Service Canada when he retired. This is a completely unsolicited and unexpected recommendation, by the way; he will be very surprised to see it.


----------



## Daniel A.

My thought would be that if an expert can give someone real numbers for 25.00 dollars its well worth jumping on. 
Dogger 1953 will be hearing from me before I make my move.

He can save me more in a month than my own assumptions can because once the decision is made there is no changing. 

Karen I have followed your posts and agree, Dogger 1953 is someone you had been hoping for.


----------



## Karen

You're right, Daniel, that it will be a good idea to check with Dogger before you make the decision. In my case, I have been collecting my CPP for about six years now (from age 63) and I've not ever regretted that decision, but I never really understood the long-term effects of making it. I'm one of those curious people who likes to understand things, and it's always bothered me that I didn't understand what happened when the two different changes to my survivor's benefit occurred, so I was really interested in finding that out. It wasn't important in the overall scheme of things, but it resolved a question in my mind, and I like that!


----------



## Dogger1953

Karen said:


> I just wanted to say that Dogger has just finished doing some calculations for me, based on my own and my late husband's CPP situation, and I am so impressed with both his knowledge and his ability to make things clear to his clients. I think he must have been a big loss to Service Canada when he retired. This is a completely unsolicited and unexpected recommendation, by the way; he will be very surprised to see it.


Karen - Thanks very much for these kind words, and for your endorsement of my calculations. It was a pleasure working with you!


----------



## Dogger1953

Daniel A. said:


> My thought would be that if an expert can give someone real numbers for 25.00 dollars its well worth jumping on.
> Dogger 1953 will be hearing from me before I make my move.
> 
> He can save me more in a month than my own assumptions can because once the decision is made there is no changing.
> 
> Karen I have followed your posts and agree, Dogger 1953 is someone you had been hoping for.


Daniel - Thanks for your support, and I look forward to doing some calculations for you whenever you want them done.


----------



## jmarks

Dogger1953 said:


> jmarks - The only magic number is that if you have at least 39 years of max contributions, you will receive the maximum CPP ($1,012.50 for 2013), adjusted up or down if you start receiving it at other than age 65.
> 
> If you want a personalized calculation, email me at [email protected], along with a copy of your CPP statement of contributions. You can give me various scenarios of when you might retire and when you might start your CPP. I charge $25 per calculation, but I can guarantee their accuracy.


Thanks Dogger1953, I'll probably use your service's once I start to get a better understanding of where I'm headed.

So if I retire in 2014 at age 55 with 37 years of max. contributions how much is that going to cost me if I draw my cpp at age 65? Would it be 37/39*$1012.5 = $960.58 a month ?


----------



## Dogger1953

jmarks said:


> Thanks Dogger1953, I'll probably use your service's once I start to get a better understanding of where I'm headed.
> 
> So if I retire in 2014 at age 55 with 37 years of max. contributions how much is that going to cost me if I draw my cpp at age 65? Would it be 37/39*$1012.5 = $960.58 a month ?


jmarks - You are exactly correct on your age-65 calculation example!


----------



## PrairieGal

Hi Dogger, I printed out my estimated CPP benefits from the My Service Canada website. Are the estimates that they make based on the assumption of me making maximum contributions between now and retirement?

Also, I currently receive a Survivor's Benefit. Will I continue to receive the same amount in retirement?

Thanks,
Judy


----------



## Dogger1953

PrairieGal said:


> Hi Dogger, I printed out my estimated CPP benefits from the My Service Canada website. Are the estimates that they make based on the assumption of me making maximum contributions between now and retirement?
> 
> Also, I currently receive a Survivor's Benefit. Will I continue to receive the same amount in retirement?
> 
> Thanks,
> Judy


Judy - The Service Canada calculation assumes that you're eligible now, which has the same effect as if it projected your "average lifetime earnings" through until your date of eligibility. Depending on how close you are to actually being eligible and depending on whether your current earnings are above or below your average lifetime earnings, the Service Canada estimate can be quite accurate, or it can be quite misleading (higher or lower). Also, if you had no or reduced earnings while raising children under age 7, the Service Canada calculation can be significantly under, as it doesn't account for the Child Rearing Dropout (CRDO) provision.
The really bad thing about the Service Canada estimate is that it doesn't even mention what happens when you are eligible for both a retirement pension as well as a survivor's benefit. Your survivor's benefit is definitely recalculated (always lower) at age 65, but it will also be reduced when it becomes "combined" with your retirement benefit. Here is a link to an article that I wrote recently on the subject: http://retirehappy.ca/cpp-survivor-benefits/


----------



## duerf

*First and Last year in the contributory period*

I have a question regarding the treatment of the start year and the end year of the contributory period of the CPP. 

Once you have entered the CPP plan (in my case, the month after my 18th birthday), for the second year to the calendar year 
before you retire your pensionable earnings are captured on a yearly basis. For these years, monthly values are just 
(Yearly Value)/12. 

For the first and last years of the contributory period, for most plan participants, the divisor to calculate monthly values 
will be some integer that is smaller than 12. For example, in my case, my first "year" is only comprised of 2 months, and my 
last "year" will be 9 to 11 months (depends on Service Canada).

You have indicated that much of the CPP calculation is done with months (NCM, CRDO, and general dropout) and Service Canada
definitely has the information to calculate the properly adjusted first and last year of Adjusted Pensionable Earnings.

Do they make these adjustments to account for smaller first and last years? And if so how?


----------



## Dogger1953

duerf said:


> I have a question regarding the treatment of the start year and the end year of the contributory period of the CPP.
> 
> Once you have entered the CPP plan (in my case, the month after my 18th birthday), for the second year to the calendar year
> before you retire your pensionable earnings are captured on a yearly basis. For these years, monthly values are just
> (Yearly Value)/12.
> 
> For the first and last years of the contributory period, for most plan participants, the divisor to calculate monthly values
> will be some integer that is smaller than 12. For example, in my case, my first "year" is only comprised of 2 months, and my
> last "year" will be 9 to 11 months (depends on Service Canada).
> 
> You have indicated that much of the CPP calculation is done with months (NCM, CRDO, and general dropout) and Service Canada
> definitely has the information to calculate the properly adjusted first and last year of Adjusted Pensionable Earnings.
> 
> Do they make these adjustments to account for smaller first and last years? And if so how?


Duerf - Yes, they make adjustments to account for any partial year in your contributory period. Both the Year's Basic Exemption (YBE) and the Year's Maximum Pensionable Earnings (YMPE) are pro-rated for partial years. Using 2013 as an example, if you started your CPP benefit effective May, your contributory period would be just 4 months and your YMPE would be 4/12ths of $51,100 = $17,033. If your 2013 earnings exceeded that amount, you would be credited with 4 mths of max earnings when your benefit was calculated. Hope this helps?


----------



## duerf

*Initial CPP payments may be low.*



Dogger1953 said:


> Duerf - Yes, they make adjustments to account for any partial year in your contributory period. Both the Year's Basic Exemption (YBE) and the Year's Maximum Pensionable Earnings (YMPE) are pro-rated for partial years. Using 2013 as an example, if you started your CPP benefit effective May, your contributory period would be just 4 months and your YMPE would be 4/12ths of $51,100 = $17,033. If your 2013 earnings exceeded that amount, you would be credited with 4 mths of max earnings when your benefit was calculated. Hope this helps?


Thanks Dogger, this improves my confidence in the CPP spreadsheet I built from your instructions on retireHappy. 

I've read elsewhere on the 'net that Service Canada only uses contribution information based on assessed tax returns and so when you initially receive your CPP the calculation probably won't include information from the last (and possibly 2 last) tax assessments. Consequently, you will receive a slightly low monthly CPP payment. Apparently, when they do finally have the last contribution information they update the calculations (although you might have to remind them) and send a lump sum "make-up" payment retroactively. If they are missing two years of contribution information there may be two lump sum payments if the missing tax assessments are received by the CRA with a large enough time separation. Would you comment on this please?


----------



## Dogger1953

duerf said:


> Thanks Dogger, this improves my confidence in the CPP spreadsheet I built from your instructions on retireHappy.
> 
> I've read elsewhere on the 'net that Service Canada only uses contribution information based on assessed tax returns and so when you initially receive your CPP the calculation probably won't include information from the last (and possibly 2 last) tax assessments. Consequently, you will receive a slightly low monthly CPP payment. Apparently, when they do finally have the last contribution information they update the calculations (although you might have to remind them) and send a lump sum "make-up" payment retroactively. If they are missing two years of contribution information there may be two lump sum payments if the missing tax assessments are received by the CRA with a large enough time separation. Would you comment on this please?


duerf - This is exactly true. It actually used to be that these updates happened automatically, approximately Nov of every year. Based on recent Blogs though, it appears that it sometimes doesn't happen until several years later (if at all) unless you call to enquire. One of the services that I offer is to validate your CPP benefit amounts to determine whether they have or haven't included all of your earnings in determining your benefit amount. I charge $25 for this service, but it's not unusual to identify underpayments of several hundred dollars that may or may not be discovered otherwise.


----------



## PerfectElement

Hello,

I have contributed to CPP for 4 years, but now I am incorporated and paying myself with dividends. If I can help, I will never be an employee again. Am I ever going to get that money back? How?

Thanks in advance!


----------



## Dogger1953

PerfectElement said:


> Hello,
> 
> I have contributed to CPP for 4 years, but now I am incorporated and paying myself with dividends. If I can help, I will never be an employee again. Am I ever going to get that money back? How?
> 
> Thanks in advance![/QUOTE
> 
> with even one year of contribution to CPP, you will be eligible for a retirement pension. Each year of max contributions is generally worth about $25/mth for an age-65 retirement pension.


----------



## Cal

http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/rates.shtml
http://www.servicecanada.gc.ca/eng/isp/oas/oasrates.shtml

Hey Dogger, this is more of a general beginner quesiton on CPP, for those of us who have several years/decades until retirement.

I saw on the above mentioned links for CPP and OAS, that the average person monthly receives $535 for CPP and $515 for OAS. once they are 65, assuming they have been an employee for X number of years and have paid into it.

How is that different/affected for self employed or buisiness owners who have a corporation and pay themselves dividends.

How are both CPP and OAS scaled back if you are in higher tax brackets in retirement?

Is everyone entitled to both payemnts or are their situations where one may be scaled back?

Any info for those of us that really aren't at that point in our lives, but would appreciate a beginners lesson or a heads up, regarding these matters would be appreciated. Thanks for sharing your expertise and knowledge.


----------



## Dogger1953

Cal said:


> http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/rates.shtml
> http://www.servicecanada.gc.ca/eng/isp/oas/oasrates.shtml
> 
> Hey Dogger, this is more of a general beginner quesiton on CPP, for those of us who have several years/decades until retirement.
> 
> I saw on the above mentioned links for CPP and OAS, that the average person monthly receives $535 for CPP and $515 for OAS. once they are 65, assuming they have been an employee for X number of years and have paid into it.
> 
> How is that different/affected for self employed or buisiness owners who have a corporation and pay themselves dividends.
> 
> How are both CPP and OAS scaled back if you are in higher tax brackets in retirement?
> 
> Is everyone entitled to both payemnts or are their situations where one may be scaled back?
> 
> Any info for those of us that really aren't at that point in our lives, but would appreciate a beginners lesson or a heads up, regarding these matters would be appreciated. Thanks for sharing your expertise and knowledge.


Cal - OAS entitlement is based on the number of years of residence in Canada after age 18, so it would be the same amount regardless whether you were an employee or self-employed (or even unemployed). The maximum is approx $540 per month (Apr 2013), and is generally based on 40 years of residence in Canada after age 18. It is taxable, and is subject to a specific suratx if you have income over $69,562 (for 2012). It is payable anywhere in the world, if you have at least 20 years of residence in Canada after age 18. There are also supplementary benefits payable under the OAS program (GIS and Spouse's Allowance), but they are payable only if you reside in Canada and have low income, and I don't think you are interested in them.

CPP is based on your "average lifetime earnings", which includes only salary and self-employment earnings on which contributions have been made. The maximum for 2013 at age 65 is $1,012.50, and that amount would be payable only if you had made almost 40 years of max contributions. CPP benefita are taxable income, but there is no specific surtax or clawback at higher incomes. CPP benefits are payable anywhere in the world.


----------



## GoldStone

Dogger1953 said:


> Each year of max contributions is generally worth about $25/mth for an age-65 retirement pension.


Hi Dogger,

I was 29 when I came to Canada. I will have 25 years of max contributions if I retire at 55. Should I expect 25 x 25 = $625/month if I take CPP at 65?

Thank you!


----------



## Dogger1953

GoldStone said:


> Hi Dogger,
> 
> I was 29 when I came to Canada. I will have 25 years of max contributions if I retire at 55. Should I expect 25 x 25 = $625/month if I take CPP at 65?
> 
> Thank you!


Goldstone - $25/month for each year of max contributions is a valid method of estimating an age-65 CPP retirement pension, so YES you should be able to expect somewhere around $625/month at age 65 for your 25 years of max contributions. You may seriously want to consider taking it at age 60 though, because although it will be increasing each year after age 60 by about 7.2% for the actuarial age adjustment factor, the "calculated amount" will be decreasing by about 2.5% each year due to the extra year of zero earnings and contributions. That means that your net decrease if you take it at age 60 will only be about 23.5%, not 36%. 
Doesn't change the original answer to your question, but possibly food for thought?


----------



## GoldStone

Food for thought, yes. I have plenty of time to figure it out (I'm 45). Thank you for your answer.


----------



## Cal

Dogger1953 said:


> Cal - OAS entitlement is based on the number of years of residence in Canada after age 18, so it would be the same amount regardless whether you were an employee or self-employed (or even unemployed). The maximum is approx $540 per month (Apr 2013), and is generally based on 40 years of residence in Canada after age 18. It is taxable, and is subject to a specific suratx if you have income over $69,562 (for 2012). It is payable anywhere in the world, if you have at least 20 years of residence in Canada after age 18. There are also supplementary benefits payable under the OAS program (GIS and Spouse's Allowance), but they are payable only if you reside in Canada and have low income, and I don't think you are interested in them.
> 
> CPP is based on your "average lifetime earnings", which includes only salary and self-employment earnings on which contributions have been made. The maximum for 2013 at age 65 is $1,012.50, and that amount would be payable only if you had made almost 40 years of max contributions. CPP benefita are taxable income, but there is no specific surtax or clawback at higher incomes. CPP benefits are payable anywhere in the world.


Great reply, thanks for the information.

I am assuming the CPP mas of $1012.50 that you stated is the monthly maximum.


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## Dogger1953

Cal said:


> Great reply, thanks for the information.
> 
> I am assuming the CPP mas of $1012.50 that you stated is the monthly maximum.


Cal - Yup, the $1,012.50 is indeed the monthly maximum.


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## RedRose

I am 65 this year. I receive my late husband's CPP or a portion and mine to the tune of $700 approx.
If I take my OAS do they deduct anything from the CPP amount that I am receiving now?
Thank you in advance for this great thread.


----------



## PrairieGal

Cal said:


> Great reply, thanks for the information.
> 
> I am assuming the CPP max of $1012.50 that you stated is the monthly maximum.


CPP is not payable on dividends, so if you are paying yourself only dividends, and no salary, those years will not qualify for CPP.


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## 50/50

PrairieGal said:


> CPP is not payable on dividends, so if you are paying yourself only dividends, and no salary, those years will not qualify for CPP.


Did anyone ever calculate if it is worth the double premium of $ 2356.2 in order to receive the $25 /month max benefits?


----------



## Dogger1953

RedRose said:


> I am 65 this year. I receive my late husband's CPP or a portion and mine to the tune of $700 approx.
> If I take my OAS do they deduct anything from the CPP amount that I am receiving now?
> Thank you in advance for this great thread.


RedRose - The simple answer to your question is "No", nothing is deducted from your CPP based on whether or not you receive OAS. The slightly more complicated answer is that your survivor's benefit from your husband's CPP contributions will be recalculated when you turn age 65, regardless whether you qualify for and/or apply for OAS at that time. This recalculation is relatively simple if you weren't also receiving your own CPP retirement pension, but it is quite complicated if you are.
Here is a link to an article that I wrote to give you some idea of the calculation that is involved: http://retirehappy.ca/cpp-survivor-benefits/
You could try calling Service Canada at 1-800-277-9914 to see if they will try to estimate what your "combined benefit" will be when you turn 65, but my experience has been that they can't help much. At a minimum though, they should be able to tell you what the current breakdown is between your own retirement pension and your husband's survivor benefit. With that information and all the details on when both of your benefits started, I may be able to give you a fairly close estimate of what will happen when you turn age 65. 
It will almost certainly be a reduction, and my very rough guesstimate might be somewhere around $150 monthly.


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## RedRose

My sincere Thank YOU Dogger this removes some of the anxiety.
As I was anticipating a drop in income.
Now at least I am ready. 
Thank You for your prompt answer too. Cheers!


----------



## Dogger1953

50/50 said:


> Did anyone ever calculate if it is worth the double premium of $ 2356.2 in order to receive the $25 /month max benefits?


50/50 - Not my area of expertise, so I'll leave it to others to comment of the value of CPP contributions. 

The only comment that I will make is that the CPP also provides disabaility and survivor benefits (so don't forget those in any evaluation), and the $25/month is just an estimate and it would be more than $25 if the contributor had periods of time excluded or dropped out from their contributory period for disability or child-rearing purposes.


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## Daryl-Manitoba

From everything I've read as a general rule it looks like it is 50/50 between being paid out in dividend vs being paid a salary or wage from your own corporation. Specific situations will likely lean one way or the other, but even then I doubt it would be that significant. The government collects their taxes either way.


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## fraser

I took my CPP last year, at 60 @ @$700. month. I took it for two reasons. I wanted to take advantage of the old rules. I did not expect to have any earned income after age 60 and wanted to avoid the depreciation of my average earnings for CPP purposes. 

Now it seems that I may have maximum CPP income for three years from my former employer-realized at ages 61, 62, and 63. My understanding is that the new rules dictate that I will pay CPP on this. Will these three additional years of maximum CPP contributions have much of a positive impact on my CPP entitlement? Thanks


----------



## dubmac

Dogger - 
I looked at my CPP contributions & the payout the I expect on retirement. I have been contributing consistently for the past 23 yrs. I don't plan on leaving the job I'm in for another 5-8 yrs. I am maxing out contributions annually through my employer while also contributing to a DC pension plan.

My question:
Is there a limit that one can contribute (over a working lifetime) to the CPP? I mean, the maximum benefit as I recall is around 1100 per month when one maxes out their contribution after say 25 yrs. Why contribute after 25 yrs if the benefits on retirement do not extend beyond 1100 per month?


----------



## Dogger1953

fraser said:


> I took my CPP last year, at 60 @ @$700. month. I took it for two reasons. I wanted to take advantage of the old rules. I did not expect to have any earned income after age 60 and wanted to avoid the depreciation of my average earnings for CPP purposes.
> 
> Now it seems that I may have maximum CPP income for three years from my former employer-realized at ages 61, 62, and 63. My understanding is that the new rules dictate that I will pay CPP on this. Will these three additional years of maximum CPP contributions have much of a positive impact on my CPP entitlement? Thanks


fraser - The additional contributions won't increase your current retirement pension amount, but they will generate additional post-retirement benefits (PRBs). Each year of max contributions after starting your CPP retirement pension will generate a monthly PRB of approx $25 starting the following January, but adjusted (read reduced) based on your age at that time.


----------



## Dogger1953

dubmac said:


> Dogger -
> I looked at my CPP contributions & the payout the I expect on retirement. I have been contributing consistently for the past 23 yrs. I don't plan on leaving the job I'm in for another 5-8 yrs. I am maxing out contributions annually through my employer while also contributing to a DC pension plan.
> 
> My question:
> Is there a limit that one can contribute (over a working lifetime) to the CPP? I mean, the maximum benefit as I recall is around 1100 per month when one maxes out their contribution after say 25 yrs. Why contribute after 25 yrs if the benefits on retirement do not extend beyond 1100 per month?


dubmac - The only limit to how many years you can contribute is from age 18 to age 70 (52 years). A maximum pension currently requires maximum contributions in 84% of your contributory period (soon to be 83%), so 25 years of contributions would never generate a maximum pension. Currently, this requires 39.5 years of max contributions at age 65, and a little less if you took it at age 60 (but it would be at the reduced rate). If you contribute more than 39.5 years of max contributions, it won't increase your pension amount, but it will help maintain the fund!


----------



## dubmac

Dogger1953 said:


> Currently, this requires 39.5 years of max contributions at age 65, and a little less if you took it at age 60 (but it would be at the reduced rate). If you contribute more than 39.5 years of max contributions, it won't increase your pension amount, but it will help maintain the fund!


OK - I get it - I can't retire soon! :rolleyes2:


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## dattars

Hi Dogger,

My mother is turning 60 this year and has only been working for the past 10 years (she does not plan to work any longer). My 65 year old father passed away late last year and my mother has started collecting the survivor benefit, I believe there is some sort of clawback to this amount if she were to start collecting her CPP at this point. When would you advise she start collecting?

Thanks


----------



## Dogger1953

dattars said:


> Hi Dogger,
> 
> My mother is turning 60 this year and has only been working for the past 10 years (she does not plan to work any longer). My 65 year old father passed away late last year and my mother has started collecting the survivor benefit, I believe there is some sort of clawback to this amount if she were to start collecting her CPP at this point. When would you advise she start collecting?
> 
> Thanks


dattars - The formulas for calculating "combined" CPP retirement/survivor's benefits are quite complex, and I wouldn't want to give any advice without seeing actual dollar amounts for both her survivor's benefit and for her own estimated retirement benefit. Here's a link to an article that I wrote on the subject of combined benefits, so that you can see what I'm talking about: http://retirehappy.ca/cpp-survivor-benefits/

If you want me to do detailed calculations for your mother, email me at [email protected]. There is a fee for this service, but I know that others haven't had much success in getting any advice on combined benefits from Service Canada. You could always try calling them though, at 1-800-277-9914.


----------



## RedRose

I have a question for you too Dogger.

I am 65 this year and I was widowed at 62.

I receive a combined CPP, mine and my late husbands.
I work on a casual basis as an RN I am still contributing to CPP. Is this wise or am I better to discontinue at this point?
I am not sure if it makes any difference to my future CPP/OAS income?
I may continue to work on a casual basis for a little while longer.

Thanking you in advance for your time and advice.


----------



## Dogger1953

RedRose said:


> I have a question for you too Dogger.
> 
> I am 65 this year and I was widowed at 62.
> 
> I receive a combined CPP, mine and my late husbands.
> I work on a casual basis as an RN I am still contributing to CPP. Is this wise or am I better to discontinue at this point?
> I am not sure if it makes any difference to my future CPP/OAS income?
> I may continue to work on a casual basis for a little while longer.
> 
> Thanking you in advance for your time and advice.


RedRose - Once you're over age 65, contributions to CPP become optional if you're already receiving your CPP retirement pension. Any such contributions won't affect your existing combined benefit (which I previously mentioned will be reduced at age 65 anyway), nor will it affect your OAS directly. Each year of contribution after you started receiving your retirement pension will create a new "post-retirement benefit"(PRB), and that could reduce your GIS eligibility if you have a low enough income to qualify for GIS.

I feel that the PRB is a pretty good investment for your voluntary contributions, and here is a weblink to an article that I wrote on this subject: 
http://retirehappy.ca/contributing-to-cpp-after-age-65/


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## RedRose

Cheers! *Dogger*

My sincere thanks for sorting the wood from the trees so to speak.

I will continue to contribute then.


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## sags

Edit.........I read you informative blog and it answered my question..........

Thanks.


----------



## Dogger1953

RedRose said:


> Cheers! *Dogger*
> 
> My sincere thanks for sorting the wood from the trees so to speak.
> 
> I will continue to contribute then.


RedRose - Your very welcome! I would be interested to hear how much of a decrease there is to your combined benefit when you turn 65. If you feel like sharing that information, you could post it here or email me offline at [email protected].


----------



## Dogger1953

sags said:


> Edit.........I read you informative blog and it answered my question..........
> 
> Thanks.


Sags - Now you've got me curious! What was your question going to be?


----------



## sags

Dogger1953 said:


> Sags - Now you've got me curious! What was your question going to be?


The question was if a person taking early CPP at age 60-64 could contribute the extra contributions or only at age 65. 

From your blog, I believe it is age 65-70.

The other question is if the opt out provision was used, could a person change their mind later and contribute a "catch up" of contributions.

From your blog, I didn't get a direct answer on this question...............but the calculations you used showing the years required to break even, for a person contributing both the employer/employee contributions made it a non starter anyways.

Thanks.


----------



## Dogger1953

sags said:


> The question was if a person taking early CPP at age 60-64 could contribute the extra contributions or only at age 65.
> 
> From your blog, I believe it is age 65-70.
> 
> The other question is if the opt out provision was used, could a person change their mind later and contribute a "catch up" of contributions.
> 
> From your blog, I didn't get a direct answer on this question...............but the calculations you used showing the years required to break even, for a person contributing both the employer/employee contributions made it a non starter anyways.
> 
> Thanks.


Sags - Thanks for reposting your questions. The "extra contributions" (ie., after taking early CPP) are mandatory up to age 65, and they only become optional from age 65 to age 70. That might not have been clear in my article, as I was really only writing about the over age 65 group.

As for opting out and back in again, it appears from the Income Tax form :http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/clcltng/cpp-rpc/cppchng-eng.html, that there is no retroactivity, each choice is the month following submission of the form to your employer. There does appear to be the option however, to contribute both halves of the contribution if you want to, and in effect turn those earnings into self-employment earnings. The payback then takes twice as long however, and as you suggest may not be a viable option for many.


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## RedRose

*Dogger,* I will certainly post or email you the reduced amount of the combined CPP, I am expecting a $150 drop as you suggested. I am not 65 until December so a wee bit of a wait.

*Sags,* I received a letter from work stating that if I continue contributing to CPP no form to be completed. 
If I opt out a CRA form, but they do add that I can opt back in, but only once per year.


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## Dogger1953

RedRose - I could try to give you a more accurate estimate than a $150 decrease if you wanted. If so, what I would need to know is:
- when your survivor's benefit started, and the initial amount;
- when your retirement started, and the initial amount;
- your current combined benefit amount, and the split between survivor's and retirement amount


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## sags

Thanks RedRose..............

After reading Dogger's blog..............it looks like the payback doesn't add up to much.

Dogger.............is it possible to give an example where the extra CPP may be optimal?

For example............someone with no other income................a high earner.............a low earner..............??

As I understand your blog article, the maximum that a person can gain is maybe 25 a month...........hardly worth the effort.

Maybe I misunderstand though.


----------



## Dogger1953

sags said:


> Thanks RedRose..............
> 
> After reading Dogger's blog..............it looks like the payback doesn't add up to much.
> 
> Dogger.............is it possible to give an example where the extra CPP may be optimal?
> 
> For example............someone with no other income................a high earner.............a low earner..............??
> 
> As I understand your blog article, the maximum that a person can gain is maybe 25 a month...........hardly worth the effort.
> 
> Maybe I misunderstand though.


Sags - My goal is not really to convince anyone to make the voluntary contributions after age 65. It's mostly that I'd like them to do so (or not) with an accurate understanding of what they'll receive for their money. Having said that, I do think the PRB payback is pretty good for an employee (not so much for the self-employed), and I do think it's generally a good investment (minimum return of approx. 13% per year, indexed, for life); although nobody's going to get rich from their PRBs.

Having said that, there are two situations where the payback is even better than usual, and that's for a low wage earner or for someone nearing age 70. 

For the low wage earner, it's a better payback because you don't contribute on the first $3,500 of income (the YBE), so they're in effect paying much less than 4.95% of their overall earnings. For example, if someone earned $3,501 their total CPP contribution would be $0.05 for the year and their PRB the following year would be about $1.75/month or $21.00/year. A pretty good return on a 5 cent investment?

For someone nearing age 70, their PRB would be increased by 42% (60 mths x 0.7%), so their max contribution of $2,356 would buy them a monthly PRB of approx $35.50 ($25 x 142%) or approx. $426/year (a return of about 18% per year, indexed, for life). Again, a pretty good ROI in my opinion?

Does this make it sound any better? Again, for self-employed the returns are only half as good because the contribution cost is double.


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## deejaj

*10/40ths rule*

Hi. Could you explain the rule of "10/40ths of the max CPP payout at age 65"? Thanks.


----------



## Dogger1953

deejaj said:


> Hi. Could you explain the rule of "10/40ths of the max CPP payout at age 65"? Thanks.


deejaj - I'm not 100% sure what "rule" you're referring to, but when the general dropout was 15% it basically worked out to where each year of max contributions was worth 1/40th of a max CPP retirement pension at age 65. That is because your contributory period would have been 47 years (from age 18 to age 65) and you would have dropped out basically 7 yrs (15% of 47 years = 7.05 years or 85 months).

If this is the rule that you are thinking about, it has currently changed to the 1/39.5ths rule and will be changing again in 2014 to the 1/39ths rule, as the dropout is currently 16% and will be 17% next year.

Does this help at all?


----------



## CapitalOne

*CPP and Social Security*

Dogger,

Thanks for doing this.

We worked for 3 years in the US and contributed to Social Security. So, we have a 3-year hole in our CPP contributions and our length of SS contributions is below the threshold for receiving anything at 65. I know there is a treaty between the US and Canada on this, but I'm having trouble understanding how it works. Will call Service Canada when I have some time, but I was hoping you could explain it before I called.

Thanks


----------



## Dogger1953

CapitalOne said:


> Dogger,
> 
> Thanks for doing this.
> 
> We worked for 3 years in the US and contributed to Social Security. So, we have a 3-year hole in our CPP contributions and our length of SS contributions is below the threshold for receiving anything at 65. I know there is a treaty between the US and Canada on this, but I'm having trouble understanding how it works. Will call Service Canada when I have some time, but I was hoping you could explain it before I called.
> 
> Thanks


CapitalOne - The agreement is intended to deal with situations exactly like yours, whereby you have contributed to both countries but where you don't have enough contributions to at least one of the countries to qualify for benefits. In your case, you won't need the agreement to qualify for a CPP retirement pension (as the minimum is 1 year of contributions), but it might help you qualify for benefits from the U.S. I won't pretend to be an expert on either the agreement or the U.S. requirements, but it's my understanding that you need 40 quarters of coverage under the U.S. plan to qualify, and it sounds like you might have 12 quarters at the most. Under the agreement, each year of contributions to CPP can count as four quarters in allowing you to meet the minimum 40 quarter threshold to qualify for a U.S. benefit, although the amount of your benefit will be based solely on your 3 years of U.S. contributions.

There may be some other restrictions in the agreement that I'm not aware of, so here is a Service Canada link that gives a lot more information: http://www.servicecanada.gc.ca/eng/isp/ibfa/countries/overview/usa.shtml


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## fraser

When do the PRB's kick in?

I am on CPP now-took it at age 60. I will be receiving monies this year, and for the following two years, that will be subject to CPP. Do I wait until age 65-in four years, to get the cumulative PRB's? Do they commence at an earlier date and are they adjusted at some point each year to reflect the previous year's contributions?
Thanks


----------



## Dogger1953

fraser said:


> When do the PRB's kick in?
> 
> I am on CPP now-took it at age 60. I will be receiving monies this year, and for the following two years, that will be subject to CPP. Do I wait until age 65-in four years, to get the cumulative PRB's? Do they commence at an earlier date and are they adjusted at some point each year to reflect the previous year's contributions?
> Thanks


PRBs are payable effective January of the year following the contribution. That means that the PRB for your 2013 contribution will be effective January 2014, although you won't get your first such PRB until your 2013 tax return is processed and the contribution is confirmed by Revenue Canada and communicated to Service Canada (probably around April or May 2014), but payment will be retroactive to January.

Service Canada had originally implied that the PRBs would be issued separately, but from the cases that I've seen this year (based on 2012 contributions), it appears that they are included with your regular CPP retirement pension cheque/deposit.


----------



## fraser

Thanks Dogger. So, is this all 'automatic' once my T4 is processed, ie I do not have to do anything but wait until the CPP folks catch up to it? No pesky forms to fill out etc? I am impressed.

I have to say that I have had occasion to call CPP. The service has always been very good. The wait time was minimal and the CSR was very pleasant, business like, and helpful. I have found this to be the case on other Service Canada inquiries as well.


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## Dogger1953

fraser said:


> Thanks Dogger. So, is this all 'automatic' once my T4 is processed, ie I do not have to do anything but wait until the CPP folks catch up to it? No pesky forms to fill out etc? I am impressed.
> 
> I have to say that I have had occasion to call CPP. The service has always been very good. The wait time was minimal and the CSR was very pleasant, business like, and helpful. I have found this to be the case on other Service Canada inquiries as well.


fraser - You're welcome. Yup, the PRBs are fully automatic! Then again, Service Canada sometimes struggles with updating the calculation of your regular retirement benefit, especially if you worked in the year that your pension started or in the immediately prior year. I don't know if you noticed this other thread that I started: http://canadianmoneyforum.com/showthread.php/15683-Are-you-receiving-as-much-CPP-as-you-should-be

I agree that the Service Canada staff are very pleasant and helpful. I can't agree that it's always easy to get through though!


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## hummer.49

*CPP - Disability question*

I am currently 58 years old and receiving CPP disability benefits. I can retire anytime on a DB pension plan with 60%.
Will I lose my Disability Pension once my company pension kicks in?


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## Dogger1953

hummer.49 said:


> I am currently 58 years old and receiving CPP disability benefits. I can retire anytime on a DB pension plan with 60%.
> Will I lose my Disability Pension once my company pension kicks in?


Hummer - Your CPP disability pension won't be affected by any decision that you make on your company pension. It will only stop if/when you are no longer disabled or when you turn age 65, at which time it will convert to a retirement pension.


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## birdman

Hi Dogger and thank you for your informative posts on the site. I have one that I have thought about for years and just haven't persued it. Unfortunately we lost our son to cancer in 1996 just before he was 19yrs old. He did manage to finish high school and moved to Vancouver to be with a special friend and worked at a lower paying job for a short time before his health failed. Can't recal how long he worked for (it was his first job) but perhaps only 6 mos or so. I can't recal exactly what happened after he left us that as things were, as expected, a blur. He had no assets (or liabilities) to speak of and there was not really any estate. Sometime later I seem to recal either calling CPP or submitting a death claim but was declined. I never persued it but thought I would bounce it off you to see if some death benefit should have been paid?. I'm sure he was paying into CPP for the short time he worked and in reviewing the matter on the CPP web site it seems a payment perhaps should have been made. Thank you in advance for any comments you may have.
frase


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## Dogger1953

frase - I'm sorry to confirm that your son couldn't possibly be eligible for a CPP death benefit. The minimum qualifying period for any death or survivor benefits is contributions for at least three years. Even if he started contributing right at age 18 (the earliest that he could), he would at best have had two years of contributions. My sympathies for your loss!


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## birdman

Thanks Dogger. Perhaps that was the response I received years ago but couldn't recal and it has always stuck in my mind. The money is not really a big deal but it is nice to have closure.


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## jgueld

Hi ... just read your article on post retirement benefit and have a question.
If I'm over 65, still working, not claiming CPP but still paying CPP then will I not be eligible for the PRB?
The above conditions are true for me, additionally, I have been divorced, so the 39 year payment rule doesn't totally apply, however, I'm also a widower who receives a widower allowance.


----------



## Dogger1953

jgueld said:


> Hi ... just read your article on post retirement benefit and have a question.
> If I'm over 65, still working, not claiming CPP but still paying CPP then will I not be eligible for the PRB?
> The above conditions are true for me, additionally, I have been divorced, so the 39 year payment rule doesn't totally apply, however, I'm also a widower who receives a widower allowance.


jgueld - PRBs are payable on contributions made after you've started receiving your CPP retirement pension. Since you haven't yet started receiving CPP, those contributions will be used in calculating your regular CPP retirement pension.
I'm not exactly sure what 39-year payment rule you're referring to, but if it's that the general dropout means that you use your best 39 years to average your earnings (which is true starting in 2014), being divorced wouldn't change that. Can you clarify what you mean?
If you're receiving a CPP survivor's pension, this really complicates the calculations involved in deciding when to start your CPP retirement pension. Here's a link to an article that I wrote on "combined benefits": http://retirehappy.ca/cpp-survivor-benefits/
I strongly suggest that you get some qualified advice on when to apply for your CPP retirement pension, based on all of the issues that you've addressed (PRBs, divorce and CPP survivor's benefits). I could help, if you email me at [email protected]


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## jgueld

Dogger, thanks for replying. 

"39 year payment rule" refers to "maximum contribution." My CPP Earnings & Contributions shows that I have 28 - CS (credit split) years and (so far) 13 M (maximum pensionable earnings) years for a total of 41 years of contributions.


----------



## Dogger1953

jgueld said:


> Dogger, thanks for replying.
> 
> "39 year payment rule" refers to "maximum contribution." My CPP Earnings & Contributions shows that I have 28 - CS (credit split) years and (so far) 13 M (maximum pensionable earnings) years for a total of 41 years of contributions.


jgueld - The 39-year still applies to you, even with your credit split. What the rule means, is that you count your best 39 years (it's actually 39.5 years for 2013 and doesn't become 39 years until 2014) of earnings when determining your average earnings when calculating your CPP pension. That means that presently you would count your 13 M years and your best 26.5 CS years. Assuming that your CS years used to be M's (before the credit split), they would at worst be 1/2 M's now, meaning that you presently would be eligible for at least 26.25/39.5ths of a maximum retirement pension. If some/all of the CS years are more than 1/2M, your pension will be even higher. Make sense?


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## jgueld

Hi ... makes sense except for the last sentence. I don't see how a CS year can be more than 1/2M, if the year started out as an M year and then split in half then it'll always remain 1/2M. Am I missing something?


----------



## Dogger1953

jgueld said:


> Hi ... makes sense except for the last sentence. I don't see how a CS year can be more than 1/2M, if the year started out as an M year and then split in half then it'll always remain 1/2M. Am I missing something?


You must be assuming that the ex-spouse always has zero income. That may have been the case for you, but sometimes both spouses have an M year before the credit split, in which case both would still have M years after the credit split too.


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## janus10

Hi Dogger, thank you for your offer to help people understand the CPP better. If my common law spouse had two children, and they were born 8 years apart, how many years will the government drop out for her calculation and will it only impact the years in which she was bringing up a child under the age of 7? In other words, you can't have your cake and eat it too if you had your lowest earning years when you retired early and drop THEM off even though you weren't raising children at the time you retired. Correct?


----------



## Dogger1953

janus10 said:


> Hi Dogger, thank you for your offer to help people understand the CPP better. If my common law spouse had two children, and they were born 8 years apart, how many years will the government drop out for her calculation and will it only impact the years in which she was bringing up a child under the age of 7? In other words, you can't have your cake and eat it too if you had your lowest earning years when you retired early and drop THEM off even though you weren't raising children at the time you retired. Correct?


janus10 - Your CL spouse can drop out up to 14 years under the child-rearing dropout (CRDO) provision, but that dropout does only apply to the specific years when her children were under age 7. If she had good earnings during some/all of those years though, they won't be dropped out.

Regardless whether she does or doesn't drop out some or all of those specific 14 years under the CRDO, she will still be able to use the general dropout (used to be 15%, is now 16% and will increase to 17% starting 2014) if she retires early. For example, at age 65, her CPP contributory period would be 47 years (from age 18 to 65). If she does dropout all 14 CRDO years, that would leave her with 33 years for calculation purposes. Under the current general dropout of 16%, she could still drop out her lowest 5.28 years (64 mths), rather than the normal general dropout period of 8.5 years if she doesn't use the CRDO at all.


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## fred123

Is my understanding of the following CPP items correct (just double checking).
1) I retired in 2006, having made the maximum YMPE contribution each year of my 40 years of employment. Since I hit the maximum CPP pension payable, I will not be penalized for delaying CPP until 2014 when I turn 70. Ie, the 15% dropout allowance does not apply and I'll be eligible for the max age 65 pension plus 60 X .7% = 42%. 
2) I turn 70 in June, 2014. I would like to delay CPP pension income until 2015. In Jan 2015 I will apply for CPP retroactive to July 2014. 
Thank you,
Fred


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## Dogger1953

fred123 said:


> Is my understanding of the following CPP items correct (just double checking).
> 1) I retired in 2006, having made the maximum YMPE contribution each year of my 40 years of employment. Since I hit the maximum CPP pension payable, I will not be penalized for delaying CPP until 2014 when I turn 70. Ie, the 15% dropout allowance does not apply and I'll be eligible for the max age 65 pension plus 60 X .7% = 42%.
> 2) I turn 70 in June, 2014. I would like to delay CPP pension income until 2015. In Jan 2015 I will apply for CPP retroactive to July 2014.
> Thank you,
> Fred


Fred - You're 100% correct on your analysis, except for your comment that "the 15% dropout does not apply". The 15% dropout does apply (it will actually increase to 17% starting in 2014), but that's not the only dropout that applies. You will also benefit from the "over 65 dropout", which allows you to drop out those last 5 years, plus 17% of the other 44ish years in your contributory period.

The main thing is, you should indeed receive 142% of the maximum 2014 retirement pension, and you can apply in 2015 with retroactivity.

And Congrats for living in Winnipeg. That was my home base before I moved West!


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## fred123

Seems like the survivor benefit is based on 60% of the maximum. That's what the Services Canada web site shows. I would have expected 60% of 142% of the maximum. Is that correct?
My wife is one year younger than I and her CPP will be approx. $320 at age 70. She is still contributing to CPP, employment income approx. $8000/yr.


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## Dogger1953

fred123 said:


> Seems like the survivor benefit is based on 60% of the maximum. That's what the Services Canada web site shows. I would have expected 60% of 142% of the maximum. Is that correct?
> My wife is one year younger than I and her CPP will be approx. $320 at age 70. She is still contributing to CPP, employment income approx. $8000/yr.


Fred - I'm afraid that I've got a bit of bad news for you on the survivor's benefit. It's 60% of your "calculated retirement pension" which is before any actuarial adjustment for your age (up or down). In your case, that means 60% of the maximum (60% of $1,012.50 = $607.50.

Unfortunately however, since your wife is also eligible for her own CPP retirement pension, there's a further reduction in calculating what's called a "combined benefit". It's a somewhat complex calculation, but in your wife's case the combination will likely mean a reduction of $90 from the $607.50, meaning that after your death she would receive a combined benefit of approx. $837.50 (her own retirement pension of $320 plus a survivor's benefit of $517.50).


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## edarte

*Ramblings*

Just an FYI that Service Canada needs you back. They are not unique in that many companies are losing their most experienced people to retirement but the quality is suffering more in some places than others. For example, my wife called Service Canada about two months ago to ask about OAS benefits. At that time she specifically asked if one could defer receiving it past 65 like you can with CPP -AND SHE WAS TOLD NO – HAD TO TAKE IT AT 65 AT THE LATEST. I know the ability to defer OAS to 70 only started in 2013 but come on?

OK, beside my rant I have a couple of questions. I apologize if it has already been covered but I read all posts and could not see it specifically. Am I right that if I stop working (self employed) at age 64 but defer CPP until age 70 my pension might be reduced due to no contributions past age 64? Does this depend on how many contributory years I had – if I had max contributory years would it not be reduced? I would like to get the extra 42% pension payment at 70 but am starting to doubt the value of benefit if it will be reduced by not contributing past 64.

Also I have been playing around in Excel trying to calc the payback period of deferring CPP while adjusting my investment rate of return and the inflation rate. As my investment return on the earlier payments went up it pushed out the payback period. As inflation went up it made the payback period earlier because of CPP being higher due to indexing). I have now come to the conclusion that I should treat CPP deferral like a derivative in that it offsets the risk of my other investments doing poorly or high inflation – sort of like buying an annuity with my additional CPP contributions. Do you have any thoughts on this?

Sorry for the ramble.


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## Dogger1953

edarte - As far as your CPP pension being reduced if you don't contribute past age 64, it will be a minor reduction if at all. If you do have at least 39 years of max contributions, there would be no impact at all. If you have at least 39 years of good contributions, any reduction would be minimal. The only year that you have to worry about at all is age 64, because the other years from age 65 to 70 can all be dropped out under the over-65 dropout provision. That means that worst-case scenario, your pension would decrease by about 2.5% (1/39th) for having zero earnings at age 64, which is far less than you will gain by deferring.

I agree with you 100% on your assessment of how investment rate and inflation would affect the payback calculations.


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## edarte

Dogger1953 said:


> edarte - As far as your CPP pension being reduced if you don't contribute past age 64, it will be a minor reduction if at all. If you do have at least 39 years of max contributions, there would be no impact at all. If you have at least 39 years of good contributions, any reduction would be minimal. The only year that you have to worry about at all is age 64, because the other years from age 65 to 70 can all be dropped out under the over-65 dropout provision. That means that worst-case scenario, your pension would decrease by about 2.5% (1/39th) for having zero earnings at age 64, which is far less than you will gain by deferring.
> 
> I agree with you 100% on your assessment of how investment rate and inflation would affect the payback calculations.


Thank you so much for your insight and clear answers. Having someone like you to cut through all the complexity is so helpful when making these decisions.


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## dawne

Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


Thank-you for this offer of assistance. 
I'll soon be receiving some CPP death benefits. The death occurred in Oct. 2013, and I'm still waiting for payment. Would I have to claim that on my 2013 income tax because that's when the death occurred and when the payments will be calculated from...? Or will it be forwarded to the yr. of receipt of monies, that being in 2014?
..or maybe this is more a question for CRA...?


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## Dogger1953

dawne - Taxation of the CPP death benefit is a CRA issue, so the best that I can offer is this weblink: 
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/114/dth-eng.html


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## RBull

My significant other is retired as of July 2012. She will be 56 in October. Her most recent statement (Feb 06, 2014 says she would collect $1019.12 at 65, $652.24 at 60, $1447.15 at 70)
29 of the 37 contribution years on the the statement (1983-2011) were at MPE, 2012 was about 90% and the other 7in the earliest years were at very low levels - maybe 25% average.

She currently has a bridged pension to age 65 with CPP. I would like to know an estimate of what benefits would be at ages 60, 65, 70 since the govt. calculator doesn't seem to be accurate with our situation. 

Last year you calculated mine for me and I had originally planned to retire at the end of 2014. I have decided to retire before the end of May this year so will have to adjust my expectations of CPP down slightly I guess. 

Thank you and we appreciate very much any help you can offer.


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## Dogger1953

RBull said:


> My significant other is retired as of July 2012. She will be 56 in October. Her most recent statement (Feb 06, 2014 says she would collect $1019.12 at 65, $652.24 at 60, $1447.15 at 70)
> 29 of the 37 contribution years on the the statement (1983-2011) were at MPE, 2012 was about 90% and the other 7in the earliest years were at very low levels - maybe 25% average.
> 
> She currently has a bridged pension to age 65 with CPP. I would like to know an estimate of what benefits would be at ages 60, 65, 70 since the govt. calculator doesn't seem to be accurate with our situation.
> 
> Last year you calculated mine for me and I had originally planned to retire at the end of 2014. I have decided to retire before the end of May this year so will have to adjust my expectations of CPP down slightly I guess.
> 
> Thank you and we appreciate very much any help you can offer.


RBull - I've stopped doing detailed calculations for free, as I couldn't keep up with the demand. I would be happy to do them for a fee, if you PM me or email me at [email protected].
In general terms, from what you describe I would ballpark her results as $600 at age 60, $850 at age 65 and $1,220 at age 70. These numbers could increase however, if she had any children and they were under age 7 during her low years of earning.


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## RBull

Thanks for the reply Dogger1953. I can understand why you would have to stop!

I think that will suffice for now but I have your email in our CPP file for when we get closer to decision time. 

Thanks again.


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## saskstu

Dogger, I've waded through these many pages and may have missed an answer to this. I've elected to begin CPP when I turn 60 this Sep. I have applied at Service Canada and the first question from them was "how much income tax to withhold?" Had never thought about that and the lady wasn't very helpful. Would this be an individual decision based on other income or is there a stock percentage. I have 39 years of max CPP contributions so will be expecting near the max.

Thanks


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## Dogger1953

saskstu said:


> Dogger, I've waded through these many pages and may have missed an answer to this. I've elected to begin CPP when I turn 60 this Sep. I have applied at Service Canada and the first question from them was "how much income tax to withhold?" Had never thought about that and the lady wasn't very helpful. Would this be an individual decision based on other income or is there a stock percentage. I have 39 years of max CPP contributions so will be expecting near the max.
> 
> Thanks


saskstu - Totally an individual decision as you suggest. It used to be rare for anyone to request tax withhold from CPP and/or OAS, but much more common now.


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## martin15

*expat help*

Hi Dogger 1953,

Just finished reading the thread, thanks for all the good information.

I have other issues I hope you can shed some light on.

I am 47, an expat Canadian who has been out of Canada since 1998, left at age 31.
Several years ago, my mother received a letter from CPP, stating my pension would be a rather paltry $300 or so.
Not surprising, my best producing years have been outside Canada.

So, my questions are:

Is CPP based on your best 10 years of contributions? and would the fact I am still out of Canada continue to hurt that pension
amount, would the amount continue to fall ?

Would I be able to transfer my pension contributions from the other country (Slovakia), or is better to try to collect 
from both countries ?

You mentioned OAS was based on 40 years residence after 18, but that something would be available after 20 years.
Is it safe to assume that amount would be half of what a full 40 resident would get ?

Where should I go to make sure CPP has all the right information ?

Thanks in advance.


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## Dogger1953

martin15 said:


> Hi Dogger 1953,
> 
> Just finished reading the thread, thanks for all the good information.
> 
> I have other issues I hope you can shed some light on.
> 
> I am 47, an expat Canadian who has been out of Canada since 1998, left at age 31.
> Several years ago, my mother received a letter from CPP, stating my pension would be a rather paltry $300 or so.
> Not surprising, my best producing years have been outside Canada.
> 
> So, my questions are:
> 
> Is CPP based on your best 10 years of contributions? and would the fact I am still out of Canada continue to hurt that pension
> amount, would the amount continue to fall ?
> 
> Would I be able to transfer my pension contributions from the other country (Slovakia), or is better to try to collect
> from both countries ?
> 
> You mentioned OAS was based on 40 years residence after 18, but that something would be available after 20 years.
> Is it safe to assume that amount would be half of what a full 40 resident would get ?
> 
> Where should I go to make sure CPP has all the right information ?
> 
> Thanks in advance.


Martin - The CPP retirement pension is based on the best 83% of your contributory period, so if you apply at age 65 it would be based on your best 39 years. Best is defined not in terms of highest actual earnings years, but in terms of highest earnings relative to the YMPE for that year. So if all of your 13 or so years of possible contribution (from age 18 to 31) were at the YMPE level, your CPP at age 65 would be 13/39th of the max CPP, or about $346 in 2014 dollars. If those same 13 years averaged half-max, your CPP at age 65 would be about $173.

The OAS is earned at the rate of 1/40th for each full year of residence in Canada after age 18, so you're absolutely correct that 20 years of residence would translate to half of the full basic amount, or about $275 monthly in 2014 dollars.

To validate your CPP record, try this weblink: http://www.servicecanada.gc.ca/eng/online/mysca_credential.shtml


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## mcu

I am 37 and have only worked on payroll for about 10 years. The remainder I have been running a business which I get a very minimal salary and a dividend at the end of the year. I got a pension report last year and estimated I would earn $350 as pension, which is terrible. I own a few income properties and have been able to support my family off the rents while I enjoy my wife and young kids, which I very much enjoy. If I continue to live off my rents alone, and have no cpp contributions until I retire, what would I be looking at as pension income? Would I get a pension supplement? I am in Quebec.

Am I doing bad for myself by doing it this way? I don't know how long I will own these income properties either so don't want to rely on these alone for my retirement.


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## Dogger1953

mcu said:


> I am 37 and have only worked on payroll for about 10 years. The remainder I have been running a business which I get a very minimal salary and a dividend at the end of the year. I got a pension report last year and estimated I would earn $350 as pension, which is terrible. I own a few income properties and have been able to support my family off the rents while I enjoy my wife and young kids, which I very much enjoy. If I continue to live off my rents alone, and have no cpp contributions until I retire, what would I be looking at as pension income? Would I get a pension supplement? I am in Quebec.
> 
> Am I doing bad for myself by doing it this way? I don't know how long I will own these income properties either so don't want to rely on these alone for my retirement.


mcu - I don't know all of the subtle differences between CPP and the QPP/RRQ, but I think they're similar enough that I can give you a ballpark answer, but you're probably not going to like it. Under the CPP, if you were currently age 37 and your CPP statement showed an estimate of $350 and if you made no further contributions until age 65, your pension amount would decrease to somewhere between $134 and $171. I'm not sure what you mean by pension supplement, as there's no such thing under CPP.


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## mcu

Thanks for the quick reply. I was tAlking about the GIC, but I think that is related to the OAS...right? Wow...$150 won't get me far. So regardless of taxes I pay every year, I won't get anything towards pension unless I get an actual job?


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## Dogger1953

mcu said:


> Thanks for the quick reply. I was tAlking about the GIC, but I think that is related to the OAS...right? Wow...$150 won't get me far. So regardless of taxes I pay every year, I won't get anything towards pension unless I get an actual job?


mcu - The $134-$171 amount is just for your CPP/QPP, and that amount does depend strictly on what you contribute from earnings. Aside from that, you qualify for OAS just based on residing in Canada, and the full basic OAS amount is approx. $550 if you have at least 40 years of residence in Canada, after age 18. Aside from that, there is the GIS (Guaranteed Income Supplement) if you have low income.


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## martin15

Dogger1953 said:


> The OAS is earned at the rate of 1/40th for each full year of residence in Canada after age 18, so you're absolutely correct that 20 years of residence would translate to half of the full basic amount, or about $275 monthly in 2014 dollars.



Dogger, thank you for your answer.
Is it a minimum 20 years residence to be eligible for OAS ?
And can you explain the GIS a bit ?

thanks.






mcu said:


> I am 37 and have only worked on payroll for about 10 years. The remainder I have been running a business which I get a very minimal salary and a dividend at the end of the year.
> Am I doing bad for myself by doing it this way? I don't know how long I will own these income properties either so don't want to rely on these alone for my retirement.


mcu, this is how I have been doing it, paying myself minimum wage, of course minimum taxes and contributions,
and saving / investing the difference.

You would have to sit down and calculate how much would you pay in extra income tax / CPP contributions to raise your salary,
vs. how much your CPP pension payments would be, and of course factor in how long you will live to enjoy them. 

I knew paying myself this way would have an effect down the line, and it's farther down the line now.


When thinking about retirement, I have always tried to calculate things from the point of view of having
nothing from CPP, OAS, or any other public program. 

Anything I would get from them would be just gravy.

It might be an idea for you to try crunching numbers this way, and see how it works out.
The boomers will take all the money from the pension funds anyway.


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## mcu

Any idea what the GIS amount is and what low income I would need to qualify? Do rrsps penalize you in this case?


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## Dogger1953

mcu said:


> Any idea what the GIS amount is and what low income I would need to qualify? Do rrsps penalize you in this case?


mcu - The amount of GIS depends on your marital status and your income. Here is a link to Service Canada that provides these details: http://www.servicecanada.gc.ca/eng/services/pensions/oas/payments/index.shtml

I don't know if penalize is the right word or not, but RRSP withdrawals will count as income and will reduce your GIS amount.


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## fraser

Not a question..but an observation. 

My wife starts CPP at 60 years this month @ $281. month. I added up her total contributions. $3403. Most were made before CPP deductions went up significantly. She only had 5 max. years. She had 7 child rearing years (85-92). Then a little part time.

I started CPP at 60 years 5 months @ $714 month. My total contributions were $32,995. I had 33 max contribution years plus one or two almost max. My last max year, and last year of contributions was 2010.

So, I recognize that I am not taking into account time value of money (a good chunk of my contribution number came in the last 12 years) but if you look at straight
math payback, my spouse got a much better deal. She gets a payback, ignoring time value, in 13 months. My payback, ignoring time value, is a much longer 46 months.

My guess is that if I did time value of money, she is still getting a much better return than I am. Am I missing something?


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## Dogger1953

fraser said:


> Not a question..but an observation.
> 
> My wife starts CPP at 60 years this month @ $281. month. I added up her total contributions. $3403. Most were made before CPP deductions went up significantly. She only had 5 max. years. She had 7 child rearing years (85-92). Then a little part time.
> 
> I started CPP at 60 years 5 months @ $714 month. My total contributions were $32,995. I had 33 max contribution years plus one or two almost max. My last max year, and last year of contributions was 2010.
> 
> So, I recognize that I am not taking into account time value of money (a good chunk of my contribution number came in the last 12 years) but if you look at straight
> math payback, my spouse got a much better deal. She gets a payback, ignoring time value, in 13 months. My payback, ignoring time value, is a much longer 46 months.
> 
> My guess is that if I did time value of money, she is still getting a much better return than I am. Am I missing something?


Ignoring the time value of money, there are 3 or 4 factors that make her payback better than yours:
1) One of the biggest factors that you've already mentioned is the higher contribution rate that began increasing in 1987, reaching the current 4.95% in 2003.
2) The next factor is her lower part-time earnings. Since you don't contribute on earnings up the Year's Basic Exemption, low income earners effectively pay a lower percentage contribution. For instance, someone who earns $7,000 effectively pays only half of the 4.95% rate, since the first $3,500 earnings are free, whereas someone at the YMPE effectively pays about 4.62% on earnings of $52,500 for 2014.
3) Another significant factor is the child-rearing dropout (CRDO). If she had zero earnings during each of those 7 years, she will drop out those 7 years and her earnings will be averaged over 29.05 years (83% of (42-7)), instead of 34.86 years (83% of 42).
4) Finally, if your pension started earlier than 2014, the general dropout was either 15% or 16%. That may not sound like much of a factor, but it could decrease your payback by about 2.5% by averaging your earnings over 35.7 years (85% of 42) instead of 34.86 years (83% of 42).

Everything considered, I'm not surprised by your observation.


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## piano mom

Hello Dogger1953. I was wondering if you would help us determine my husband's CPP benefits. He has worked since 18 years old and has been maxing contributions since 1992 (24 years old). He is planning to retire at age 55 in 2023, maxing his contributions until then. What would his CPP benefits be at age 65? 70? Thanks!


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## Dogger1953

piano mom said:


> Hello Dogger1953. I was wondering if you would help us determine my husband's CPP benefits. He has worked since 18 years old and has been maxing contributions since 1992 (24 years old). He is planning to retire at age 55 in 2023, maxing his contributions until then. What would his CPP benefits be at age 65? 70? Thanks!


Piano Mom - I do actual calculations for a fee, if you email me at [email protected]. If all you want is an estimate, you can total the number of years he has at max (approx. 31 from age 24 to 55) and max equivalents from age 18 to 24 (say each of those 6 years averaged 50% of max, that would be 3 more max equivalents) and divide the total by 39. That would mean that he would be eligible to 34/39ths or 87.2% of a max pension = $905.42 in 2014 dollars (87.2% of the 2014 max of $1,038.33).

If he waited until age 70, he would be eligible for 142% of the age-65 amount, or approx. $1,285.70.


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## piano mom

Ooooops! I didn't know you charge a fee. I think we just need an estimate for now. Will keep your email handy for when retirement closes in. Thanks!


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## Dogger1953

piano mom said:


> Ooooops! I didn't know you charge a fee. I think we just need an estimate for now. Will keep your email handy for when retirement closes in. Thanks!


No problem! I'm happy to help!!


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## fraser

Thanks. I was not aware of item 2.


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## gibor365

Dogger1953, couple of questions:
1. If I go to Service Canada website, "If you were 65 today,
• you could receive a monthly retirement pension of: $450"

Is it calculated considering that I will be getting same salary until age 65? Or I get this amount at age 65 if I stop working now (I'm 47)? If first is correct, how can i know what will my estimate CPP if I retire earlier that 65?

2. Before immigrating to Canada, i worked for 10 years in Israel. Are you aware about any agreement btween Israel and Canada regarding pension? If yes, what should i do?


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## Dogger1953

gibor said:


> Dogger1953, couple of questions:
> 1. If I go to Service Canada website, "If you were 65 today,
> • you could receive a monthly retirement pension of: $450"
> 
> Is it calculated considering that I will be getting same salary until age 65? Or I get this amount at age 65 if I stop working now (I'm 47)? If first is correct, how can i know what will my estimate CPP if I retire earlier that 65?
> 
> 2. Before immigrating to Canada, i worked for 10 years in Israel. Are you aware about any agreement btween Israel and Canada regarding pension? If yes, what should i do?


gibor - I'll answer your second question first, because it's the easiest. There is only a limited pension agreement with Israel, dealing only with contributions. Here is a link with more information: http://www.servicecanada.gc.ca/eng/services/pensions/international/countries/israel.shtml

As to your first question, the Service Canada calculation of $450 "if you were 65 today" pretends that you are eligible immediately, which has the same effect as projecting future earnings until age 65 at your current lifetime average salary (approx. $22,750). That means that if you average earnings of $22,750 for 83% of the next 18 years, your CPP pension at age 65 will remain at $450. If you average more than that, the $450 will increase, and if you average less than that it will decrease.

As to obtaining a better estimate that matches your future plans, Service Canada has a site called the Canadian Retirement Income Calculator, but it has some serious design flaws and I don't recommend using it at all. Service Canada also offers another service if you complete and submit this form: http://www.servicecanada.gc.ca/eforms/forms/sc-isp-1003(2012-01-01)e_cpp.pdf .

Alternately, you can try calculating your own estimates by following the steps in this article that I wrote: http://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/ .

And as a final option, I do calculations for a fee if you email me at [email protected] or visit my website: http://www.drpensions.ca/index.html


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## gibor365

Thank you for explanation, but what 83% coming from in "$22,750 for 83% of the next 18 years, your CPP pension at age 65 will remain at $450."?


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## Dogger1953

gibor said:


> Thank you for explanation, but what 83% coming from in "$22,750 for 83% of the next 18 years, your CPP pension at age 65 will remain at $450."?


gibor - Sorry about the confusion. The 83% comes from being able to drop out 17% of your lowest earnings years when your pension is calculated. Service Canada's would already have dropped out 17% of your years from age 18 to 47 in coming up with their current estimate of $450, so you can still drop out 17% of your remaining years and you therefore only have to maintain the same average earnings for 83% of the time to maintain your pension estimate at $450. It's a small point, but I just wanted to let you know that the 17% dropout is still a factor.


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## janus10

Does anyone know what happens for people who start collecting OAS at 65 but have only been in Canada twenty years? Do they always get half of the max or does it go up for each additional year they collect while in Canada so that at 85 they are at the max payment rate?


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## Dogger1953

janus10 said:


> Does anyone know what happens for people who start collecting OAS at 65 but have only been in Canada twenty years? Do they always get half of the max or does it go up for each additional year they collect while in Canada so that at 85 they are at the max payment rate?


janus - Once someone starts receiving OAS, they are "locked in" at whatever partial rate they have, so if they were approved at 20/40ths they will receive that rate for life (subject to the quarterly cost-of-living increases).


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## fraser

My wife is scheduled to get her first CPP payment at the end of this month.

Three weeks ago we went to the Service Canada office to drop of the forms to have our pensions split and some tax deducted. We were advised that it could take up to three months to process.

Checked our Service Canada accounts last night. The paperwork was processed and we were able to see our respective revised CPP amounts on line. Impressed with the good service. It mirrors the service levels that we have received on the two occasions that we have made telephone inquiries.


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## Dogger1953

fraser said:


> My wife is scheduled to get her first CPP payment at the end of this month.
> 
> Three weeks ago we went to the Service Canada office to drop of the forms to have our pensions split and some tax deducted. We were advised that it could take up to three months to process.
> 
> Checked our Service Canada accounts last night. The paperwork was processed and we were able to see our respective revised CPP amounts on line. Impressed with the good service. It mirrors the service levels that we have received on the two occasions that we have made telephone inquiries.


fraser - Glad to hear that you've had very positive experiences with Service Canada concerning your CPP. It doesn't always go that way, but it's nice to hear the positive feedback and not just the negative.


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## gaspr

Hi Doug
Thanks so much for providing a source of accurate info about Canadian pensions. I noticed that when you do your breakeven points for when one pension scenario overtakes another, that you use "constant dollars". I really do like this as it makes the results more meaningful. Having said that, have you considered adding a "time value" to the results? On my own spreadsheets for OAS for example, I added a real rate of return of 2.5%. This pushed out the breakeven points out as much as six more years. I am assuming that using a higher rate of return would affect the results even more. This would be pretty much meaningless for someone who intends to spend the money as it comes in. For those who don't however, it seems like a significant difference.

Would appreciate hearing your thoughts on this.


----------



## Dogger1953

gaspr said:


> Hi Doug
> Thanks so much for providing a source of accurate info about Canadian pensions. I noticed that when you do your breakeven points for when one pension scenario overtakes another, that you use "constant dollars". I really do like this as it makes the results more meaningful. Having said that, have you considered adding a "time value" to the results? On my own spreadsheets for OAS for example, I added a real rate of return of 2.5%. This pushed out the breakeven points out as much as six more years. I am assuming that using a higher rate of return would affect the results even more. This would be pretty much meaningless for someone who intends to spend the money as it comes in. For those who don't however, it seems like a significant difference.
> 
> Would appreciate hearing your thoughts on this.


gaspr - You certainly raise a valid point, but if you're going to consider a rate of return you may want to add inflation estimates also. This is probably practical if you're looking at plans for one individual (as they can determine what they consider acceptable values to use). When posting general breakeven results though, I personally feel ignoring them is probably preferable. There are probably others who feel differently however, but I don't think there's a single right answer.


----------



## gaspr

But "real" rates of return are already discounted for inflation. Therefore inflation can be ignored in this comparison. 

Thanks again.


----------



## bariutt

My friend is 61 and is currently collecting approximately $1200 per month on a CPP disability pension. Will his pension be reduced when he turns 65.


----------



## Parkuser

*CPP sharing*

Hi Dogger. I have just retired at 65 and received my first CPP cheque. I’ve applied for 50/50 CPP sharing with my wife. We had been married long before we’ve immigrated to Canada. She is almost my age but has no CPP credits. The total looks OK, but the split is only 40/60. I would assume that being married for the whole contribution period should qualify us for an equal split. Apparently this is only true after a divorce. I cannot find explanation anywhere, the CPP officer on the phone was not helpful. Should I ask for a reconsideration? Thanks in advance for your advice. Parkuser


----------



## Daniel A.

bariutt said:


> My friend is 61 and is currently collecting approximately $1200 per month on a CPP disability pension. Will his pension be reduced when he turns 65.


Yes but he may collect GIS depending on yearly income.


----------



## lb71

Hi Doug,

My parents are both receiving CPP pensions, on top of other income. Am I correct in my understanding that both recipients must split their CPP if the split is to occur? ie, you cannot just split one?

Thanks


----------



## pwm

I'll take this one, as no one else has replied. Yes, both parties have to split. If both have the same pension benefits there would be no effect from splitting as each would give 50% to the other.


----------



## lb71

That's how I read the forms. I was hoping there was someway around it. My dad's CPP is maxed, while my mom's is much lower. There's still some benefit to splitting, but there would have been more if just he could have split it.

Thanks


----------



## cwrea

pwm said:


> I'll take this one, as no one else has replied. Yes, both parties have to split. *If both have the same pension benefits there would be no effect from splitting as each would give 50% to the other*.


Hmm... regarding the part I've emphasized above: What I've read here at Service Canada says _"The portion of your pension that can be shared is based on *the number of months* you and your spouse or common-law partner lived together during your joint contributory period."_ [emphasis there is mine]

I'm wondering how to interpret "the number of months." Do they simply mean a ratio is applied after-the-fact to the retirement pension amounts figured normally and separately for each individual, and half of that portion flows each way? Or, do they mean that the pensionable earnings history _during_ those number of months comes into play?

Consider a case e.g. a working woman who earned well (i.e. in excess of YMPE) from ages, say, 18-38, then marries and has children and leaves the workforce permanently (i.e. no earnings after cohabitation.) Meanwhile, her husband continues to work after marriage. Let's say he started working late and then experienced some no/low earnings years, to the point where his retirement pension is about the same as his wife's. i.e. her 20 great (maxed out) earning years vs. his, say, 40 so-so earnings years resulted in the same retirement pension.

In that example, would CPP income sharing end up a wash as you suggest, because it is simply half of a ratio applied to each of the retirement pensions already calculated? Or, would income sharing mean 50% of some greater-than-zero part of the husband's retirement pension would go to the wife (50% of the part attributed, somehow, to the earnings during the months of cohabitation), while he'd get 50% of _nothing_ from hers, because she had $0 earnings history during cohabitation?

(Edited to add: I'm thinking the more complicated way I suggested above, which looks at the actual earnings history during the cohabitation period, would be similar to what might happen upon divorce? Although in a marriage breakdown situation, I expect the credits themselves could be split well before any retirement pension has started.)

Regards,

Chris W. Rea


----------



## pwm

Good question cwrea. Looks like we need an answer from Dogger on this one.


----------



## gaspr

Looks like our CPP expert is MIA...hope he is not unwell...


----------



## Dogger1953

gaspr said:


> Looks like our CPP expert is MIA...hope he is not unwell...


gaspr - Just got back from a week's holiday in Cuba. Should get caught up on the backlog of work today. It's nice to feel missed!


----------



## Dogger1953

bariutt said:


> My friend is 61 and is currently collecting approximately $1200 per month on a CPP disability pension. Will his pension be reduced when he turns 65.


bariutt - As Daniel already said, your friend's CPP disability pension ends at age 65 and it will be converted to a retirement pension, which is always less. 

The easiest way to estimate the retirement pension amount is to subtract the disability flat-rate portion (($457.60 for 2014) and divide the result by 75%. In your friend's case, that means that he will receive a retirement pension of approximately $990.00 ($1,200 - $457.60 = $742.40 / 75% = $989.87).

As Daniel also alluded to, some or all of this reduction in CPP may be offset if your friend is eligible for OAS and/or GIS at age 65.


----------



## Dogger1953

Parkuser said:


> Hi Dogger. I have just retired at 65 and received my first CPP cheque. I’ve applied for 50/50 CPP sharing with my wife. We had been married long before we’ve immigrated to Canada. She is almost my age but has no CPP credits. The total looks OK, but the split is only 40/60. I would assume that being married for the whole contribution period should qualify us for an equal split. Apparently this is only true after a divorce. I cannot find explanation anywhere, the CPP officer on the phone was not helpful. Should I ask for a reconsideration? Thanks in advance for your advice. Parkuser


Parkuser - The CPP sharing that you're referring to in an ongoing relationship is officially called "Assignment of pensions", versus the credit splitting (aka Division of Unadjusted Pensionable Earnings or DUPE) that can occur after a separation or divorce. They both operate very differently. 

In your case, the assignment of pensions should result in you transferring 50% of your retirement pension to your wife, but subject to the ratio that "the number of months in the period of your cohabitation bears to the number of months in your joint contributory period". Your joint contributory period started in January 1966 or when you reached age 18, even though you may not have been in Canada at that time. Even though you say that you were married for every year that you actually contributed to CPP, the result of an assignment would not be a 50/50 split unless you have lived together since age 18 (regardless whether you were in Canada or not).

For instance, if you started living together at age 28 and started your CPP at age 65, the assignment would transfer 50% of 37/47ths or about 39% to your wife. Is that about right for your situation?


----------



## Dogger1953

lb71 said:


> Hi Doug,
> 
> My parents are both receiving CPP pensions, on top of other income. Am I correct in my understanding that both recipients must split their CPP if the split is to occur? ie, you cannot just split one?
> 
> Thanks


lb71 - You are correct that both recipients must split their CPP, regardless whether you're talking about the "assignment of pensions" for ongoing relationships or the "credit split" after separation or divorce.


----------



## Dogger1953

cwrea said:


> Hmm... regarding the part I've emphasized above: What I've read here at Service Canada says _"The portion of your pension that can be shared is based on *the number of months* you and your spouse or common-law partner lived together during your joint contributory period."_ [emphasis there is mine]
> 
> I'm wondering how to interpret "the number of months." Do they simply mean a ratio is applied after-the-fact to the retirement pension amounts figured normally and separately for each individual, and half of that portion flows each way? Or, do they mean that the pensionable earnings history _during_ those number of months comes into play?
> 
> Consider a case e.g. a working woman who earned well (i.e. in excess of YMPE) from ages, say, 18-38, then marries and has children and leaves the workforce permanently (i.e. no earnings after cohabitation.) Meanwhile, her husband continues to work after marriage. Let's say he started working late and then experienced some no/low earnings years, to the point where his retirement pension is about the same as his wife's. i.e. her 20 great (maxed out) earning years vs. his, say, 40 so-so earnings years resulted in the same retirement pension.
> 
> In that example, would CPP income sharing end up a wash as you suggest, because it is simply half of a ratio applied to each of the retirement pensions already calculated? Or, would income sharing mean 50% of some greater-than-zero part of the husband's retirement pension would go to the wife (50% of the part attributed, somehow, to the earnings during the months of cohabitation), while he'd get 50% of _nothing_ from hers, because she had $0 earnings history during cohabitation?
> 
> (Edited to add: I'm thinking the more complicated way I suggested above, which looks at the actual earnings history during the cohabitation period, would be similar to what might happen upon divorce? Although in a marriage breakdown situation, I expect the credits themselves could be split well before any retirement pension has started.)
> 
> Regards,
> 
> Chris W. Rea


Chris - I don't know whether my responses to other questions will have already answered your question, but for ongoing relationships (called assignment of pensions), the formula is a simple 50% of the ratio that the period of the cohabitation bears to the joint contributory period, with no consideration as to when the earnings actually occurred. The result is always a wash as to the net amount of pension available, but it isn't always a 50/50 split.

For "credit-splitting", which occurs after separation or divorce, the pensionable earnings are shared 50/50 for every year in the joint contributory period, but the effect is often a net loss of pension benefits in the scenario that you describe. I've written about this extensively, in what I describe as the DUPE/CRDO overlap situation.


----------



## Parkuser

Dogger1953 said:


> Parkuser - The CPP sharing that you're referring to in an ongoing relationship is officially called "Assignment of pensions", versus the credit splitting (aka Division of Unadjusted Pensionable Earnings or DUPE) that can occur after a separation or divorce. They both operate very differently.
> 
> In your case, the assignment of pensions should result in you transferring 50% of your retirement pension to your wife, but subject to the ratio that "the number of months in the period of your cohabitation bears to the number of months in your joint contributory period". Your joint contributory period started in January 1966 or when you reached age 18, even though you may not have been in Canada at that time. Even though you say that you were married for every year that you actually contributed to CPP, the result of an assignment would not be a 50/50 split unless you have lived together since age 18 (regardless whether you were in Canada or not).
> 
> For instance, if you started living together at age 28 and started your CPP at age 65, the assignment would transfer 50% of 37/47ths or about 39% to your wife. Is that about right for your situation?


Dogger, thank you very much for your explanation. Now I understand how the split was calculated. And yes, we were married at 28.

Parkuser


----------



## cwrea

Dogger1953 said:


> Chris - I don't know whether my responses to other questions will have already answered your question, but for ongoing relationships (called assignment of pensions), the formula is a simple 50% of the ratio that the period of the cohabitation bears to the joint contributory period, with no consideration as to when the earnings actually occurred. The result is always a wash as to the net amount of pension available, but it isn't always a 50/50 split.
> 
> For "credit-splitting", which occurs after separation or divorce, the pensionable earnings are shared 50/50 for every year in the joint contributory period, but the effect is often a net loss of pension benefits in the scenario that you describe. I've written about this extensively, in what I describe as the DUPE/CRDO overlap situation.


Both replies were very helpful in clarifying. Thank you!


----------



## jmarks

Dogger1953 said:


> gaspr - Just got back from a week's holiday in Cuba. Should get caught up on the backlog of work today. It's nice to feel missed!


Welcome back Dogger, hope you had a great time in Cuba!
This whole DUPE divorce issue has my head spinning. I've been divorced twice, one in 1984 with two kids of marriage. That wife left the country immediately afterwards to become an American citizen. The second marriage ended in 1997 (7 years together) she had kids but none of the marriage, she also made max. Contributions while together. 
I've read some the articles on your site and must admit i find the subject complex. 
I'm guessing my first wife will not impact me as she is American? How does the second and third wives impact me? Does the second wife have to apply for credit splitting or does it happen automatically?
If i apply for CPP first and get x$ can she apply later and ask to have credits split, leaving me waiting for a reduction in my cpp cheque? I spoke with a SC rep. who basically told me she didn't know and that it shouldn't change my cpp. But I'm getting the feeling thats not the case! I haven't spoken to the second x since we divorced so have no idea if she will apply for credit splitting while we were together. Sounds like something i should know, right?
My current wife and i have been together for 14 years (max earnings) how would i figure the amount we can split, considering two previous marriages?
Hope this makes some sense, as I'm somewhat confused. 

P.S. Im 56 and made max contributions since i was 18 and plan on drawing age 60, oh yea i'm going to retire next year.
P.P.S. I've sent SC an Estimate request where i only put my first wife's information as there was no place for second wife information. Do you think this will result in accurate data?

Thank You


----------



## Dogger1953

jmarks said:


> Welcome back Dogger, hope you had a great time in Cuba!
> This whole DUPE divorce issue has my head spinning. I've been divorced twice, one in 1984 with two kids of marriage. That wife left the country immediately afterwards to become an American citizen. The second marriage ended in 1997 (7 years together) she had kids but none of the marriage, she also made max. Contributions while together.
> I've read some the articles on your site and must admit i find the subject complex.
> I'm guessing my first wife will not impact me as she is American? How does the second and third wives impact me? Does the second wife have to apply for credit splitting or does it happen automatically?
> If i apply for CPP first and get x$ can she apply later and ask to have credits split, leaving me waiting for a reduction in my cpp cheque? I spoke with a SC rep. who basically told me she didn't know and that it shouldn't change my cpp. But I'm getting the feeling thats not the case! I haven't spoken to the second x since we divorced so have no idea if she will apply for credit splitting while we were together. Sounds like something i should know, right?
> My current wife and i have been together for 14 years (max earnings) how would i figure the amount we can split, considering two previous marriages?
> Hope this makes some sense, as I'm somewhat confused.
> 
> P.S. Im 56 and made max contributions since i was 18 and plan on drawing age 60, oh yea i'm going to retire next year.
> P.P.S. I've sent SC an Estimate request where i only put my first wife's information as there was no place for second wife information. Do you think this will result in accurate data?
> 
> Thank You


jmarks - I think you're safe as far as credit splits are concerned for the first two marriages. Credit Splitting for marriages ending in divorce prior to Jan 1, 1987 were subject to application within 3 years, so unless you agree to waive that limitation it's too late for your first wife. Your second wife could apply for a credit split, but if you both had max earnings for every year that you were together, the credit split would have absolutely no impact to either of you. 

You don't have to worry about a credit split from your 3rd marriage unless it ends in separation or divorce, and again there would be no impact if you both had max earnings for every year that you've been together. Once both you and your current wife are over age 60 and both receiving your CPP retirement pensions, you can apply for "pension sharing" (aka Assignment of pensions) if you want. The amount that's shared (not split, as it's just temporary) will depend on the amount of time that you've lived together in comparison to your "joint contributory period", so approx. 18/42nds by the time you're age 60.

To answer your P.P.S., there should be no impact to your CPP estimate for the 1st marriage (unless she applies and you agree to waive the time limit), so if you have contributed max from age 18 to age 57 and you apply at age 60, your estimate should be 64% of the max pension (64% of the current max of $1,038.33 = $664.53).


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## jmarks

Thank You Dogger. 
There will be no more divorces !! My wife and I have a pact that if things happen that one of us will just disappear lol

The lady I spoke with at S.C. gave me pretty much the same number $658 the other day so I'm feeling quite good about it now that I've heard from you regarding the DUPE ! 

Have you discussed pension sharing in this forum or your site? I don't recall it and wonder why it is temporary? My wife will be 61 when she retires and I'll be 57. Yes I know that sounds backwards, but she wants to keep working and I don' THINK I want to  

Thanks again for your efforts, they are appreciated.


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## Dogger1953

jmarks said:


> Thank You Dogger.
> There will be no more divorces !! My wife and I have a pact that if things happen that one of us will just disappear lol
> 
> The lady I spoke with at S.C. gave me pretty much the same number $658 the other day so I'm feeling quite good about it now that I've heard from you regarding the DUPE !
> 
> Have you discussed pension sharing in this forum or your site? I don't recall it and wonder why it is temporary? My wife will be 61 when she retires and I'll be 57. Yes I know that sounds backwards, but she wants to keep working and I don' THINK I want to
> 
> Thanks again for your efforts, they are appreciated.


jmarks - I haven't talked much about pension sharing (Assignment of pensions) very much in this forum or on my website, as it's really just a tax-savings thing (shifting some pension from the higher CPP spouse to the lower CPP spouse without changing the total amount of CPP payable). I called it temporary, as it can end any time you want it to or it will end automatically if you divorce or when one of you dies (unlike credit splitting which is permanent once it occurs, with very limited exceptions).

Here is a Service Canada link with more information on pension sharing: http://www.servicecanada.gc.ca/eng/services/pensions/cpp/retirement/sharing.shtml


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## Itchy54

Bumping to address questions in another money topic...


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## gibor365

_therefore only have to maintain the same average earnings for 83% of the time to maintain your pension estimate at $450_ Looks like CPP calculator on service canada official website give very wrong calculations.... when I got to "Changing your Future Earnings" page and entered that from today until age 65 my earning will be 0, calculator gave me same $450  , but when I entered that I will be working 1 more year (until 48) and than my income will be always 0 -> I got "Based on your revised future earnings, your recalculated CPP retirement pension estimate at 65 is $747 per month" !! Also I got same $747 when I entered that I will have same earnings until 65!
What a shame! Only government organizations can give completely wrong information


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## fraser

There is a huge difference between CPP and typical DB plans. 

CPP combines DB plans with a host of social programs that are simply not present in DB plans. Additionally, CPP had a start date for benefits when it first came into existence, regardless of the fact than many who got it had not paid in. This is not a criticism, just one example of how it differs from a traditional DB plan. If you look at CPP from a straight DB plan and ROI perspective it may not be the greatest and is probably not as good as most DB plans. That is the price we pay for the social program aspects of CPP.

It is hard to argue that CPP should pay more because their investments are doing well. Five years from now we could be back to a 2008 situation....would we want to see CPP cut back because the returns at the time could be negative?

When I took CPP I had a challenge in terms of when to take it. There was very little public discussion pertaining to people who wanted to take it at age 60/61 and did not have the minimum number of max. contribution years. Not unusual for people today who have taken time off for education or travel. In my case, would have been penalized for not taking CPP early had I waited until age 65 because four of five more years of zero earned income would have brought my average pensionable earnings as it were down. It took about six different articles before the impact of these non earning years were explained in a way that I could understand.


----------



## Markusos

*How do I calc GIS if I get a partial OAS payment*

This is my first post on this forum, so, firstly, I am thankful to find this forum and thank you to anyone who 
provides advice or help. I've visited forums of different types and find them to be wonderful. Again, thank you everyone - up front.

My first question (more later I hope) is about the GIS.

I will NOT receive a full OAS pension because I have lived in S. Korea for 15 years. I do plan to come back home in a couple of years before I retire. I will get about 30 years/40 years of residence in Canada, after my 18th birthday. So, I'm trying to figure out the GIS I could get.

I have a LIF but I'm just trying (for now) to calculate the GIS based ONLY on my CPP - as though that were my only income. I know that is not realistic, but, I would just like to know how to calculate it. I can do the actual later, when I decide how much I can afford to take out of my LIF each year. I realize that adding dollars from my LIF will increase my income and thereby decrease the GIS. 

So, I did some research on the Gov webpages regarding OAS and GIS but I am confused. 
There are income tables to select from based on marital status, etc, so, I seem to match Table 3 which is for "individ. receiving 'full' OAS whose spouse doese NOT receive OAS".
The table (when it opens, after entering the income amount) has 2 columns. The first column is labelled 'Monthly GIS with Maximum OAS Pension' and the second column is labelled, 'Combined Monthly OAS Pension and GIS'. 

I am confused because of the wording of Table 3 being, "Amounts for individuals receiving a *full* Old Age Security pension whose spouse or common-law partner does not receive an OAS pension". So, is this also the table to use if you are NOT receiving the 'full' OAS pension. Could I assume that my GIS would be the difference between my OAS benefit and the amount in the second column, which is labelled, "Combined Monthly OAS Pension and GIS". 

I hope I don't seem to sounding anal, but, the wording seems odd. And, on the previous page to the Tables, it states in an information box at the bottom:

"If you are receiving a partial Old Age Security (OAS) pension, you should contact us for more information about your OAS pension, Guaranteed Income Supplement or Allowance payment amounts."

I hope this is clear, thanks.


----------



## Markusos

*first post and question about GIS*

Hi All,

This is my first post. I wonder about the GIS amount.

I will get only a partial OAS since I lived outside Canada for some years. I think I will have about 30 years out of the 40 years after age 18, when I return to Canada to finally retire in a couple of years from now.

So, is this the page, with the tables, that I could use for a rough estimate of the my GIS.
the reason I ask is because the tables say they are "individuals receiving a FULL OAS pension", which, again, I will not be getting. Yet the tables seem to have a column that seems to be those receiving a partial pension - or maybe I'm wrong assuming something.

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

Thanks for the help!


----------



## Big bamboo

*Need info on CPP*



Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


I am a widower of 64 years of age and have wondered aloud why I can only get a portion of my deceased wife's earned CPP. Can you tell me the rational for withholding Survivor's CPP when they have paid in the max and who gave the OK to take some away. That money is our money as the govt did not put in a dime so why are they unilaterally withholding what my deceased spouse should be getting and therefore should be available to myself as the surviving spouse. My cost of living is no different that if she had survived and I need the funds to help cover my own living expenses.

I hope you or the other readers can shed some light on this important issue??


----------



## Blush

*CPP at 60 or65.*



Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


My friend turns 60 in October and plans to apply for CPP. She has to work til 65 ($60,000 salary) and has no other source of income, no pension plan, just some rrsps for past 20 yrs. She is single so no spousal income. Should she apply or wait till 65? Any info u can offer is appreciated. Tks


----------



## Dogger1953

Blush said:


> My friend turns 60 in October and plans to apply for CPP. She has to work til 65 ($60,000 salary) and has no other source of income, no pension plan, just some rrsps for past 20 yrs. She is single so no spousal income. Should she apply or wait till 65? Any info u can offer is appreciated. Tks


Blush - I'd prefer to see your friend's entire CPP record of earnings and do some calculations for her to give a more precise response. Some of the issues that she needs to consider though are:
- If she already has 39 years of max earnings, any additional contributions won't increase her calculated retirement pension at all if she waits until age 65, but they would earn her post-retirement benefits if she takes it early, swinging the decision more in favour of taking it early;
- If she doesn't already have 39 years of max earnings, her additional max earnings until age 65 will increase her calculated retirement pension so that she will not only get 100% at age 65, but it will be 100% of a larger amount, swinging the decision more in favour of waiting;
- If she thinks that she will qualify for GIS at age 65, this swings the decision more in favour of taking it early, OR waiting until age 70
- If she has reason to believe that she might live longer than average, this swings the decision more in favour of waiting until age 65 (or later?)

If you want me to do some accurate calculations to help her in her decision, email me at [email protected]


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## gibor365

Dogger, could you please telling about OAS/CPP rules.... If at retirement age I will be leaving half-year in Canada and other half outside of Canada, would I get full CPP/OAS?
Same question if I move to Israel for good?


----------



## Dogger1953

gibor said:


> Dogger, could you please telling about OAS/CPP rules.... If at retirement age I will be leaving half-year in Canada and other half outside of Canada, would I get full CPP/OAS?
> Same question if I move to Israel for good?


CPP is payable anywhere in the world with no restrictions on residence in Canada.

OAS is the same if you have at least 20 years of residence in Canada after turning age 18, otherwise you must continue to reside in Canada but temporary absences up to six months are allowed. Regardless where you live, the "full basic OAS" is payable only if you have resided in Canada for at least 40 years after turning age 18.

If you're receiving GIS, it is payable only if you reside in Canada, but again temporary absences up to six months are allowed.


----------



## gibor365

Dogger1953 said:


> CPP is payable anywhere in the world with no restrictions on residence in Canada.
> 
> OAS is the same if you have at least 20 years of residence in Canada after turning age 18, otherwise you must continue to reside in Canada but temporary absences up to six months are allowed. Regardless where you live, the "full basic OAS" is payable only if you have resided in Canada for at least 40 years after turning age 18.
> 
> If you're receiving GIS, it is payable only if you reside in Canada, but again temporary absences up to six months are allowed.


Thanks... that what I was thinking ... just to clarify about OAS:
1. if I leave in Canada until age 67 and will reside in Canada for 33 years , I will get same amount regardless if after 67 I will be leaving in Canada or in another country? Is it right?
2. if I leave in Canada until age 60 and thus will reside in Canada for 26 years, I can apply for OAS from abroad, but will be getting OAS equal to 26 years leaving in Canada?


----------



## Dogger1953

gibor said:


> Thanks... that what I was thinking ... just to clarify about OAS:
> 1. if I leave in Canada until age 67 and will reside in Canada for 33 years , I will get same amount regardless if after 67 I will be leaving in Canada or in another country? Is it right?
> 2. if I leave in Canada until age 60 and thus will reside in Canada for 26 years, I can apply for OAS from abroad, but will be getting OAS equal to 26 years leaving in Canada?


gibor - You're 100% correct. In both examples you will be eligible for the same amount of OAS regardless whether you're living in Canada or whether you leave Canada.


----------



## carverman

Here's another example why taking CPP early at 60 may be beneficial rather than waiting at 65. 

My friend, who worked for the federal gov't for 29 years, retired at 56 when the magic number (age + years of service) = 56+29= 85 . 
She opted to take her CPP early (at 60), because at 65 ,her superannuation gov't pension (according to her), gets clawed back by a considerable amount when most gov't workers apply for CPP along with their gov't pensions.
Collecting the extra income for 5 years, from age 60 to 65 allows her to collect what she paid into CPP and then some.


> Seems to me that it is better to take as much as you can as soon as you can,” said Ralph Roberts, echoing the view of several others. “There are no guarantees in this world.”
> Taking the pension earlier has a lot of appeal. You’ve paid into the plan during your working life, so why not cash in? Ottawa usually takes more than it gives, so don’t leave anything on the table.





> According to Human Resources and Skills Development Canada, that’s what most of us are doing. In 2012, more than two-thirds of new CPP recipients were under age 65, the agency says. *Fewer than 4 per cent were 66 or older.
> *


http://www.thestar.com/business/per...uld_you_claim_cpp_at_60_or_wait_until_70.html


----------



## NorthernRaven

carverman said:


> My friend, who worked for the federal gov't for 29 years, retired at 56 when the magic number (age + years of service) = 56+29= 85 .
> She opted to take her CPP early (at 60), because at 65 ,her superannuation gov't pension (according to her), gets clawed back by a considerable amount when most gov't workers apply for CPP along with their gov't pensions.
> Collecting the extra income for 5 years, from age 60 to 65 allows her to collect what she paid into CPP and then some.


It isn't really a clawback. The federal pension system (and other similar ones) were designed to pay the pension at age 60, and CPP to kick in at 65. The employee contributions were designed to "harmonize" with CPP contributions, but there are two different starting ages there. So a particular pension might be $30000 from 60-64 (often referred to as the "bridge" period), and $25,000 from 65 onwards, with the difference approximately what CPP would provide - the intent is to have the two total to roughly the same amount so pension income is similar each year. It isn't a clawback because CPP has started - it is the amount of pension your contributions have bought.

I would think that whether to take early CPP would be completely independent of the federal pension - like anyone else she'd be deciding that fewer annual dollars earlier is preferable to more later - the federal pension is going to reduce at 65 by the same amount no matter what.


----------



## Dogger1953

NorthernRaven said:


> It isn't really a clawback. The federal pension system (and other similar ones) were designed to pay the pension at age 60, and CPP to kick in at 65. The employee contributions were designed to "harmonize" with CPP contributions, but there are two different starting ages there. So a particular pension might be $30000 from 60-64 (often referred to as the "bridge" period), and $25,000 from 65 onwards, with the difference approximately what CPP would provide - the intent is to have the two total to roughly the same amount so pension income is similar each year. It isn't a clawback because CPP has started - it is the amount of pension your contributions have bought.
> 
> I would think that whether to take early CPP would be completely independent of the federal pension - like anyone else she'd be deciding that fewer annual dollars earlier is preferable to more later - the federal pension is going to reduce at 65 by the same amount no matter what.


I agree 100% with NorthernRaven!


----------



## rikk

Mine and my wife's harmonized pensions are reduced by the amount the CPP would have been if we started collecting CPP at age 65 ... so ... if we took a reduced CPP at 60, then there would be a shortfall beginning at age 65 going forward of that reduced amount which is what ... 30%. So, doing the arithmetic, ~$7K x 5 = $35K gross if I'd collected at 60 to 65 (plus my salary which would have been a horrendous tax hit) versus $3K more going forward from age 65. Incentive for me to collect at 65 and live at least 11 more years to break even


----------



## Dogger1953

rikk said:


> Mine and my wife's harmonized pensions are reduced by the amount the CPP would have been if we started collecting CPP at age 65 ... so ... if we took a reduced CPP at 60, then there would be a shortfall beginning at age 65 going forward of that reduced amount which is what ... 30%. So, doing the arithmetic, ~$7K x 5 = $35K gross if I'd collected at 60 to 65 (plus my salary which would have been a horrendous tax hit) versus $3K more going forward from age 65. Incentive for me to collect at 65 and live at least 11 more years to break even


rikk - A couple of comments on your equation. First, the reduction for taking it early is currently 0.56% per month, or 33.6% at age 60. That will increase to 34.8% for 2015 and 36.0% for 2016 and onwards. That extends your breakeven calculation a bit. Secondly, if you wait until age 65 your "calculated retirement pension" could be going up or down, depending on your lifetime earnings record until age 60 and depending on whether you're working from age 60 to age 65 and if so whether those earnings are more than or less than your "average lifetime earnings" until age 65. The impact of this is that although your pension at age 65 is 100%, the "of what" could be more or less than the 66.4% "of what" at age 60. Thirdly, if you take your pension at age 60 while you're still working, any subsequent earnings and contributions would earn you post-retirement benefits (instead of being used to increase or decrease your "of what" at age 65). The PRBs can again affect the breakeven calculation.


----------



## rikk

Hi Dogger ... my main point was .. "Mine and my wife's harmonized pensions are reduced by the amount the CPP _would have been_ if we started collecting CPP at age 65" ... apologies for rambling on. As I posted up top, it's my opinion that everyone needs to do the arithmetic (I refuse to call it math ) for their own particular plan/situation ... e.g. marginal tax rate on CPP if collecting CPP plus salary vs when retired, continuing contributing or not, and so on ... apologies for the approximations ... was just approximating  ... I myself collected 1 year of CPP at ~$11K beginning at age 65 while working ... why not ... my pension was paid up  This was under the old rules ... my wife is under the new rules, she has a few more years to go before looking into what's best.


----------



## Dogger1953

rikk said:


> Hi Dogger ... my main point was .. "Mine and my wife's harmonized pensions are reduced by the amount the CPP _would have been_ if we started collecting CPP at age 65" ... apologies for rambling on. As I posted up top, it's my opinion that everyone needs to do the arithmetic (I refuse to call it math ) for their own particular plan/situation ... e.g. marginal tax rate on CPP if collecting CPP plus salary vs when retired, continuing contributing or not, and so on ... apologies for the approximations ... was just approximating  ... I myself collected 1 year of CPP at ~$11K beginning at age 65 while working ... why not ... my pension was paid up  This was under the old rules ... my wife is under the new rules, she has a few more years to go before looking into what's best.


rikk - I agree totally with your main point!


----------



## cougar

*Questions for Dogger*

Hi Dogger, I have 2 questions and wonder if you may be able to answer them.


Firstly regarding myself- currently 56 years of age and retired at 51( just before 52nd birthday) so no further CPP contributions from 52-65. My online statement says I will get approx. $550 per month if I retire at 60 and over $900 per month if I retire at 65 but I think this is if I am still working and contributing which I am not. I also took a couple of years off work for each of my kids so would have a couple of drop out years for child rearing. So basically I worked and contributed the max for 27 years except the two years I was on mat leave. I am assuming in my case I would be better to collect my CPP at age 60 rather than 65 so I don't have 5 more years of 0 earnings factored into the equation?

OAS-my husband became a permanent resident at age 53 so I believe he will get 12/40 of the OAS? If he does not take it until age 70 would he earn 5 more years of residency( i.e. 17/40) plus the bonus percentage for delaying it until age 70 or do you know? I was unable to find an answer on the OAS website. Thanks so much.


----------



## Dogger1953

cougar said:


> Hi Dogger, I have 2 questions and wonder if you may be able to answer them.
> 
> 
> Firstly regarding myself- currently 56 years of age and retired at 51( just before 52nd birthday) so no further CPP contributions from 52-65. My online statement says I will get approx. $550 per month if I retire at 60 and over $900 per month if I retire at 65 but I think this is if I am still working and contributing which I am not. I also took a couple of years off work for each of my kids so would have a couple of drop out years for child rearing. So basically I worked and contributed the max for 27 years except the two years I was on mat leave. I am assuming in my case I would be better to collect my CPP at age 60 rather than 65 so I don't have 5 more years of 0 earnings factored into the equation?
> 
> OAS-my husband became a permanent resident at age 53 so I believe he will get 12/40 of the OAS? If he does not take it until age 70 would he earn 5 more years of residency( i.e. 17/40) plus the bonus percentage for delaying it until age 70 or do you know? I was unable to find an answer on the OAS website. Thanks so much.


Cougar - Sorry for the delay in responding. I was away on holiday. Two very good questions!

First, I'd need to see your entire CPP contributory record to give you 100% accurate amounts, but your age-60 and age-65 estimates will definitely decrease if you don't have any more earnings. The age-60 amount could decrease to about $500, and the age-65 amount could decrease to about $734. If you do have only 4 years of child-rearing dropout, that could increase the age-60 amount to about $560 and the age-65 amount to about $800.

For OAS, your husband cannot "double-dip" and have the delay from age 65 to 70 count as both additional years of residence plus receive the bonus percentage for voluntary deferral. He can mix the two though, and by my calculations his best choice would be 15/40ths with a 2-year voluntary deferral of 14.4%.


----------



## cougar

Dogger, Thanks so much for taking the time to answer my questions-I really appreciate that!


----------



## Dogger1953

jacofan said:


> Hi Dogger,
> 
> If someone contributes fully from age 18 - 57, the remaining 8 years can just be drop out years right with no impact on the payout amt?
> 
> So if that person retired at 57, he would get the max amt allotted for the age he starts drawing it at - whether thats 58, 60 or even waiting until 65? Thanks


jacofan - You're 100% correct that someone who has at least 39 years of max earnings will receive a max pension at whatever age he/she starts receiving it, even if that's age 70. Your only error is that they can't receive it at age 58.


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## Mookie

Hi Dogger, I think I have a similar situation. I have been contributing to CPP since 1986 and maxing since 1992 (see image below for details) and plan to retire in 2023 when I turn 55. I don't plan to take my CPP until age 70 so that I can draw down my RRSPs first with a lower income and less taxes. Can you tell me what my pension would be at age 70, assuming I retire and stop contributing to CPP at age 55, in 2023? Would I end up collecting more CPP at age 70 if I work beyond 55, or will I have reached the maximum benefit by then? Thanks!


----------



## Dogger1953

Mookie said:


> Hi Dogger, I think I have a similar situation. I have been contributing to CPP since 1986 and maxing since 1992 (see image below for details) and plan to retire in 2023 when I turn 55. I don't plan to take my CPP until age 70 so that I can draw down my RRSPs first with a lower income and less taxes. Can you tell me what my pension would be at age 70, assuming I retire and stop contributing to CPP at age 55, in 2023? Would I end up collecting more CPP at age 70 if I work beyond 55, or will I have reached the maximum benefit by then? Thanks!


Mookie - Depending on what month you were born in, your current CPP statement of contributions probably says that your age-65 retirement pension could be about $1,001.18 (if you were born in June 1968). If you retire in 2023 at age 65, your actual pension (in 2014 dollars) would be $890.16 at age 65 or $1,264.03 at age 70. You would need to work six more years at maximum to get that up to the maximum amounts of $1,038.33 at age 65 and $1,474.43 at age 70.


----------



## Mookie

Thanks Dogger for the quick reply. This is great info.


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## carthous

*CPP question*

Hi, 

So this is the situation and I was hoping you could give me some information.

I've been working at my new company for 3 and a half month, i get paid bi-monthly.

For the first 3 months (6 paychecks) they didn't pay my CPP, I just didn't pay attention / figured the company would pay my CPP!

I was hired in September, it is now mid December and they are taking all the CPP that should have been paid off of my two last checks of the year. Which comes out to be about $500 from each check. 

Question 1: How legal is this? I know i have to pay CPP but for the company to not pay my cpp and then force me to pay it all off on my last 2 checks of the year?


Now, in my last company I've paid $1900 in CPP, and the max CPP to be paid this year is 2425.50. in my last paycheck from the new company I paid $500 in CPP with the total I've paid to CPP this year $2400. So all I need to pay in CPP on my next check to met the maximum of the year would be $25.50. 

Question 2: Can I tell my employer to not pay any more than $25.50 for my CPP on my next paycheck?

Now, to me that seems fine. My employer is telling me that they can't do that. Now I'm wondering why they can't do that. They didn't pay my CPP for 3 months and now trying to shove all the payments in the last month of the year.

Thank you.


----------



## Dogger1953

carthous said:


> Hi,
> 
> So this is the situation and I was hoping you could give me some information.
> 
> I've been working at my new company for 3 and a half month, i get paid bi-monthly.
> 
> For the first 3 months (6 paychecks) they didn't pay my CPP, I just didn't pay attention / figured the company would pay my CPP!
> 
> I was hired in September, it is now mid December and they are taking all the CPP that should have been paid off of my two last checks of the year. Which comes out to be about $500 from each check.
> 
> Question 1: How legal is this? I know i have to pay CPP but for the company to not pay my cpp and then force me to pay it all off on my last 2 checks of the year?
> 
> 
> Now, in my last company I've paid $1900 in CPP, and the max CPP to be paid this year is 2425.50. in my last paycheck from the new company I paid $500 in CPP with the total I've paid to CPP this year $2400. So all I need to pay in CPP on my next check to met the maximum of the year would be $25.50.
> 
> Question 2: Can I tell my employer to not pay any more than $25.50 for my CPP on my next paycheck?
> 
> Now, to me that seems fine. My employer is telling me that they can't do that. Now I'm wondering why they can't do that. They didn't pay my CPP for 3 months and now trying to shove all the payments in the last month of the year.
> 
> Thank you.


carthous - I'm an expert on the benefit side of CPP, but not on the contributions side as that is administered by CRA. Having said that, I do know that your employer cannot stop deducting CPP based on the fact that you also contributed at another employer and you will exceed the maximum contribution. The good news however, is that if you do exceed the maximum contribution for the year, you will be eligible for a refund when you file your 2014 income tax return.


----------



## peterk

Dogger1953 said:


> I do know that your employer cannot stop deducting CPP based on the fact that you also contributed at another employer and you will exceed the maximum contribution. The good news however, is that if you do exceed the maximum contribution for the year, you will be eligible for a refund when you file your 2014 income tax return.


Interesting. From the employer side how does this work? Does the employer get refunded their portion of over contributions? Which employer? Is the "first" employer to pay the CPP stuck with the bill or is it split proportional based on the employees income? or is the employer SOL?


----------



## Dogger1953

peterk said:


> Interesting. From the employer side how does this work? Does the employer get refunded their portion of over contributions? Which employer? Is the "first" employer to pay the CPP stuck with the bill or is it split proportional based on the employees income? or is the employer SOL?


peterk - Neither employer is eligible for a refund in this situation. The extra portion of the employers' contribution simply stays in the CPP fund to pay for benefits.


----------



## ldk

Hi Dogger….thanks so much for taking the time to reply to everyone's questions. Tonnes of great info on this thread! Wondering if you have an opinion on our situation:

My husband and I have been self-employed (equal shareholders in our own corp./no other employees) for 20 years now--currently both aged 44. We have T4'd ourselves for the past 20 years and as such have paid both our and the employer's portion of CPP. We are wondering if that is an advisable strategy to continue going forward? (a large/loaded question, I know!) When we were younger and didn't know how long we would be self-employed, what our potential earnings might be, etc. we chose to take T4 income out of our corp and considered the CPP contributions our best longevity hedge given that we had no other pension plans. Now we are wondering if we would be best served to dividend ourselves out of the corp. and invest the CPP contribution amounts within the Corp instead? How would we go about calculating our benefit under the 2 scenarios (continuing to pay the CPP contributions vs ceasing contributions) given that we anticipate 'retiring' in 10 years or so? 

Any thoughts you might have on what factors we need to consider would be appreciated.


----------



## Dogger1953

ldk said:


> Hi Dogger….thanks so much for taking the time to reply to everyone's questions. Tonnes of great info on this thread! Wondering if you have an opinion on our situation:
> 
> My husband and I have been self-employed (equal shareholders in our own corp./no other employees) for 20 years now--currently both aged 44. We have T4'd ourselves for the past 20 years and as such have paid both our and the employer's portion of CPP. We are wondering if that is an advisable strategy to continue going forward? (a large/loaded question, I know!) When we were younger and didn't know how long we would be self-employed, what our potential earnings might be, etc. we chose to take T4 income out of our corp and considered the CPP contributions our best longevity hedge given that we had no other pension plans. Now we are wondering if we would be best served to dividend ourselves out of the corp. and invest the CPP contribution amounts within the Corp instead? How would we go about calculating our benefit under the 2 scenarios (continuing to pay the CPP contributions vs ceasing contributions) given that we anticipate 'retiring' in 10 years or so?
> 
> Any thoughts you might have on what factors we need to consider would be appreciated.


ldk - It's hard to place a value on your CPP contributions, because the CPP provides benefits for disability and death in addition to the retirement pension. Looking just at the retirement pension though, each year of maximum contributions ($4,959.90 for 2015 for both employee/employer portions) buys you 1/39th of a maximum pension at age 65 ($27.30 per month for 2015). From a simple mathematic calculation, it would take you about 15.5 years of receiving that benefit to recover the contribution cost. If you factor in that CPP benefits are fully indexed to inflation, that would reduce the breakeven period. If you further factor in the potential disability and death benefits, that makes the CPP contributions a decent investment in my opinion, but many will argue otherwise.


----------



## ldk

Thanks for the response! You've given us some good info to help us with our decision.

Cheers~


----------



## fraser

Dogger...as the CPP CSR suggested, I sent details of my 2013 CPP contributions (cpp had not adjusted my pension) to them. sent a copy of my t4, the pay stub (entire 24k was on one cheque), and a CRA detailed assessment. 

Sent it in mid Dec, just noticed that they deposited $140 this week. We have been away more a month and have no access to our snail mail. I assume they have sent me a reconciliation. 

I continue to be impressed with the service that CPP has provided to me-the information and the timeliness of their responses. This is my third contact/issue with them.


----------



## Dogger1953

fraser said:


> Dogger...as the CPP CSR suggested, I sent details of my 2013 CPP contributions (cpp had not adjusted my pension) to them. sent a copy of my t4, the pay stub (entire 24k was on one cheque), and a CRA detailed assessment.
> 
> Sent it in mid Dec, just noticed that they deposited $140 this week. We have been away more a month and have no access to our snail mail. I assume they have sent me a reconciliation.
> 
> I continue to be impressed with the service that CPP has provided to me-the information and the timeliness of their responses. This is my third contact/issue with them.


fraser - I'm glad that you're impressed with the service that you've received from Service Canada, but don't you think they should have paid you what you were entitled to, without you having to provide them with copies of information that they should likely already have received directly from CRA?


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## fraser

Yes, it should have been done correctly in the first place. Just another reason to stay on top of your own finances and understand them thoroughly.

One way I judge any organization is how they deal with issues and/or rectify problems. That is typically when the rubber hits the road.

In this instance I was very satisfied with the resolution and the time to resolution once I had raised the issue. I never did find out whether it was a computer hand off issue from CRA, a CPP issue, or both.


----------



## Dogger1953

fraser said:


> Yes, it should have been done correctly in the first place. Just another reason to stay on top of your own finances and understand them thoroughly.
> 
> One way I judge any organization is how they deal with issues and/or rectify problems. That is typically when the rubber hits the road.
> 
> In this instance I was very satisfied with the resolution and the time to resolution once I had raised the issue. I never did find out whether it was a computer hand off issue from CRA, a CPP issue, or both.


fraser - I guess we'll have to agree to disagree. To me it's unacceptable that anyone should have to call Service Canada to make sure that all their earnings have been included in their CPP calculation, regardless how well they resolve it if/when you do call.


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## fraser

Dogger I worked for, and retired from one of the world's largest technology companies. Our DB pension plan admin was outsourced to one a very recognizable international pension admin firm.

After reading the actual pension document it became clear to me that I knew more than either of the reps that I was dealing with in both organizations. Three tries, nine months to get to the correct number. It was 34 percent higher than the first original number that they both provided.

Private industry is no better. The only person who cares about your money is you.


----------



## Dogger1953

fraser said:


> Dogger I worked for, and retired from one of the world's largest technology companies. Our DB pension plan admin was outsourced to one a very recognizable international pension admin firm.
> 
> After reading the actual pension document it became clear to me that I knew more than either of the reps that I was dealing with in both organizations. Three tries, nine months to get to the correct number. It was 34 percent higher than the first original number that they both provided.
> 
> Private industry is no better. The only person who cares about your money is you.


fraser - That's a sad commentary on life! I agree that the public should have a general understanding of their pension entitlement, and possibly be aware if they're being underpaid by a third. I don't agree that they should be experts on the calculation of their CPP and be able to identify that one year of earnings is missing. Are you sure that your CPP is now properly calculated?


----------



## skyryder

*Options for collecting CPP and OAS abroad*

Greets Dogger 

I'm looking for what options will be available to me to periodically empty my checking account and pick up the proceeds at banks , or other, in countries like: Jamaica, Tamil Nadu (India), Ecuador, Mexico, Columbia, and Pakistan [current "most likely" as a start  ]

I talked to my local bank manager at RBC and nothing economical came up - only transfers with high costs that might be OK for oneshot funds transfer, but onerous burden on transferring my meager gov pensions. 


I have no private pensions.

Cheers
casey
P.S Please pass on my admiration to whoever is responsible for the totally sane "captcha"


----------



## Dogger1953

skyryder said:


> Greets Dogger
> 
> I'm looking for what options will be available to me to periodically empty my checking account and pick up the proceeds at banks , or other, in countries like: Jamaica, Tamil Nadu (India), Ecuador, Mexico, Columbia, and Pakistan [current "most likely" as a start  ]
> 
> I talked to my local bank manager at RBC and nothing economical came up - only transfers with high costs that might be OK for oneshot funds transfer, but onerous burden on transferring my meager gov pensions.
> 
> 
> I have no private pensions.
> 
> Cheers
> casey
> P.S Please pass on my admiration to whoever is responsible for the totally sane "captcha"


Casey - I'm afraid that your question is outside my area of expertise. Perhaps others will have some advice for you?


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## Rebecca

fraser said:


> Dogger I worked for, and retired from one of the world's largest technology companies. Our DB pension plan admin was outsourced to one a very recognizable international pension admin firm.
> 
> After reading the actual pension document it became clear to me that I knew more than either of the reps that I was dealing with in both organizations. Three tries, nine months to get to the correct number. It was 34 percent higher than the first original number that they both provided.
> 
> Private industry is no better. The only person who cares about your money is you.


Fraser, are you saying that your DB pension was miscalculated? My brother in law worked for a large tech company, and is now retired. Should he be checking to see if he's being underpaid?


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## JB99

*Thanks*

Hello
After reading through 24 pages of Q&A thank you for your contributions and answers.

I believe I have only seen one question on people who have bridging as part of their pensions and may start another thread. Today my question to bloggers is.....

I have been having a very difficult time trying to decide if I should take CPP at 60 or 65

At 60 I receive $680 per month
At 65 I receive $1,065 per month or a difference of $385
Simple math dictates the two lines will cross sometime at 75, this assumes 5% interest rate and no taxes as I will deposit the money (age 60 money) in a TFA. First year is 0, (easier to use calculators) after five years the savings grows to almost $46,000, then drawing down at 383 per month (simple math) its gone in 10 years.
Now, I thought this is not correct because technically the $46,000 earns $2,300 per year interest at 5%, then the lines will cross much later in life, almost another 30 plus years.

Am I doing something wrong and have I posted this in the wrong thread.
Your comments are appreciated.


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## wendi1

Well. It depends.

Don't forget your CPP is partially indexed to inflation. For me, this is important, as none of my other retirement streams are. Also, my family is very long lived (though only time will tell if I am, too). So, I would delay taking CPP as long as possible to get the maximum amount of my retirement income partially indexed to inflation. I am willing to take the risk of not getting any CPP at all, and am willing to take that risk on behalf of my beneficiaries. As well, does taking your CPP later at a higher level put your OAS at risk of clawback?

But if you need the money between 60 and 65, for heaven's sake, take it. Or if you have health problems that might affect your longevity, take it. You might be in a postition to out-actuary the actuaries, but I would try a high-level approach, first.


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## Dogger1953

JB99 - I agree with Wendi's reply, but there's another consideration as well. If you're not working between 60 and 65 (or even if you are working but earning less than the YMPE), that CPP estimate of $1,065 at age 65 will actually decrease unless you already have 39 years of maximum contributions by age 60.


----------



## JB99

Dogger1953 said:


> JB99 - I agree with Wendi's reply, but there's another consideration as well. If you're not working between 60 and 65 (or even if you are working but earning less than the YMPE), that CPP estimate of $1,065 at age 65 will actually decrease unless you already have 39 years of maximum contributions by age 60.


I apologise for not inserting more information

I have been working full time since I was 19, and will be retiring in October at 55, so I guess I don't quite make the 39 year rule, unless you count part time work since age of 16.

Interesting, I think I am over analyzing all this, but thank you for your answers.


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## Dogger1953

JB99 said:


> I apologise for not inserting more information
> 
> I have been working full time since I was 19, and will be retiring in October at 55, so I guess I don't quite make the 39 year rule, unless you count part time work since age of 16.
> 
> Interesting, I think I am over analyzing all this, but thank you for your answers.


JB99 - At age 65 you can drop out your lowest 8 years. Since you'll have 10 years of zeros from age 55 to 65, that alone will decrease the $1,065 to about $1,011. The exact amount of decrease will depend on how close some of your partial years are to maximum.


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## Retired Peasant

If someone has applied for CPP 10 months before it would start, when (or even should) they expect some kind of acknowledgement? Applied last August to start in June, and have heard nothing.


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## Dogger1953

Retired Peasant said:


> If someone has applied for CPP 10 months before it would start, when (or even should) they expect some kind of acknowledgement? Applied last August to start in June, and have heard nothing.


You should have received a notice of approval by now. I strongly recommend calling Service Canada at 1-800-277-9914 to confirm that your application has at least been received. It should have only taken 3-4 months at most.


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## celishave

Is there any difference between these two scenarios?
1) Guy A works from age of 20 to 50 for 30 M credits
2) Guy B works from age 36 to 66 for 30 M credits

They both plan to collect CPP at age 67. Is there any difference between the two? In my mind, Guy A should get more as his contributions would have been earning income in the years between age 50 and 66. Mind you Guy B's contribution would be higher than Guy A due to inflation on the YMPE


----------



## cwrea

celishave said:


> Is there any difference between these two scenarios?
> 1) Guy A works from age of 20 to 50 for 30 M credits
> 2) Guy B works from age 36 to 66 for 30 M credits
> 
> They both plan to collect CPP at age 67. Is there any difference between the two? In my mind, Guy A should get more as his contributions would have been earning income in the years between age 50 and 66. Mind you Guy B's contribution would be higher than Guy A due to inflation on the YMPE


I'll tighten your assumptions to further presume: (a) A and B are the same age, (b) A and B have no other differences that would materially affect retirement benefits; e.g. having received CPP disability benefits, or qualifying for a child rearing drop-out, and (c) zero contributions where there are no M credits; i.e. didn't work == didn't contribute at all.

Since they both have 30 M credits, their resulting adjusted pensionable earnings (APE) would be identical. Consider: each of those M credits is worth YMPE for that year, and the adjustment to get a year's APE from the year's unadjusted pensionable earnings (UPE) divides UPE by YMPE and multiplies by the YMPE5 (the average YMPE for the latest five years). So, if for M credits UPE = 1.0*YMPE, and since APE = (UPE/YMPE)*YMPE5, then APE = YMPE5 (the YMPEs cancel out), for all years where there is an M credit, and zero otherwise. For more on this, see http://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/

Each has a contributory period of 588 months, and each qualifies for a 17% general drop-out (96 months), plus 24 months for after age 65. So 120 zero-earning months get dropped, and it really doesn't matter when those zero-earning months occurred. So, each of A and B are left with 360 months of earnings at maximum, and 108 at zero, or 76.923% of the maximum possible. That portion of YMPE5, times 25%, times 1/12, would be their basic age 65 monthly retirement benefit, but since they're retiring at 67, each qualifies for an increase of 16.8% (0.7% per month of late retirement, times 24 months). If it were this year, with YMPE5 = 51120, they'd each start CPP at $956.86/month, indexed annually for inflation.

So, no, there is no difference between the two cases despite the timing in the contributions being different. CPP is a defined benefit plan, and the rules that are defined by the plan do not afford any kind of bonus to participants contributing sooner vs. those contributing later -- or, conversely, the plan was designed so as to not penalize participants who contribute later as opposed to sooner; each participant's earnings history is normalized very deliberately when calculating the retirement benefit.

You're right, though, that participants contributing later will contribute more _dollars_ to the plan based on the YMPE increases, but in _real_ terms, and ignoring any changes in contribution rate, the contributions would be about the same in terms of earning power.

Rather, where guy A might have actually "benefited" vs. guy B is if he made, say, many of his contributions prior to the series of contribution rate hikes. Consider that from 1986 to 2003, employee CPP contribution rates rose steadily from 1.8% to 4.95%.

Regards,

Chris W. Rea


----------



## Dogger1953

Chris

This is a very good answer!!!


----------



## cwrea

Thanks, Dogger!



Dogger1953 said:


> Chris
> 
> This is a very good answer!!!


----------



## gaspr

I think that you two should get together and build an app that does these calculations.

All in favour?


----------



## cwrea

Heh! I've already been independently working on it. I'll share more details here when I'm ready for a public beta. If anybody's keen on being involved sooner, feel free to send me a _private_ message. Meanwhile, gaspr, you should pick some lottery numbers this week with those powers of insight 

Regards,

Chris



gaspr said:


> I think that you two should get together and build an app that does these calculations.
> 
> All in favour?


----------



## gaspr

Great! Let us know when you need beta testers...


----------



## strathglass

After reading another article on CPP calculations and running my numbers, the results left me confused; perhaps I made a mistake.

All I would like to figure out is what percentage of the maximum monthly CPP payout would I receive at age 60 if I work 3 more years until age 55 ... or maybe until 56 or 57.
My fractional M values for early years: age 18=.173 (birthday: April); 19=0.136; 20=0.167; 21=0.270; 22=0.268; 23=0.293.
All other years until retirement I get a full M **EXCEPT** a couple years back in 2008 I took the year off and lived off of severance: SOC says "B" for this year (Below Basic Exemption).
Is this sufficient data to predict my CPP amount if I start early, at age 60?


----------



## Dogger1953

strathglass said:


> After reading another article on CPP calculations and running my numbers, the results left me confused; perhaps I made a mistake.
> 
> All I would like to figure out is what percentage of the maximum monthly CPP payout would I receive at age 60 if I work 3 more years until age 55 ... or maybe until 56 or 57.
> My fractional M values for early years: age 18=.173 (birthday: April); 19=0.136; 20=0.167; 21=0.270; 22=0.268; 23=0.293.
> All other years until retirement I get a full M **EXCEPT** a couple years back in 2008 I took the year off and lived off of severance: SOC says "B" for this year (Below Basic Exemption).
> Is this sufficient data to predict my CPP amount if I start early, at age 60?


Strathglass - Based on what you've provided, it appears that you may have 31 Ms if you work until age 55. If you take your CPP at age 60, the 17% dropout will allow you to drop out your lowest 7 years and 2 months of earnings, meaning that you'll count your best 34 years and 10 months. You will then receive only 64% of your "calculated retirement pension" because you're taking it early.

By my calculations, you'll receive:
- 58.85% of max if you retire at age 55 (64% of a calculated retirement pension of 91.96%), or
- 60.24% of max if you retire at age 56 (64% of a calculated retirement pension of 94.12%), or
- 61.58% of max if you retire at age 57 (64% of a calculated retirement pension of 96.22%).


----------



## strathglass

Thank you kindly Dogger!


----------



## dubmac

CPP gained 18.7% last year, now worth $264B
http://www.cbc.ca/news/business/cpp-gained-18-7-last-year-now-worth-264b-1.3082469
interesting read!


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## RBull

^Yes, very interesting. I read much of that on the CPP investment board web site. It seems this is a model for good stewardship of a pension plan around the world. It also brings up the question of the size of benefits and premiums. 

What I would like to be able to do is invest all of my personal savings under the CPP umbrella and also likely enjoy low management expense.


----------



## yupislyr

RBull said:


> What I would like to be able to do is invest all of my personal savings under the CPP umbrella and also likely enjoy low management expense.


Hah and would you look at that, Harper & Co. are now proposing that you can voluntarily save more in the CPP if you want. Details to come over the summer apparently..

http://www.cbc.ca/news/politics/joe...voluntary-canada-pension-plan-boost-1.3087896


----------



## RBull

yupislyr said:


> Hah and would you look at that, Harper & Co. are now proposing that you can voluntarily save more in the CPP if you want. Details to come over the summer apparently..
> 
> http://www.cbc.ca/news/politics/joe...voluntary-canada-pension-plan-boost-1.3087896


Doubtful it will apply to those who are already retired like me, however will be interesting to see if they come up with anything at all.


----------



## gibor365

> What I would like to be able to do is invest all of my personal savings under the CPP umbrella and also likely enjoy low management expense.





> Hah and would you look at that, Harper & Co. are now proposing that you can voluntarily save more in the CPP if you want. Details to come over the summer apparently..


Sounds interesting... so if I invest at age 50 100K into CPP, and would like to start getting CPP at age 60 , would they tell me by how much exactly my CPP income will increase?


----------



## gibor365

Dogger, we got confused again projecting CPP when retire earlier....
Below is a real example for my wife:
She's 40. So far she contributed Max to CPP for 15 years and 50% of Max 1 year (she lives in Canada 16 years).
CPP website tells: If you apply at the age of 60, you could receive a monthly retirement pension of: $585.54".
I understand that if she continues to work until 60 and contribute Max every year, she gonna get $585. Is it correct?
What gonna be her estimated CPP payment if she retires at 50 (so she will have 25.5 years of max contributions) and start getting CPP at 60?
I think in one of the posts , you said that 1 year of Max contribution worth $25 ... if I use this "$25 rule", I get completely different numbers.
For example . if she works until 60 with max contribution, she gonna have 35 years x $25 = $875 -> much higher $585 that published on the website.
Could you help with those estimates?


----------



## Spudd

At 60 you don't get full CPP, you get reduced CPP. I think Dogger's estimate of $25 was for full CPP (which you get at 65, not 60).


----------



## janus10

gibor said:


> For example . if she works until 60 with max contribution, she gonna have 35 years x $25 = $875 -> much higher $585 that published on the website.


Take $875, multiply by penalty for early CPP (1 - 0.6%/month x 5 years x 12 months/ years) and, lo and behold, you get $560.


----------



## gibor365

janus10 said:


> Take $875, multiply by penalty for early CPP (1 - 0.6%/month x 5 years x 12 months/ years) and, lo and behold, you get $560.


As per your calculation, if she retires at 50 and starting to get CPP , I'm getting negative amount .... (1 - 0.6% x 15 x 12)= -0.08


----------



## Dogger1953

janus10 said:


> Take $875, multiply by penalty for early CPP (1 - 0.6%/month x 5 years x 12 months/ years) and, lo and behold, you get $560.


Janus wins a kewpie doll for basically getting the correct answer, but the math changes a bit more for an age-60 CPP retirement pension. I'll explain the actual mathematics in a later reply to gibor's original question.


----------



## gibor365

Dogger1953 said:


> Janus wins a kewpie doll for basically getting the correct answer, but the math changes a bit more for an age-60 CPP retirement pension. I'll explain the actual mathematics in a later reply to gibor's original question.


It would be great.... as per janus formula my wife should pay to CPP


----------



## Eclectic12

yupislyr said:


> Hah and would you look at that, Harper & Co. are now proposing that you can voluntarily save more in the CPP if you want.
> Details to come over the summer apparently...


Consultation to start in the summer ... I don't see anything about details or legislation. If goes the way Flaherty's consultation went in 2010 - nothing may come of it.




gibor said:


> Sounds interesting... so if I invest at age 50 100K into CPP, and would like to start getting CPP at age 60 , would they tell me by how much exactly my CPP income will increase?


Even if something comes out of the consultation ... I'm doubting they will go for such a large contribution by someone so close to pulling the money out. As for telling you how much the increase would be - I'd want that info at a minimum before handing money over. Just don't be surprised is the amounts are lower as well as what the enhanced CPP works out to being.


Cheers


----------



## janus10

gibor said:


> As per your calculation, if she retires at 50 and starting to get CPP , I'm getting negative amount .... (1 - 0.6% x 15 x 12)= -0.08


You do realize you can't start CPP before 60, right? I gave you a quick calculation for one specific set of inputs. I have created my own CPP calculation tool and I used Excel because it needs to accommodate various scenarios. Your example was easy enough to calculate in my head.


----------



## gibor365

janus10 said:


> You do realize you can't start CPP before 60, right? I gave you a quick calculation for one specific set of inputs. I have created my own CPP calculation tool and I used Excel because it needs to accommodate various scenarios. Your example was easy enough to calculate in my head.


Sure I do. This is why I;m asking about case where my wife retires at 50 , but applying for CPP at 60


----------



## Dogger1953

gibor said:


> Dogger, we got confused again projecting CPP when retire earlier....
> Below is a real example for my wife:
> She's 40. So far she contributed Max to CPP for 15 years and 50% of Max 1 year (she lives in Canada 16 years).
> CPP website tells: If you apply at the age of 60, you could receive a monthly retirement pension of: $585.54".
> I understand that if she continues to work until 60 and contribute Max every year, she gonna get $585. Is it correct?
> What gonna be her estimated CPP payment if she retires at 50 (so she will have 25.5 years of max contributions) and start getting CPP at 60?
> I think in one of the posts , you said that 1 year of Max contribution worth $25 ... if I use this "$25 rule", I get completely different numbers.
> For example . if she works until 60 with max contribution, she gonna have 35 years x $25 = $875 -> much higher $585 that published on the website.
> Could you help with those estimates?


gibor - Your first mistake is thinking that the CPP estimate of $585 assumes that she must earn Max every year until age 60. It assumes that she will continues the same earnings pattern (which is 15.5 years of max out of the 22 years from age 18 to 40). This means that she would need to work at max for another 15 years to receive the $585. If she retires at age 50 with only 10 more years of max, her age-60 CPP would be approx. $500. If she retires at age 60 with 20 more years of max earnings, her age-60 CPP would be approx. $680.

As to the value of one year of max earnings, I have said that it is approx. $25 but that is for estimating only and as Spudd says that applies to an age-65 CPP only. The actual figure for an age-65 CPP in 2015 is $27.30, based on using your best 39 years of earnings at age 65. At age 60, you use your best 34.86 years, so that value changes to $30.55 before the 36% reduction for taking it early or $19.55 after the 36% reduction factor.


----------



## gibor365

Thanks Dogger,
To confirm that i understood correctly....
So, if she retires now (at 40 with 15 year of max) and:
- starts getting CPP at 60 , she gonna get 15 x 19.55 = $293
- starts getting CPP at 65 , she gonna get 15 x 27.3 = $409

Correct?


----------



## Dogger1953

gibor said:


> Thanks Dogger,
> To confirm that i understood correctly....
> So, if she retires now (at 40 with 15 year of max) and:
> - starts getting CPP at 60 , she gonna get 15 x 19.55 = $293
> - starts getting CPP at 65 , she gonna get 15 x 27.3 = $409
> 
> Correct?


gibor - You understand correctly! These figures are all in 2015 dollars of course, so her actual amounts will be higher based on the 5-year average YMPE ending with the year that her pension starts.


----------



## gibor365

> will be higher based on the 5-year average YMPE ending with the year that her pension starts


 Is it higher or lower than inflation?

If I contributed to CPP 50% of maximum for 2 years, can I count this as 1 max year?


----------



## Dogger1953

gibor said:


> Is it higher or lower than inflation?
> 
> If I contributed to CPP 50% of maximum for 2 years, can I count this as 1 max year?


The YMPE is indexed to wage increases, so it can be higher or lower (or the same) as inflation.

Yes, 2 years of 50% max are equivalent to 1 max year.


----------



## gibor365

> The YMPE is indexed to wage increases, so it can be higher or lower (or the same) as inflation.


 I checked historic data
http://www.jea.ca/rates/ympe-ybe.html and http://www.inflation.eu/inflation-rates/canada/historic-inflation/cpi-inflation-canada.aspx

For last 33 years, average inflation 2.708 and average YMPE growt is 3.685


----------



## investment101CA

*Cpp*

I want to know that is that option to contribute to CPP if we are self employed.




www.understandinginvestment.com


----------



## Sylvie200

*how much CPP to expect at 60*

hi, just found this website and I have a question, I retired at 50 and I am now 58 (June) I contributed for 30 years and have Maximum for 15 of those. 
website tells me to expect $477 if I take CPP at 60. is that what I should expect?

thanks


----------



## Dogger1953

Sylvie200 said:


> hi, just found this website and I have a question, I retired at 50 and I am now 58 (June) I contributed for 30 years and have Maximum for 15 of those.
> website tells me to expect $477 if I take CPP at 60. is that what I should expect?
> 
> thanks


Sylvie - Your actual CPP at age 60 will decrease to about $454 (in 2015 dollars), due to your 2 additional years of zero earnings. If you raised any children however, it could be more than that due to the child-rearing dropout provision.


----------



## gibor365

My mom asked me how much she gonna get total OAS/GIC, and I'm not sure...
As per service canada website, we get numbers below:
Yearly Income (excluding OAS Pension and GIS) : $9,960.00 - $9,983.99 
Monthly GIS with Maximum OAS Pension: $298.01 
Combined Monthly OAS Pension and GIS: $862.88

But she cannot get OAS Maximum as she lived in Canada only 10 years. Will she still get Combined Monthly OAS Pension and GIS: $862.88 (meaning her OAS will be less, but GIS will be more to maintain 862.88)?


----------



## Dogger1953

gibor said:


> My mom asked me how much she gonna get total OAS/GIC, and I'm not sure...
> As per service canada website, we get numbers below:
> Yearly Income (excluding OAS Pension and GIS) : $9,960.00 - $9,983.99
> Monthly GIS with Maximum OAS Pension: $298.01
> Combined Monthly OAS Pension and GIS: $862.88
> 
> But she cannot get OAS Maximum as she lived in Canada only 10 years. Will she still get Combined Monthly OAS Pension and GIS: $862.88 (meaning her OAS will be less, but GIS will be more to maintain 862.88)?


gibor - Assuming that your mother is now single, yes she will get more GIS so that her total OAS/GIS is $862.88 per month.


----------



## gibor365

Thanks Dogger!

One more question...
If I retire at 55 (than I will have 19 years of max contributions to CPP), it's better to start receiving CPP at 60 or 65?


----------



## Dogger1953

gibor said:


> Thanks Dogger!
> 
> One more question...
> If I retire at 55 (than I will have 19 years of max contributions to CPP), it's better to start receiving CPP at 60 or 65?


gibor - If you only have 19 years of max contributions, your average lifetime earnings and thus your "calculated retirement pension" will decrease if you wait until after age 60 to start your CPP, but you'll get a higher %. Regardless though, the answer to your question depends on how long you're going to live.


----------



## cashinstinct

Not Dogger, but if you retire early and take CPP at 65, it's 10 years of no contributions to CPP from 55 to 65.

IF you take CPP at 60, it's 5 years of no contributions from 55 to 60.

Therefore, calculation should be in favor or taking CPP at 60.


----------



## Dogger1953

cashinstinct said:


> Not Dogger, but if you retire early and take CPP at 65, it's 10 years of no contributions to CPP from 55 to 65.
> 
> IF you take CPP at 60, it's 5 years of no contributions from 55 to 60.
> 
> Therefore, calculation should be in favor or taking CPP at 60.


Not if you live a long time. The CPP at age 65 will always be more than the CPP at age 60 (even with the 5 extra years of zero earnings).


----------



## Joelynne

*CPP credit splitting*



Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


Hi, I have a question that I can't find an answer to anywhere. My husband is applying for early CPP at 62. His former spouse has not
requested a credit split which she would be entitled to- we expect my husband would lose a fair bit of his pension if she requests it.

We would like to know if he starts receiving his pension without the credit split applied & then she puts in a request in the future, will 
any adjustment to his pension amount be backdated- leaving us with a payback to CPP- or will it only apply going forward from the time
she initiates it.

Thanks in advance


----------



## Dogger1953

Joelynne said:


> Hi, I have a question that I can't find an answer to anywhere. My husband is applying for early CPP at 62. His former spouse has not
> requested a credit split which she would be entitled to- we expect my husband would lose a fair bit of his pension if she requests it.
> 
> We would like to know if he starts receiving his pension without the credit split applied & then she puts in a request in the future, will
> any adjustment to his pension amount be backdated- leaving us with a payback to CPP- or will it only apply going forward from the time
> she initiates it.
> 
> Thanks in advance


Joelynne - A CPP credit split would affect the amount of any benefits starting the month following receipt of the credit split application, so it would not create a large overpayment if your husband applies for his CPP now.


----------



## Joelynne

Dogger1953 said:


> Joelynne - A CPP credit split would affect the amount of any benefits starting the month following receipt of the credit split application, so it would not create a large overpayment if your husband applies for his CPP now.


Thank you so much!


----------



## DennyO

*CPP survivor pension*

I took the CPP at age 60, and it was the maximum possible, but of course reduced, by 33% as I recall. It stands at $704 per month now. My wife will take her CPP at age 65, but it will be small, about $400 per month. What is the spousal pension situation after age 65 if I predecease my wife? And, vice-versa?


----------



## Dogger1953

DennyO said:


> I took the CPP at age 60, and it was the maximum possible, but of course reduced, by 33% as I recall. It stands at $704 per month now. My wife will take her CPP at age 65, but it will be small, about $400 per month. What is the spousal pension situation after age 65 if I predecease my wife? And, vice-versa?


Denny - As a rough estimate, if your wife dies first you would receive a combined retirement/survivor's benefit of approx. $817.50. If you die first, she would receive a combined retirement/survivor's pension of approx. $843. 

If you want to understand these numbers better, read this article: http://retirehappy.ca/cpp-survivor-benefits/


----------



## Rebecca

I thought that the partner who already was receiving the max, couldn't receive anything more from a spouse who pre-deceased them. Is it really possible to receive more than the maximum by adding a survivor benefit? We have been making our retirement presumptions based on the max being the max, and that no survivor pension would be added on top.


----------



## Dogger1953

Rebecca said:


> I thought that the partner who already was receiving the max, couldn't receive anything more from a spouse who pre-deceased them. Is it really possible to receive more than the maximum by adding a survivor benefit? We have been making our retirement presumptions based on the max being the max, and that no survivor pension would be added on top.


Rebecca - The combined benefit formulas are quite complex, and many people have the same understanding as you. That's the reason that I wrote that article for the Retire Happy website. If you start your CPP retirement pension at age 65, it's almost as straightforward as you suggest. But if you start your CPP earlier or later than age 65, it's not that straightforward. If you want me to help you with your specific numbers, email me at [email protected]


----------



## JC5

Hi there.

I am a 27 year old about to move to China permanently. However, I will maintain "tax residence" in Canada. My employers will be Chinese and obviously not paying for CPP.

Am I allowed to make contributions to the CPP? Do I make the 5% or 10%? As mentioned, I am an employee but my employer is not Canadian and will not contribute. When I do make the contributions, am I penalized in any way for not living in Canada (like with the OAS, where I will receive 9/40ths of the amount) or will I get the average $600/month pension?


----------



## Rebecca

Dogger1953 said:


> Rebecca - The combined benefit formulas are quite complex, and many people have the same understanding as you. That's the reason that I wrote that article for the Retire Happy website. If you start your CPP retirement pension at age 65, it's almost as straightforward as you suggest. But if you start your CPP earlier or later than age 65, it's not that straightforward. If you want me to help you with your specific numbers, email me at [email protected]


Dogger, that's very good to know. My husband took his at 61, and everything that we'd read (on the government site and on your Retire Happy website), seemed to indicate that if you had the maximum, whether or not you were 65, that was the most that you could ever receive. Clearly, we misread your information, but are thrilled to hear that if I pass first, his pension amount *can* improve! 

Thanks so much for that information, and hopefully other members will be newly enlightened too.


----------



## Dogger1953

JC5 said:


> Hi there.
> 
> I am a 27 year old about to move to China permanently. However, I will maintain "tax residence" in Canada. My employers will be Chinese and obviously not paying for CPP.
> 
> Am I allowed to make contributions to the CPP? Do I make the 5% or 10%? As mentioned, I am an employee but my employer is not Canadian and will not contribute. When I do make the contributions, am I penalized in any way for not living in Canada (like with the OAS, where I will receive 9/40ths of the amount) or will I get the average $600/month pension?


JC5 - I am not an expert on the contributory side of the CPP, as that responsibility lies with Revenue Canada. Having said that, there is (currently) no voluntary aspect to CPP contributions. If you contributed to CPP for all 9 years from age 18 to 27 at the maximum rate, your CPP at age 65 would be approx. $245 monthly. If not, your CPP would be proportionally less than that.


----------



## andyc48

*i would love to understand cpp calculations*



Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


want to learn some more on cpp calculations.


----------



## andyc48

i retired disabled on april 2004 received a disability pension until 65 years on november 21 2013. so on december 2013 automatically recalculated cpp and stated receiving this cpp on december 2013. what drop out rate should they use 15%, 16% or 17% ??


----------



## andyc48

*Cpp*



andyc48 said:


> i retired disabled on april 2004 received a disability pension until 65 years on november 21 2013. so on december 2013 automatically recalculated cpp and stated receiving this cpp on december 2013. what drop out rate should they use 15%, 16% or 17% ??


after receiving disability pension and you turn 65 can you delay and choose a following month ?
example as i turned 65 in november can i ask that they start in january 2014?


----------



## Dogger1953

andyc48 said:


> want to learn some more on cpp calculations.


Andy - To better understand CPP calculations, read this article: http://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/


----------



## Dogger1953

andyc48 said:


> i retired disabled on april 2004 received a disability pension until 65 years on november 21 2013. so on december 2013 automatically recalculated cpp and stated receiving this cpp on december 2013. what drop out rate should they use 15%, 16% or 17% ??


Andy - They should have used the 16% dropout for your conversion to a CPP retirement pension effective Dec 2013. If you tell me what your Nov 2013 disability rate was and what your Dec 2013 retirement rate was, I may be able to confirm that's what they've done.


----------



## Dogger1953

andyc48 said:


> after receiving disability pension and you turn 65 can you delay and choose a following month ?
> example as i turned 65 in november can i ask that they start in january 2014?


Andy - This question was asked previously, and while I've never heard of anyone doing it, you might have been able to cancel your retirement pension within 6 months of Dec 2013 and reapply at a later date, but it's definitely too late to do so now. If the reason for doing so was to qualify for the 17% dropout, I doubt that it would have been worth missing one months payment. Again, if I had your rates as above, I might be able to do an estimate for you.


----------



## jmarks

Dogger - I turned 57 in Sept. 
Including this year I've got 39 years of max. pensionable earnings 1977-2015, plus a small amount for 1976 the year I turned 18.
My employment ends Dec. this year and then I go on Long Term Disability (no more cpp earnings) for some period which is unknown at this point. For argument sake lets say until June 2016 , at which point I would start to draw my DB pension early.

My question is how long can I wait after turning 60 to receive CPP benefits before I start to be negatively impacted, mainly by the drop out period? Can I wait until Oct. 1, 2025 (age 65) and still receive the max. benefit? I'm assuming if I drew CPP anytime before 65 that I would get the max. for my age.

My apologies as this should be easy to figure out using your blog example but my brain isn't cooperating right now.


----------



## Dogger1953

jmarks said:


> Dogger - I turned 57 in Sept.
> Including this year I've got 39 years of max. pensionable earnings 1977-2015, plus a small amount for 1976 the year I turned 18.
> My employment ends Dec. this year and then I go on Long Term Disability (no more cpp earnings) for some period which is unknown at this point. For argument sake lets say until June 2016 , at which point I would start to draw my DB pension early.
> 
> My question is how long can I wait after turning 60 to receive CPP benefits before I start to be negatively impacted, mainly by the drop out period? Can I wait until Oct. 1, 2025 (age 65) and still receive the max. benefit? I'm assuming if I drew CPP anytime before 65 that I would get the max. for my age.
> 
> My apologies as this should be easy to figure out using your blog example but my brain isn't cooperating right now.


jmarks - If you have 39 years of max, your CPP will always be at the maximum for whatever age you start. Congrats!!!


----------



## jmarks

Dogger1953 said:


> jmarks - If you have 39 years of max, your CPP will always be at the maximum for whatever age you start. Congrats!!!


Dogger, Thank you very much for your response, your a gem!


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## avrex

I just wanted to say a quick *thank you* to @Dogger1953.

I noticed another helpful article in the Globe and Mail, this morning.
Your questions about Canada Pension Plan benefits answered.

The expertise you provide the public and the contributions that you bring to this forum are very much appreciated. thanks.


----------



## dubmac

avrex said:


> I just wanted to say a quick *thank you* to @Dogger1953.
> 
> I noticed another helpful article in the Globe and Mail, this morning.
> Your questions about Canada Pension Plan benefits answered.
> 
> The expertise you provide the public and the contributions that you bring to this forum are very much appreciated. thanks.


I saw this too. Also checked out his blog http://retirehappy.ca/
Some excellent resources here.


----------



## photographer777

*Question on survival benefits*

Hi Dogger; How does one figure out what benefits will be left to surviving spouse if you have not taken any CPP yet. I am almost 59 and spouse is almost 53, given a terminal diagnosis of 2 years. Thank you:frown-new:


----------



## Dogger1953

photographer777 said:


> Hi Dogger; How does one figure out what benefits will be left to surviving spouse if you have not taken any CPP yet. I am almost 59 and spouse is almost 53, given a terminal diagnosis of 2 years. Thank you:frown-new:


The amount of your survivor's pension is not affected by whether you have or haven't taken your CPP yet. The amount depends on your "calculated retirement pension", their age and whether or not they're receiving their own CPP at the time. Here is a link to an article that I wrote on the subject of the survivor's pension: http://retirehappy.ca/cpp-survivor-benefits/

If you haven't already done so, I recommend that you apply for a CPP disability pension as soon as possible.


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## KiraFG

This question is for a friend who is too shy to ask it herself. She was divorced after a 20 or so year marriage and has been living common-law (Ontario) for the past few years with someone else. Her ex-husband recently died. He had been collecting CPP and had never remarried legally or otherwise. She is now old enough to apply for CPP and the question came up - is she entitled to CPP survivor benefits or did the divorce block that possibility? (Their daughter paid for the funeral and claimed the one-time death benefit, that's not the issue.)


----------



## Dogger1953

KiraFG said:


> This question is for a friend who is too shy to ask it herself. She was divorced after a 20 or so year marriage and has been living common-law (Ontario) for the past few years with someone else. Her ex-husband recently died. He had been collecting CPP and had never remarried legally or otherwise. She is now old enough to apply for CPP and the question came up - is she entitled to CPP survivor benefits or did the divorce block that possibility? (Their daughter paid for the funeral and claimed the one-time death benefit, that's not the issue.)


Kira - A separated legal spouse can be eligible for a CPP survivor's pension if the deceased isn't in a valid common-law relationship at the time of death, but divorce ends any eligibility to a CPP survivor's pension. Divorce does however create the possibility of her applying for a CPP "credit split", which would equally share their CPP pensionable earnings for the years that they lived together. This will only be an advantage to her though, if her ex-husband's earnings were higher than hers during their relationship.


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## KiraFG

Thanks Dogger, that's what I thought.

Would the CPP "credit split" still be possible now that he's died? His earnings were definitely higher than hers, she was a stay-at-home mom for a long time.


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## Dogger1953

KiraFG said:


> Thanks Dogger, that's what I thought.
> 
> Would the CPP "credit split" still be possible now that he's died? His earnings were definitely higher than hers, she was a stay-at-home mom for a long time.


Kira - Yes, a CPP credit split is still possible after he has died.


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## KiraFG

Thank you so much for the help, Dogger! I'll pass this on to my friend.


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## marina628

My friend moved to Canada from UK in 2001 and will be 60 years old in April.He has made around $70,000 a year since that time and has to work until age 70 because he got a late start in life on a career ,any advice for him on when he should start collecting his CPP?


----------



## Dogger1953

marina628 said:


> My friend moved to Canada from UK in 2001 and will be 60 years old in April.He has made around $70,000 a year since that time and has to work until age 70 because he got a late start in life on a career ,any advice for him on when he should start collecting his CPP?


marina - I would recommend that he wait until age 70 to apply for his CPP, because these next 10 years of maximum contributions will significantly increase his rate, both due to his higher average lifetime earnings and due to the age-adjustment factor. I'd also recommend that he wait until age 70 before he applies for his OAS.


----------



## johnnysvera

Dogger1953- Im currently investing into my CPP through DC (Defined Contribution). Im coming up to my 10 years now and have the option to move to DB. Thinking about moving to DB to put the onus on the company so I dont have to worry about investing it myself.

Thoughts?


----------



## Spudd

CPP is Canada Pension Plan - the one administered by the government. What you're talking about is your company pension plan - you might want to start a new thread to get input on this.


----------



## Eclectic12

Are you sure you are not confusing CPP with a company pension?

As I understand it:


> With very few exceptions, every person over the age of 18 who works in Canada outside of Quebec and earns more than a minimum amount ($3,500 per year) must contribute to the Canada Pension Plan (CPP). If you have an employer, you pay half the required contributions and your employer pays the other half. If you are self-employed, you make the whole contribution.


http://www.servicecanada.gc.ca/eng/services/pensions/cpp/contributions/index.shtml

AFAICT ... there is no choice for DC or DB. There is also no choice for investments as the Canada Pension Plan Investment Board makes all the decisions on what to invest in, when to sell etc.


A company setup pension, on the other hand, can be DC or DB or a hybrid.


Cheers


----------



## Dogger1953

johnnysvera said:


> Dogger1953- Im currently investing into my CPP through DC (Defined Contribution). Im coming up to my 10 years now and have the option to move to DB. Thinking about moving to DB to put the onus on the company so I dont have to worry about investing it myself.
> 
> Thoughts?


What Spud and Eclectic said!


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## MarkB

Hello Dogger, 
I joined the Canadian Forces at age 17 and served for 22 years, retiring in 1995. Since that time I have received a monthly pension through the CFSA. When I turn 65, (or I guess when ever I elect to take my CPP), the government will claw back from my military pension, the amount equal to what my CPP payment would be. Would it be of any benefit to take my CPP at age 60 or would it make matters worse than waiting until 65? I will be turning 60 next year.

Thank you


----------



## MarkB

I should also mention I have been working steady in a civilian job since retiring from the Forces.


----------



## Dogger1953

MarkB said:


> Hello Dogger,
> I joined the Canadian Forces at age 17 and served for 22 years, retiring in 1995. Since that time I have received a monthly pension through the CFSA. When I turn 65, (or I guess when ever I elect to take my CPP), the government will claw back from my military pension, the amount equal to what my CPP payment would be. Would it be of any benefit to take my CPP at age 60 or would it make matters worse than waiting until 65? I will be turning 60 next year.
> 
> Thank you


Mark - Your CSFA pension includes what they call a "bridge benefit" which will end when you turn 65 regardless when you take your CPP. The amount of the bridge is based on a set formula, and is not directly linked to the amount of your CPP. What I recommend that you do is contact your CFSA office to determine approximately how much your military pension will decrease when you turn age 65. Then determine how much your CPP will be at the various ages of 60 thru 70 and decide when to apply for your CPP based on those numbers.


----------



## MarkB

Thanks so much for the reply Dogger. Great advice.


----------



## curiouswife57

*?????*

My husband wants to add me to his cpp disability will his check increase and will he lose any of his benefits that he is getting now?


----------



## Dogger1953

curiouswife57 said:


> My husband wants to add me to his cpp disability will his check increase and will he lose any of his benefits that he is getting now?


I'm not really sure what you mean by "wants to add me to his CPP disability", but the amount of his CPP disability pension is in no way affected by having a spouse. If you mean that he wants you to receive his survivor's pension if/when he dies, he simply has to either marry you or live in a common-law relationship with you.


----------



## curiouswife57

*????*

I went to an appointment on Friday to welfare and they told me that they are cutting me off and not helping me ever again so long as i am living with my boyfriend, she then told me that he needed to add me to his check


----------



## Dogger1953

curiouswife57 said:


> I went to an appointment on Friday to welfare and they told me that they are cutting me off and not helping me ever again so long as i am living with my boyfriend, she then told me that he needed to add me to his check


As mentioned in my previous reply, the amount of your husband/boyfriend's CPP disability pension isn't affected (up or down) based on whether he's single, married or common-law, so there is no such thing as adding you to his CPP cheque.


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## habsfan59

Good day Marc, 
I am sitting in a similar position as you...!
If you want some "figures" to play with you can refer to the DPS 4 Form B-2 that you should have received when you left DND (DPS= Director Pension Service). The last entry in the form/report is the calculation of "bridge amount benefits" that will disappear once you are 65 yrs old. Bare in mind that the Bridge Benefits amount is also indexed at the same rate as your basic pension amount. Also, you can refer to your annual CFPA statement sent to you early in Jan of each year (for a more accurate amount). Hope this helps.


----------



## dadaswell

*CPP now or later? Sick leave payout?*

Just starting to think about all of this...maybe a little later than I should have.
Retiring at 60 in Dec with a DB pension of approx $61000/yr gross
Sick leave payout of approx $51,000 gross
No $$ in saving or RSP's, but I own my home.
Currently, my wife makes about $20,000 gross, but will be entitled to a DB pension plan at a similar amount to mine...probably will take in the next 1-3 years.
We still have two dependant children who plan to pursue post secondary education,

Questions:
Do I take CPP at 60?
Do I put sick leave payout in RSP, or take it now?

I'm trying to evaluate all of this from a tax perspective now and onward. For interest sake lets assume I don't "need" the $$ from CPP or sick payout....just trying to figure out the best overall tax scenerio for me and my family. Really confused by all of this!


----------



## OnlyMyOpinion

I don't want to hijack *"Do I take CPP at 60?"*, but you also asked about putting sick leave into RRSP - you don't mention TSFA's - are they max'd out? or RESP is it max'd out? 
I don't necessarily see the need to have an RRSP given two generous DB's in the family, the ability to reduce/defer annual taxes from work income is nearly gone, and you only have 11 years before RRIF w/d.


----------



## Dogger1953

dadaswell said:


> Just starting to think about all of this...maybe a little later than I should have.
> Retiring at 60 in Dec with a DB pension of approx $61000/yr gross
> Sick leave payout of approx $51,000 gross
> No $$ in saving or RSP's, but I own my home.
> Currently, my wife makes about $20,000 gross, but will be entitled to a DB pension plan at a similar amount to mine...probably will take in the next 1-3 years.
> We still have two dependant children who plan to pursue post secondary education,
> 
> Questions:
> Do I take CPP at 60?
> Do I put sick leave payout in RSP, or take it now?
> 
> I'm trying to evaluate all of this from a tax perspective now and onward. For interest sake lets assume I don't "need" the $$ from CPP or sick payout....just trying to figure out the best overall tax scenerio for me and my family. Really confused by all of this!


dadaswell - I can only suggest that you ensure that you have accurate numbers for your CPP choices. If you currently have less than 39 years of maximum earnings, then your "calculated CPP retirement pension" will decrease if you wait until age 65 to start receiving your CPP. I refer to this situation as receiving a larger slice of a smaller pie, by waiting to receive your CPP at age 65. You will likely still receive more pie by waiting, but not as much more as you would if your pie stayed the same size.


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## RBull

dadaswell, very nice numbers. Must be government employment! 

Is there a bridge clause for your pensions?

Is your sick leave eligible as non taxable type of severance?

If not can it be paid in installments vs lump sum and is it eligible for contribution to TFSA?


----------



## dadaswell

OnlyMyOpinion said:


> I don't want to hijack *"Do I take CPP at 60?"*, but you also asked about putting sick leave into RRSP - you don't mention TSFA's - are they max'd out? or RESP is it max'd out?
> I don't necessarily see the need to have an RRSP given two generous DB's in the family, the ability to reduce/defer annual taxes from work income is nearly gone, and you only have 11 years before RRIF w/d.


No savings of any kind...well except about $24000 in RESP's. We are in line to keep up the contributions in order to max out the gov't grants.
No TFSA.

Wondering about the sick leave payout going straight into an RSP as it is the only way to avoid a big chunk of tax being removed off the top...it would be taxed at withdrawal.


----------



## dadaswell

RBull said:


> dadaswell, very nice numbers. Must be government employment!
> 
> Is there a bridge clause for your pensions?
> 
> Is your sick leave eligible as non taxable type of severance?
> 
> If not can it be paid in installments vs lump sum and is it eligible for contribution to TFSA?


Yes, pension will be reduced at 65 by the amount of CPP I would be eligible for if I waited until 65 to collect.

I think sick leave payout is considered as straight income...taxable of course.

Even if it went straight to a TFSA, wouldn't it be still taxed as income when my employer paid it to me?

Has to be lump sum payment, but I believe it can be divided....eg: some to RSP and some as cash income.


----------



## dadaswell

RBull said:


> dadaswell, very nice numbers. Must be government employment!
> 
> Is there a bridge clause for your pensions?
> 
> Is your sick leave eligible as non taxable type of severance?
> 
> If not can it be paid in installments vs lump sum and is it eligible for contribution to TFSA?


And yes, government employment. The two of us just followed out passions regarding our careers 30 years ago. We were too young and stupid at the time to even realize what a pension was or how fortunate we would end up being. Just to show how ignorant....my wife transferred departments early in her career, not realizing that she was giving up a payout at the end. We figure that loss amounts to about $50,000


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## dadaswell

Dogger1953 said:


> dadaswell - I can only suggest that you ensure that you have accurate numbers for your CPP choices. If you currently have less than 39 years of maximum earnings, then your "calculated CPP retirement pension" will decrease if you wait until age 65 to start receiving your CPP. I refer to this situation as receiving a larger slice of a smaller pie, by waiting to receive your CPP at age 65. You will likely still receive more pie by waiting, but not as much more as you would if your pie stayed the same size.



Hmmmmm...never thought of this, and again...not sure I totally understand. You are saying that if I don't have 39 years in, my CPP decreases if I wait to 65? How does that work?

Thanks! I appreciate the info!!


----------



## RBull

dadaswell said:


> Yes, pension will be reduced at 65 by the amount of CPP I would be eligible for if I waited until 65 to collect.
> 
> I think sick leave payout is considered as straight income...taxable of course.
> 
> Even if it went straight to a TFSA, wouldn't it be still taxed as income when my employer paid it to me?
> 
> Has to be lump sum payment, but I believe it can be divided....eg: some to RSP and some as cash income.


Yes it would be taxed before contributing to a TFSA but not money is withdrawn of course. It would also be taxed before contributing to an RRSP but you may be eligible for a full deduction of the amount you contribute. Check your CRA assessment to confirm available RRSP contribution room. Your future tax rate if you withdraw it over time -say 5 years added to your pension should be lower than your working tax rate. However, you'll need to think about your income from CPP at either 60 or 65 and also OAS kicking in at 65 raising your income. TFSA withdrawals don't count as income.

It might be worth it for you to see an accountant specializing in tax to get some advice and look at a few different scenarios, along with considering your wife's upcoming retirement/income and her situation.


----------



## dadaswell

Dogger1953 said:


> dadaswell - I can only suggest that you ensure that you have accurate numbers for your CPP choices. If you currently have less than 39 years of maximum earnings, then your "calculated CPP retirement pension" will decrease if you wait until age 65 to start receiving your CPP. I refer to this situation as receiving a larger slice of a smaller pie, by waiting to receive your CPP at age 65. You will likely still receive more pie by waiting, but not as much more as you would if your pie stayed the same size.



My last pension estimate from my pension provider says that my pension will be "less the bridge benefit at age 65".... which they say 
is annually $10324 (monthly $860).

I just assumed from this that if I take my CPP at 60 then the $860/month will be reduced by 36% and therefore be $563 instead. Meaning of course that when I turn 65 my income will be about $300 less per month than it could have been. Then again, OAS kicks in.

Still trying to figure out what is best re the combination of CPP and sick leave payout.

Maybe take CPP at 60 and see if income splitting is time in effect this year. Since my wife only makes $20,000, wouldn't I be able to transfer up to $50,000 of income to her? Thinking this.....$115,000 is my gross income for 2016, ($20,000 for her). If I took $25,000 of my sick leave gratuity as income this year (and put other $26,000 of it into an RSP) that would make my 2016 total income $140,000. Transfer $50,000 to her at income tax time....we'd both be under the $90,000 regarding tax brackets for 2016. This is probably the tax bracket we will always be in, so it is the one I am trying to target, rather than having a chunk of the gratuity taxed at a higher rate. This is just guessing on my part...I really don't know a lot about it...just trying to piece it all together.


----------



## dadaswell

RBull said:


> Yes it would be taxed before contributing to a TFSA but not money is withdrawn of course. It would also be taxed before contributing to an RRSP but you may be eligible for a full deduction of the amount you contribute. Check your CRA assessment to confirm available RRSP contribution room. Your future tax rate if you withdraw it over time -say 5 years added to your pension should be lower than your working tax rate. However, you'll need to think about your income from CPP at either 60 or 65 and also OAS kicking in at 65 raising your income. TFSA withdrawals don't count as income.
> 
> It might be worth it for you to see an accountant specializing in tax to get some advice and look at a few different scenarios, along with considering your wife's upcoming retirement/income and her situation.


Loads of room in RSP, so yeas, I think eligible for a full deduction....never contributed to an RSP before...ex-wife saw to that with all her spending...also why I have no savings (and an exwife...LOL). So glad my second wife is not like this!

Maybe a window of opportunity for payout with tax splitting if still allowed....see my most recent posts. My current wife has a very small taxable income for the next 1-3 years. I think if I put it in an RSP I can't touch it for 3 years or something without engaging penalties.


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## Dogger1953

dadaswell said:


> Hmmmmm...never thought of this, and again...not sure I totally understand. You are saying that if I don't have 39 years in, my CPP decreases if I wait to 65? How does that work?
> 
> Thanks! I appreciate the info!!


CPP calculations are a bit complicated, but here's a couple of links to articles that explain it fully:
http://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/ 
http://retirehappy.ca/understanding-cpp-statement-contributions-soc/


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## dadaswell

Dogger1953 said:


> CPP calculations are a bit complicated, but here's a couple of links to articles that explain it fully:
> http://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/
> http://retirehappy.ca/understanding-cpp-statement-contributions-soc/


Thanks for those....I'll have a look.

Maybe you know the answer to another question I have. I got divorced a number of years ago, ad our CPP credits were split (I think that's what it was called). Anyhow, how will I know how this will actually affect my CPP. How to I factor this in to my calculations?

Thanks a ton for your help!


----------



## RBull

dadaswell said:


> Loads of room in RSP, so yeas, I think eligible for a full deduction....never contributed to an RSP before...ex-wife saw to that with all her spending...also why I have no savings (and an exwife...LOL). So glad my second wife is not like this!
> 
> Maybe a window of opportunity for payout with tax splitting if still allowed....see my most recent posts. My current wife has a very small taxable income for the next 1-3 years. I think if I put it in an RSP I can't touch it for 3 years or something without engaging penalties.


Income splitting works with qualified pension income but I'm not sure you're going to find another way to otherwise split your working incomes. To me being able to split the sick leave depends on the question -is it working income (I think it is) or is it pension, or is it a retiring allowance that might be eligible for contribution directly to RRSP(probably not though). Why not ask your employer? If you can split it seems like a good idea. You could withdraw the RRSP starting in the next tax year. When you withdraw taxes are withheld at source and you reconcile any difference at tax filing time. 

You could also establish an RRIF where the money would be paid out systematically according to a minimum formula, or more if you want. If using minimum withdrawals no tax is withheld at source like it is for an RRSP. I have provided some links that should help answer questions. Dogger1953 does the CPP calculations for you for a small fee if you can't figure it out from the links he attached. You will need to have your statement of contributions for any of this. 

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html

http://www.cra-arc.gc.ca/gncy/bdgt/2015/qa02-eng.html

Tax tips is a great resource too and an easy place to do some mock tax scenarios.

http://www.taxtips.ca/calculators/canadian-tax/canadian-tax-calculator.htm

Good luck. Oh, and congratulations despite your 1st wife on heading towards what is going to be a very comfortable retirement.


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## dadaswell

RBull said:


> Income splitting works with qualified pension income but I'm not sure you're going to find another way to otherwise split your working incomes. To me being able to split the sick leave depends on the question -is it working income (I think it is) or is it pension, or is it a retiring allowance that might be eligible for contribution directly to RRSP(probably not though). Why not ask your employer? If you can split it seems like a good idea. You could withdraw the RRSP starting in the next tax year. When you withdraw taxes are withheld at source and you reconcile any difference at tax filing time.
> 
> You could also establish an RRIF where the money would be paid out systematically according to a minimum formula, or more if you want. If using minimum withdrawals no tax is withheld at source like it is for an RRSP. I have provided some links that should help answer questions. Dogger1953 does the CPP calculations for you for a small fee if you can't figure it out from the links he attached. You will need to have your statement of contributions for any of this.
> 
> http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/rrsps-eng.html
> 
> http://www.cra-arc.gc.ca/gncy/bdgt/2015/qa02-eng.html
> 
> Tax tips is a great resource too and an easy place to do some mock tax scenarios.
> 
> http://www.taxtips.ca/calculators/canadian-tax/canadian-tax-calculator.htm
> 
> Good luck. Oh, and congratulations despite your 1st wife on heading towards what is going to be a very comfortable retirement.


Thank you so much for all of this!!! I will have a look through it all, and see what I can figure out.

Maybe I am wrong, but I thought that families with kids were allowed to split their income (not pension income) on their income taxes last year (transferring a max of $50,000 to the lower income spouse), and that the Liberals are now threatening to take that tax break away.

Comfortable retirement....you're right....we are very lucky to have what we will, and we know it. Lucky because it is solid and actually there. And lucky, because as I said before, when each of us started out in our careers, we had no idea what a pension was or that we even had one.....pretty bad, I know. 

I can see that I also need to make myself more familiar with RSP withdrawal rules. I thought there was a minimum amount of time the money had to be in to avoid penalties at withdrawal.


----------



## Dogger1953

dadaswell said:


> Thanks for those....I'll have a look.
> 
> Maybe you know the answer to another question I have. I got divorced a number of years ago, ad our CPP credits were split (I think that's what it was called). Anyhow, how will I know how this will actually affect my CPP. How to I factor this in to my calculations?
> 
> Thanks a ton for your help!


dadaswell - If your CPP credits have already been split, your CPP statement of contributions (SOC) will clearly show the initials "CS" for any year that was split. This is already taken into consideration in the SOC estimates, although those estimates don't consider that you might have zero earnings for the next 5 years.


----------



## dadaswell

Dogger1953 said:


> dadaswell - If your CPP credits have already been split, your CPP statement of contributions (SOC) will clearly show the initials "CS" for any year that was split. This is already taken into consideration in the SOC estimates, although those estimates don't consider that you might have zero earnings for the next 5 years.


Thanks for the info! I never realized that I would have to consider the 5 years between 60 and 65 as non-earning years....thanks for pointing that out!


----------



## RBull

dadaswell said:


> Thank you so much for all of this!!! I will have a look through it all, and see what I can figure out.
> 
> Maybe I am wrong, but I thought that families with kids were allowed to split their income (not pension income) on their income taxes last year (transferring a max of $50,000 to the lower income spouse), and that the Liberals are now threatening to take that tax break away.
> 
> Comfortable retirement....you're right....we are very lucky to have what we will, and we know it. Lucky because it is solid and actually there. And lucky, because as I said before, when each of us started out in our careers, we had no idea what a pension was or that we even had one.....pretty bad, I know.
> 
> I can see that I also need to make myself more familiar with RSP withdrawal rules. I thought there was a minimum amount of time the money had to be in to avoid penalties at withdrawal.


You're welcome. 

I forgot about you having the kids. Easy for me since I don't have any. If they're considered dependents maybe that is an angle you can use.

That's the way it is with lots of folks and it makes a strong argument for forced retirement savings of some sort beyond current CPP. I had only a small defined contribution pension for about 10 years of my career. Fortunately I saved my own money since age 22 and it allowed me to retire at age 55, and my wife had benefit of a DB pension she took at an early age with penalty.


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## marina628

I just wanted to take a minute and thank Dogger1953 for all his contributions and help he provides ,it is nice to see a genuine person around helping people these days.


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## wendi1

He is a sweetie, no doubt. To Dogger!


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## Rebecca

I'll third that. Thanks, Dogger!


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## Dogger1953

Thanks for all of your kind words  and keep those questions coming.


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## dadaswell

Totally agree with the above comments. Dogger and the rest of you have given me a lot to think about. You are all very generous with your time and knowledge! Thank you, thank you, thank you!!

I am new to this site and have to say that I really like what I see. Hopefully I will be able to contribute a few things without just asking questions all the time..LOL!


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## dadaswell

RBull said:


> You're welcome.
> 
> That's the way it is with lots of folks and it makes a strong argument for forced retirement savings of some sort beyond current CPP.


Good point! Honestly, if it wasn't for our pensions, we would probably be in a lot of trouble as we had absolutely no financial sense, or training at all in regards to planning for retirement. Other than trying to not just blowing money all over the place, and working hard to pay off our mortgage really fast, we've really been out to lunch so to speak!


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## michaelman501

Just a quick question(asking for a family member)He is 54 currently and turning 55 in April. He plans on retiring in April on his 55th birthday. He applied to the service canada website to see an estimate of what he would receive for his CPP payments. The service canada site says that if he was 65 today he would receive 1092$ per month. Now as far as i know this is almost the maximum amount ? Does this mean that he has almost maxed out his CPP contributions and there is no point in continuing to contribute to CPP when he retires ? As i said he is retiring at 55 and his probably going to take CPP early at 60. Is it a requirement to continue contributing until you take CPP ? Or once he retires can he stop contributing? Thanks in advance.

Michael


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## Dogger1953

michaelman501 said:


> Just a quick question(asking for a family member)He is 54 currently and turning 55 in April. He plans on retiring in April on his 55th birthday. He applied to the service canada website to see an estimate of what he would receive for his CPP payments. The service canada site says that if he was 65 today he would receive 1092$ per month. Now as far as i know this is almost the maximum amount ? Does this mean that he has almost maxed out his CPP contributions and there is no point in continuing to contribute to CPP when he retires ? As i said he is retiring at 55 and his probably going to take CPP early at 60. Is it a requirement to continue contributing until you take CPP ? Or once he retires can he stop contributing? Thanks in advance.
> 
> Michael


Michael - Here's a link to an article that explains how Service Canada's estimate is calculated: http://retirehappy.ca/understanding-cpp-statement-contributions-soc/ 

The maximum CPP for 2016 is indeed $1,092.50. if his current age-65 estimate is $1,092, that means that he has at least 31 years of max or near-max earnings out of his current 37 year contributory period. If that's all that he has, his age-65 amount could decrease to as low as $967.20 by the time he reaches age 60 and he would get 64% of that amount = $619.00. However, if he currently has 35 or more years of max or near-max earnings, his age-65 amount would remain at $1,092 when he reaches age 60 and he would get 64% of that amount = $655.50.

As far as contributing after he retires, you can only contribute to CPP if you have salary or self-employed earnings. If he has no such earnings, he can't make any further CPP contributions.


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## jacofan

I read and reread your website articles and it still gets me a bit confused about extrapolating from what the statement says now to what it could be 10 years later at 65. BUT it is LESS confusing thanks to you Dogger1953!!.

Would it be true to say that if a person maxed out their CPP contributions for 39 years - no matter when those 39 years took place up to age 65 - that they will get the max? So if from age 19 to age 58 then even if that person retired at 58 and never contributed again, they would get the max? My goal is just to get to that magic 39 max years number before I'm 60.

Would I ask my employer to stop deducting CPP after I reach 39 years maxed out?

thanks again for all your advice, input.


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## Dogger1953

jacofan said:


> I read and reread your website articles and it still gets me a bit confused about extrapolating from what the statement says now to what it could be 10 years later at 65. BUT it is LESS confusing thanks to you Dogger1953!!.
> 
> Would it be true to say that if a person maxed out their CPP contributions for 39 years - no matter when those 39 years took place up to age 65 - that they will get the max? So if from age 19 to age 58 then even if that person retired at 58 and never contributed again, they would get the max? My goal is just to get to that magic 39 max years number before I'm 60.
> 
> Would I ask my employer to stop deducting CPP after I reach 39 years maxed out?
> 
> thanks again for all your advice, input.


Jacofan - Yes, if you have 39 full years of max CPP earnings/contributions, you are guaranteed a maximum pension at any age. I say full years, because you can't count the year that you turned 18 as a full year even if it shows as "M" on your SOC, unless you were born in December.

Unfortunately, your employer can't stop deducting CPP even once you have made 39 years of max contributions. Even though any additional contributions you do make won't increase your own CPP, you must continue to contribute on any employment earnings up to at least age 65 even if you apply for your CPP as early as age 60 (in which case you would earn PRBs). You only get to choose to stop contributing if you're over age 65 and receiving your CPP.


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## jacofan

ok, now I'm clear with it now!! Thx so much for being patient with my many questions. I think I finally get it now! :rugby:


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## jacofan

Hi Dogger!

Do you think it's in the realm of possibility that the gov't would look at reducing the CPP penalties on early withdrawls? I was reading that the CPP returns have been very good at the plan is very well funded. I know gov't rarely gives much back that they take away but do you think there's a chance of seeing CPP sweetened any over the next 5-10 years?


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## jargey3000

Hi Dogger - "da wife" turns 60 in February. We didn't seem to get any notice of what her CPP payment would be at 60, so we phoned them a while back & gave the info. & the agent say she would be entitled to about $120 a month. She's been a stay-at-home mom since about 1980, when our first child (of 2) was born. Does this amt. seem about right to you? I was hoping it'd be a bit more... Let me know if you need more info. Thanks in advance.


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## Dogger1953

jacofan said:


> Hi Dogger!
> 
> Do you think it's in the realm of possibility that the gov't would look at reducing the CPP penalties on early withdrawls? I was reading that the CPP returns have been very good at the plan is very well funded. I know gov't rarely gives much back that they take away but do you think there's a chance of seeing CPP sweetened any over the next 5-10 years?


jacofan - No, I don't see that happening as the penalties have just recently been increased and life expectancy is continually increasing.


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## Dogger1953

jargey3000 said:


> Hi Dogger - "da wife" turns 60 in February. We didn't seem to get any notice of what her CPP payment would be at 60, so we phoned them a while back & gave the info. & the agent say she would be entitled to about $120 a month. She's been a stay-at-home mom since about 1980, when our first child (of 2) was born. Does this amt. seem about right to you? I was hoping it'd be a bit more... Let me know if you need more info. Thanks in advance.


jargey - If she had the equivalent of 5 years of max earnings between 1973 and 1980, and if your two children were born 3 years apart, $120 would be about the right amount for an age-60 CPP retirement pension.


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## jargey3000

D'oh! She did; and they were. you're right on the mark Dogger! thanks!


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## Joewho

Dogger,
I have a question which I have done a Google search for but, possibly because of the rarity of the question, or my own difficulty in phrasing it, I have not found an answer. Is it possible to stop receiving CPP? For instance, start receiving it at 65 and then decide to stop receiving it at say, 67?
thanks joe


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## Dogger1953

Joewho said:


> Dogger,
> I have a question which I have done a Google search for but, possibly because of the rarity of the question, or my own difficulty in phrasing it, I have not found an answer. Is it possible to stop receiving CPP? For instance, start receiving it at 65 and then decide to stop receiving it at say, 67?
> thanks joe


Joe - No, a CPP retirement pension can only be canceled within 6 months of receiving the first payment.


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## lost in space

Saw your article in the Globe and Mail on taking CPP early to get more GIS point 8, can you calculate when to start collecting CPP in order to maximize income? 


thanks


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## RBull

Joewho said:


> Dogger,
> I have a question which I have done a Google search for but, possibly because of the rarity of the question, or my own difficulty in phrasing it, I have not found an answer. Is it possible to stop receiving CPP? For instance, start receiving it at 65 and then decide to stop receiving it at say, 67?
> thanks joe


A most interesting question. Why would you want to to do this?


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## NorthKC

This could be when one realizes that there will be a large influx of income coming in and will push him over to the next tax bracket? I tend to see it a lot for folks who haven't planned their retirement and get the OAS, CPP, and RRSP (or other income) all at once and it's higher than expected.


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## Dogger1953

lost in space said:


> Saw your article in the Globe and Mail on taking CPP early to get more GIS point 8, can you calculate when to start collecting CPP in order to maximize income?
> 
> 
> thanks


LIS - If maximizing your income is your only concern, you're always best to defer your CPP until age 70.


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## lost in space

Dogger1953 said:


> LIS - If maximizing your income is your only concern, you're always best to defer your CPP until age 70.


I was thinking if your eligable for GIS your comment was to take CCP early in order to maximize that. So was wonder at which age maximizes GIS and CPP


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## Dogger1953

lost in space said:


> I was thinking if your eligable for GIS your comment was to take CCP early in order to maximize that. So was wonder at which age maximizes GIS and CPP


LIS - My suggestion of taking your CPP early if you know that you'll be eligible for GIS, wasn't in order to maximize income at age 65. It was because any increase in CPP will be offset by approx. 50% in a decrease in GIS, thereby effectively doubling the "breakeven age" for waiting to take your CPP.


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## lost in space

Looking through your website I've had a bit of a change of heart on whether to take CPP early or not. I always felt it moved the risk from the government to you. Most people would end up spending the money and at retirement end up worse off. But based on your hypothetical situation if you were to take CPP at age 60 and save it by age 65 you’d have around $38,000 in the bank, double that for a couple and by age 70 $65,000 in the bank again double that for a couple. Even better if you put it all in a TFSA you’d still be eligible for the GIS. Of course the key to invest and not spend the money.

BTW sent you an email requesting a quote


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## dadaswell

Hey Dogger1953,
My ex and I have already had our CPP credits split. I am retiring later this year, and will likely take my CPP benefit early. When I die, will she be eligible to apply for CPP survivor benefits from my CPP even though our credits were already split? I hope not. I was under the impression that all CPP implications are wrapped up at this point because of the credit split, and that any survivor benefits would go to my current wife.
HELP!!:upset:


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## Dogger1953

dadaswell said:


> Hey Dogger1953,
> My ex and I have already had our CPP credits split. I am retiring later this year, and will likely take my CPP benefit early. When I die, will she be eligible to apply for CPP survivor benefits from my CPP even though our credits were already split? I hope not. I was under the impression that all CPP implications are wrapped up at this point because of the credit split, and that any survivor benefits would go to my current wife.
> HELP!!:upset:


dadaswell - A survivor's pension could be payable to a separated legal spouse, but not to a divorced legal spouse and not to a separated common-law spouse. So you can rest easy if you have a current wife, as she will receive your survivor's pension.


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## dadaswell

Dogger1953 said:


> dadaswell - A survivor's pension could be payable to a separated legal spouse, but not to a divorced legal spouse and not to a separated common-law spouse. So you can rest easy if you have a current wife, as she will receive your survivor's pension.


Phew! Thank you! You are such a tremendous help to me....and many others obviously!

Finally had a look at my Estimated monthly CPP benefits page on the Service Canada website, and this is what is says:

Shows the years of credit splits.
Says pension if I was 65 today = $1085.38
If taken at 60 = $694.64
If taken at 70 = $1541.24

I will probably take it at 60. 

My understanding is that the $1085.38 if taken @ 65 yrs is assuming that I work to 65. But since I am retiring at 60, this amount would actually be less because I am not contributing from 60 to 65 years of age. Is there an easy way to figure out the amount in this case?

Thanks a ton!!


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## Dogger1953

dadaswell said:


> Phew! Thank you! You are such a tremendous help to me....and many others obviously!
> 
> Finally had a look at my Estimated monthly CPP benefits page on the Service Canada website, and this is what is says:
> 
> Shows the years of credit splits.
> Says pension if I was 65 today = $1085.38
> If taken at 60 = $694.64
> If taken at 70 = $1541.24
> 
> I will probably take it at 60.
> 
> My understanding is that the $1085.38 if taken @ 65 yrs is assuming that I work to 65. But since I am retiring at 60, this amount would actually be less because I am not contributing from 60 to 65 years of age. Is there an easy way to figure out the amount in this case?
> 
> Thanks a ton!!


dadaswell - Your age-65 CPP may decrease as much as approx. $100 if you wait, or it may stay exactly the same. It all depends on your lifetime record of pensionable earnings. Read this article to understand CPP's current estimate: http://retirehappy.ca/understanding-cpp-statement-contributions-soc/


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## dadaswell

Dogger1953 said:


> dadaswell - Your age-65 CPP may decrease as much as approx. $100 if you wait, or it may stay exactly the same. It all depends on your lifetime record of pensionable earnings. Read this article to understand CPP's current estimate: http://retirehappy.ca/understanding-cpp-statement-contributions-soc/


Awesome...that helps a lot! Thanks again


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## Russ

My Mother-in-Law passed away on Jan 2, 2015, and I notified CRA and Service Canada within a week of her passing. She was receiving a CPP survivor's benefit of $450 and the last automatic deposit was at the end of January.

Her 2015 T4(P) shows benefits of $900 - equivalent to two months of benefits. Does that mean her second last payment at the end of December was for January, and the payment at the end of January was for February? Seems odd if that is true because the estate was allowed to keep the January deposit. I tried asking Service Canada but they won't talk to me because I am not an executor.


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## Dogger1953

Russ said:


> My Mother-in-Law passed away on Jan 2, 2015, and I notified CRA and Service Canada within a week of her passing. She was receiving a CPP survivor's benefit of $450 and the last automatic deposit was at the end of January.
> 
> Her 2015 T4(P) shows benefits of $900 - equivalent to two months of benefits. Does that mean her second last payment at the end of December was for January, and the payment at the end of January was for February? Seems odd if that is true because the estate was allowed to keep the January deposit. I tried asking Service Canada but they won't talk to me because I am not an executor.


Russ - No, the payment at the end of January was for January, so the total amount for 2015 should be only $450. Whoever was/is the Executor should ask for an amended T4.


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## Russ

Thanks Dogger. We'll request the amended T4. I expect this may take a while so we'll be sure to make an income tax payment by the end of April even if we can't file on time.

Thanks for all you do.


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## Brian K

I have been looking into taking CPP at 60 or 65. Both my wife and I have contributed the maximums so would each expect the max CPP payments.
Specifics are:
At 60 - We'd get $669.05 each plus any inflation adjustment
At 65 - we'd get $1045.39 each plus inflation adjustment

A wrinkle that I found out about after taking to a Service Canada rep (yes they eventually answer the phone) is that there also is a MAX CPP payment of $1092.50 allowed which is also shown on the SC web site very clearly. 
Since my wife has cancer and will probably pass away sooner than later, I asked about the Survivors benefit. The agent told me that if that was the case we'd be better off taking our pensions at 60 because if we waited till 65, and say we both got max $1045.39, then my wife died, I would get a survivors benefit, but then the Max CPP limit would kick in at $1092 and that is all I would get - so about $50 more because of the survivors benefit. She said that both taking it at 60 would also cause the Max limit to kick in, (my $669 plus the survivors benefit - I forget what that would be) but of course I'd get a much larger portion of the survivor benefit plus the advantage of starting to collect at 60. It is not very clear on the Service Canada web site that Max amount limits kick in due to a survivors benefit payment - she said she recognized that but her info was more accurate. 
Just thought I'd mention this incase it might affect others too.


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## Dogger1953

Brian K said:


> I have been looking into taking CPP at 60 or 65. Both my wife and I have contributed the maximums so would each expect the max CPP payments.
> Specifics are:
> At 60 - We'd get $669.05 each plus any inflation adjustment
> At 65 - we'd get $1045.39 each plus inflation adjustment
> 
> A wrinkle that I found out about after taking to a Service Canada rep (yes they eventually answer the phone) is that there also is a MAX CPP payment of $1092.50 allowed which is also shown on the SC web site very clearly.
> Since my wife has cancer and will probably pass away sooner than later, I asked about the Survivors benefit. The agent told me that if that was the case we'd be better off taking our pensions at 60 because if we waited till 65, and say we both got max $1045.39, then my wife died, I would get a survivors benefit, but then the Max CPP limit would kick in at $1092 and that is all I would get - so about $50 more because of the survivors benefit. She said that both taking it at 60 would also cause the Max limit to kick in, (my $669 plus the survivors benefit - I forget what that would be) but of course I'd get a much larger portion of the survivor benefit plus the advantage of starting to collect at 60. It is not very clear on the Service Canada web site that Max amount limits kick in due to a survivors benefit payment - she said she recognized that but her info was more accurate.
> Just thought I'd mention this incase it might affect others too.


Brian - First, $669.05 is not the max age-60 amount, and $1,045.39 is not the max age-65 amount, so I'd question the accuracy of those numbers. Second, if your wife has cancer and is unable to work, she should apply for CPP disability and not an early retirement pension. Third, although taking your CPP at age 60 may still be the right decision for you, it sounds like you were given very inaccurate info from Service Canada about how the max combined benefit is calculated. Read this article: http://retirehappy.ca/cpp-survivor-benefits/


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## Brian K

Hi Dogger
Thanks for the comments and the link. I guess I was a bit incorrect in assuming my CPP benefits were the max amounts - my assumption. I got these numbers from my account after setting up my Service Canada account so the numbers are actual - as least as accurate as SC estimates I believe. I have been retired since 54 (just turned 60) so perhaps that has reduced my CPP from the max to what they showed. 
We will look into getting a disability pension for my wife. 
Of course the point of my post was to point out the limitations imposed by the Max amount and how that kicks in and affects the amount of survivors benefits I might expect.
Also my FP recommended I take CPP early - because as she points out - you don't know your expiry date.


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## Eclectic12

Brian K said:


> ... I guess I was a bit incorrect in assuming my CPP benefits were the max amounts - my assumption ...
> I have been retired since 54 (just turned 60) so perhaps that has reduced my CPP from the max to what they showed...


According to the link below, retiring at at 54 means that you won't be able to meet the criteria of contributing into CPP for at least 83% of the time that you are eligible to contribute. With the low end age limit being 18, the early age of retirement means you at maximum contributed 36 years ... which is short of the 39 years required.

The second possible issue is that most people early in their working life aren't contributing to the YMPE level.

http://retirehappy.ca/how-much-will-you-get-from-canada/
http://www.thestar.com/business/personal_finance/2013/02/07/cpp_5_things_you_need_to_know.html


Cheers


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## DavidLoveVancouver

Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


Hello, I'm being forced by Provincial Social Services to apply for CPP so that they can "CLAW-BACK" assistance they have paid me for the past 5 months at $615.00 per month. I have signed a release form for them to do so. I am turning 64 this May 30, 2016 and have applied for CPP. QUESTION? Am I entitled to receive my CPP retroactive to age 60 or will my CPP benefits begin upon the date of my CPP application with any retroactive payments to age 60?

Thank you and I look forward to your earliest reply.


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## Mukhang pera

DavidLoveVancouver said:


> QUESTION? Am I entitled to receive my CPP retroactive to age 60 or will my CPP benefits begin upon the date of my CPP application with any retroactive payments to age 60?


Good thing we have a CPP expert on board because to my untrained eye, that question is much too finely nuanced to permit of an answer that would distinguish between the "alternatives". To my pea brain, to speak of receiving "CPP retroactive to age 60" as compared to having CPP benefits "begin upon the date of my CPP application with any retroactive payments to age 60" kinda' looks like a distinction without a difference.



DavidLoveVancouver said:


> I look forward to your earliest reply.


Hope y'er watching CPP expert. Dilatoriness will count against you.


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## twa2w

From the CPP rules
"You can apply a maximum of 12 months before the date you would like your pension to start.

If you are 65 years plus 1 month or older, you can request retroactive payments for a maximum of 11 months, or back to your 65th birthday plus 1 month—whichever is shortest."

Sounds like no retro for you.


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## Dogger1953

DavidLoveVancouver said:


> Hello, I'm being forced by Provincial Social Services to apply for CPP so that they can "CLAW-BACK" assistance they have paid me for the past 5 months at $615.00 per month. I have signed a release form for them to do so. I am turning 64 this May 30, 2016 and have applied for CPP. QUESTION? Am I entitled to receive my CPP retroactive to age 60 or will my CPP benefits begin upon the date of my CPP application with any retroactive payments to age 60?
> 
> Thank you and I look forward to your earliest reply.


Assuming that you applied for a CPP retirement pension (and not a disability pension), there is no retroactivity unless you apply after age 65. Your CPP will therefore be effective the month following the month that your application was received by Service Canada, unless you asked for it to begin at a later date.


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## naysmitj

Hi Dogger, I am a married 66 year old with 39 Maximum contribution years of CPP. I have not applied for CPP yet. A friend advised me to apply ASAP since if I died before collecting, my wife would get nothing from my CPP. If I was collecting CPP and died, then she would get a top up on hers based on my CPP.

Please advise.

Thanks


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## Dogger1953

naysmitj said:


> Hi Dogger, I am a married 66 year old with 39 Maximum contribution years of CPP. I have not applied for CPP yet. A friend advised me to apply ASAP since if I died before collecting, my wife would get nothing from my CPP. If I was collecting CPP and died, then she would get a top up on hers based on my CPP.
> 
> Please advise.
> 
> Thanks


naysmitj - Your friend is dead wrong. The amount of the survivor's pension that your wife will receive will be exactly the same whether you're receiving CPP when you die or not.


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## naysmitj

Thanks very much for the information, much appreciated.

Cheers


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## baker3232

Hi Dogger; hope you can answer a question about a friends circumstances. He plans to retire at 49, in 1 year after 30 years at max CPP contributions. Plans to take CPP at 60, so for the 11 years in between, he will have little to no contributions. Understand he will have a reduction in benefits of 36%, or more if things change over that period. Will the 11 years of minimal contributions, further reduce his benefits, or will they stay where they are regardless of future contributions. Thanks for any clarity you can give me.


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## Mechanic

Hi Dogger, I retired at 55 and am now almost 60. Where do I go to find out what pension I can get at 60 vs waiting till 65. I have asked my accountant in the past if I need to make more cpp contributions but never got an answer. Wife and I have been self employed for many years. Thanks.


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## Itchy54

Hey Mechanic, my husband and I have used this form before and it is great. For question 5 you get options about at what age you retire and when you want to take your CPP.
http://www.servicecanada.gc.ca/fi-if/index.jsp?app=prfl&frm=isp1003&lang=eng


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## Mechanic

Thanks Itchy. I will fill out and send in. I don't remember about family allowance, will see if the wife can recall. Don't see why it would make a difference


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## Dogger1953

baker3232 said:


> Hi Dogger; hope you can answer a question about a friends circumstances. He plans to retire at 49, in 1 year after 30 years at max CPP contributions. Plans to take CPP at 60, so for the 11 years in between, he will have little to no contributions. Understand he will have a reduction in benefits of 36%, or more if things change over that period. Will the 11 years of minimal contributions, further reduce his benefits, or will they stay where they are regardless of future contributions. Thanks for any clarity you can give me.


If your friend takes his CPP at age 60, the 17% dropout will allow him to drop out 86 months of low/zero earnings. This means that his CPP will be based on his best 35 years (approx.). If he has 30 years of max earnings, his CPP at age 60 will be approx. 30/35 x $1,092.50 (max), reduced by 36% = $599.31 (approx.).


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## kcowan

Is there a death benefit calculator on the web?


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## Dogger1953

kcowan said:


> Is there a death benefit calculator on the web?


Not that I'm aware of, but it's simply 6 times the amount of your "calculated retirement pension", subject to a maximum of $2,500. "Calculated retirement pension" means prior to any age-adjustment factor was applied for taking your CPP early or late. If you're not receiving your CPP when you die, it's 6 times the amount of what the SOC estimate shows you would receive "if you were age 65 today" (again, subject to the max of $2,500).


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## baker3232

Thanks for the info Dogger, very helpful.


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## Brian K

Dogger1953 said:


> Brian - First, $669.05 is not the max age-60 amount, and $1,045.39 is not the max age-65 amount, so I'd question the accuracy of those numbers. Second, if your wife has cancer and is unable to work, she should apply for CPP disability and not an early retirement pension. Third, although taking your CPP at age 60 may still be the right decision for you, it sounds like you were given very inaccurate info from Service Canada about how the max combined benefit is calculated. Read this article: http://retirehappy.ca/cpp-survivor-benefits/


Got my first CPP payment of $671.68 at age 60. Retired at 54 with 31 years of maximum contributions, and 7 years of below max earnings in the 70's when I was working as a student. Wife has applied for disability benefits - thanks for that suggestion.


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## kork

Hi Dogger, 

For the last 13 years I've maxed out CPP contributions and for 6 years prior to that I was a student and did contribute to CPP, but with an income of around $10k per year.

If I were to max out my contributions for another 3 years (I'm currently 37 and a total of 16 max years) and then "retire early" and never earn another cent of "working income" what kind of impact would that have when I turn 60 or 65 and start to collect CPP?

I can't seem to find much info overall on "left workforce early - how does it affect CPP?" so any insight would be helpful.


----------



## Dogger1953

kork said:


> Hi Dogger,
> 
> For the last 13 years I've maxed out CPP contributions and for 6 years prior to that I was a student and did contribute to CPP, but with an income of around $10k per year.
> 
> If I were to max out my contributions for another 3 years (I'm currently 37 and a total of 16 max years) and then "retire early" and never earn another cent of "working income" what kind of impact would that have when I turn 60 or 65 and start to collect CPP?
> 
> I can't seem to find much info overall on "left workforce early - how does it affect CPP?" so any insight would be helpful.


Hi kork - Read this article: http://retirehappy.ca/much-one-year-maximum-cpp-contributions-worth/ . I haven't updated the amounts for 2016 rates yet, but it doesn't change significantly year-by-year. There's not enough detail yet on the proposed enhancements to the CPP to know what impact they might have for you.


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## james4beach

Hi Dogger, thanks for lending your assistance to this forum.

I'm in my 30s and have worked in Canada for a few years. Service Canada says that if I was 65 today I could receive a $322.69 CPP monthly pension.

I'm still a tax resident of Canada (I file a T1) but for the last couple of years I've been working in the USA, for an American employer. As is required in the US, I am paying into Social Security. My paycheque doesn't have a CPP deduction of course. So far I've paid $16,000 into Social Security. Long-term, I intend to continue living & working in Canada.

My question: will I be able to move my Social Security credits to the CPP? I'm paying a huge amount into SS -- over $6,000 a year. Is there something else I should be doing to help further increase my CPP eligibility? Does CPP have a mechanism where they credit me for years I paid into SS, thus boosting my eventual CPP pension?

As I understand it, in the future I will not be eligible to collect US Social Security (not a citizen or resident). So I'm wondering if this 6.2% SS tax that I pay in the US is a total waste... can I derive any benefit from this via CPP? Or is this money just going into a black hole?

In the future, I will most likely be a resident in Canada and will have worked most of my years in Canada. I trust the CPP much more than I trust US Social Security. Therefore, I definitely don't want to transfer credits to the US, nor do I want to rely on the US to pay me. I want to receive a CPP pension, but it distresses me that the years I work in the US appear to be "lost" from CPP.


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## sags

A friend of ours was born and raised in Canada, lived and worked in the US for quite a few years. returned to work in Canada.

She collected both CPP and Social Security.

I believe you have to contribute for a minimum amount of time to qualify.

I contributed when I was going to school in the US and worked there for a couple of years as a student. 

I checked it out but didn't work long enough to qualify.

Remember that Social Security benefits are paid out in American dollars.

She was collecting when our dollar was about where it is now and her $900 SS cheque turned into $1200 Canadian.

http://www.esdc.gc.ca/en/cpp/international/unitedstates.page


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## james4beach

Interesting, so maybe I'll be able to actually collect Social Security.


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## Dogger1953

James - As per Sags' link, you should be able to use the Canada/USA to receive US social security benefits even if you have less than 10 years of contributions to the USA, which is normally required. You should however be aware of the USA's "Windfall Elimination Provision", which I believe will apply to you: https://www.ssa.gov/planners/retire/wep.html


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## kork

Dogger1953 said:


> Hi kork - Read this article: http://retirehappy.ca/much-one-year-maximum-cpp-contributions-worth/ . I haven't updated the amounts for 2016 rates yet, but it doesn't change significantly year-by-year. There's not enough detail yet on the proposed enhancements to the CPP to know what impact they might have for you.


Thanks Dogger,

So for all intents and purposes, it's safe to assume that under todays rules, I'd get $25 for each year of maxing out CPP contributions. 16 years @ $25 = $400/month (plus/minus inflation) roughly when I hit 65 for CPP?


----------



## Dogger1953

kork said:


> Thanks Dogger,
> 
> So for all intents and purposes, it's safe to assume that under todays rules, I'd get $25 for each year of maxing out CPP contributions. 16 years @ $25 = $400/month (plus/minus inflation) roughly when I hit 65 for CPP?


That would be a very safe assumption as a minimum amount.


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## james4beach

Dogger1953 said:


> James - As per Sags' link, you should be able to use the Canada/USA to receive US social security benefits even if you have less than 10 years of contributions to the USA, which is normally required. You should however be aware of the USA's "Windfall Elimination Provision", which I believe will apply to you: https://www.ssa.gov/planners/retire/wep.html


Thanks! I'll read these sources.


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## kork

Dogger1953 said:


> That would be a very safe assumption as a minimum amount.


Awesome, thanks Dogger.


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## vagabondretiree

Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


I retired in March 2015, I'm now 57 with 35 years max earnings. If I take at earliest what can I expect?


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## Dogger1953

vagabondretiree said:


> I retired in March 2015, I'm now 57 with 35 years max earnings. If I take at earliest what can I expect?


Your CPP at age 60 will be $699.20 (in 2016 dollars), which is 64.0% of the age-65 max of $1,092.50


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## vagabondretiree

Dogger1953 said:


> Your CPP at age 60 will be $699.20 (in 2016 dollars), which is 64.0% of the age-65 max of $1,092.50


Thanks, so I assume I had enough max years? I thought I needed39 or 40.


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## Dogger1953

vagabondretiree said:


> Thanks, so I assume I had enough max years? I thought I needed39 or 40.


You need 39 years of max earnings if you take your CPP at age 65, but only 35 years of max earnings at age 60.


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## William62

*CPP*

I am 54. I have a military pension-30 years, bridging is 800 a month now. CPP tells me my CPP at 65 would be 1052 a month, is that if I keep earning to ympe to 65, Or if I retire now? I only have met ympe 26 years. & second q. Will my bridging at 65, be less than my CPP pension? If I have partial ympe years, how do they compute those?


----------



## Dogger1953

William62 said:


> I am 54. I have a military pension-30 years, bridging is 800 a month now. CPP tells me my CPP at 65 would be 1052 a month, is that if I keep earning to ympe to 65, Or if I retire now? I only have met ympe 26 years. & second q. Will my bridging at 65, be less than my CPP pension? If I have partial ympe years, how do they compute those?


William - If you read these two articles, they should answer all of your questions:
http://retirehappy.ca/understanding-cpp-statement-contributions-soc/
http://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/


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## Rebecca

Hi Dogger, I have read your survivor article over many times, but still can't figure out what my benefits would be if my spouse predeceases me. He currently receives the full $1,092, but I have not started collecting my CPP yet. I have an option to receive about $330 at age 65, or $250 at age 60. Is my CPP income separate from a survivor benefit? So that I would get both? It is easy enough to calculate that I would receive $593.62 (if I'm under 65) or $655.50 (if I'm older), as his survivor, but what happens to my own pension? Does it shrink when it is merged? I just can't seem to get my head around how to figure it out. Any help would be greatly appreciated.


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## Dogger1953

Rebecca said:


> Hi Dogger, I have read your survivor article over many times, but still can't figure out what my benefits would be if my spouse predeceases me. He currently receives the full $1,092, but I have not started collecting my CPP yet. I have an option to receive about $330 at age 65, or $250 at age 60. Is my CPP income separate from a survivor benefit? So that I would get both? It is easy enough to calculate that I would receive $593.62 (if I'm under 65) or $655.50 (if I'm older), as his survivor, but what happens to my own pension? Does it shrink when it is merged? I just can't seem to get my head around how to figure it out. Any help would be greatly appreciated.


Rebecca - I agree that it's complicated! It's the survivor's pension that gets reduced when it is combined with your own retirement pension. In your case, this reduction will be about $100 if you take your CPP at age 60 or about $130 if you take your CPP at age 65.


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## Jaberwock

I have a question regarding the child rearing drop out provision.

My wife is applying for CPP, at age 60. She has 15 years (from 1985 to 1999) where she could qualify as a primary care giver. She has not worked since 2010, so she has used all of her regular 16% drop out allowance.

During the "child rearing years" there were 7 years of no income and no CPP contributions, two years of very low income (contributions less than 2% of maximum) and 6 years when she worked and made contributions of between 30% and 90% of the maximum.

How does CPP calculate her pension, taking account of the child rearing years? Do they just drop out the years when she didn't work? Will they drop out the 2 years of low income? What happens to the 6 years of contributions from those child rearing years - do they count towards her pension?


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## Dogger1953

Jaberwock said:


> I have a question regarding the child rearing drop out provision.
> 
> My wife is applying for CPP, at age 60. She has 15 years (from 1985 to 1999) where she could qualify as a primary care giver. She has not worked since 2010, so she has used all of her regular 16% drop out allowance.
> 
> During the "child rearing years" there were 7 years of no income and no CPP contributions, two years of very low income (contributions less than 2% of maximum) and 6 years when she worked and made contributions of between 30% and 90% of the maximum.
> 
> How does CPP calculate her pension, taking account of the child rearing years? Do they just drop out the years when she didn't work? Will they drop out the 2 years of low income? What happens to the 6 years of contributions from those child rearing years - do they count towards her pension?


Jaberwock - This article should answer all of your questions: http://retirehappy.ca/child-rearing-dropout/


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## Rebecca

Dogger1953 said:


> Rebecca - I agree that it's complicated! It's the survivor's pension that gets reduced when it is combined with your own retirement pension. In your case, this reduction will be about $100 if you take your CPP at age 60 or about $130 if you take your CPP at age 65.


So I would still get my $330 or $250, but the $593 or $655 would be reduced by about $100 (or $130). Thank you so much for helping!


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## naysmitj

I am currently 66 working full time earning over $75K annually with over 40 years of maximum contributions to CPP.
So am I better off to continue on just contributing to CPP, or should I start collecting CPP while contributing to PRB?
I am very healthy and active as well so working to at least 70 is very likely.


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## Dogger1953

naysmitj said:


> I am currently 66 working full time earning over $75K annually with over 40 years of maximum contributions to CPP.
> So am I better off to continue on just contributing to CPP, or should I start collecting CPP while contributing to PRB?
> I am very healthy and active as well so working to at least 70 is very likely.


You actually have 3 main choices, as follows (all expressed in 2016 dollars):
1) Wait until age 70 to apply for your CPP and receive a monthly retirement pension of $1,551.35 ($1,092.50 x 142%).
2) Apply for your CPP now and receive a monthly retirement pension of $1,184.27 ($1,092.50 x 108.4%) and stop contributing to CPP and save the yearly contribution of $2,544.30 for the next 4 years.
3) Apply for your CPP now and receive a monthly retirement pension of $1,184.27 ($1,092.50 x 108.4%) and keep contributing to CPP and earn 4 years of PRBs totaling approx. $136 monthly.


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## naysmitj

Dogger1953 said:


> You actually have 3 main choices, as follows (all expressed in 2016 dollars):
> 1) Wait until age 70 to apply for your CPP and receive a monthly retirement pension of $1,551.35 ($1,092.50 x 142%).
> 2) Apply for your CPP now and receive a monthly retirement pension of $1,184.27 ($1,092.50 x 108.4%) and stop contributing to CPP and save the yearly contribution of $2,544.30 for the next 4 years.
> 3) Apply for your CPP now and receive a monthly retirement pension of $1,184.27 ($1,092.50 x 108.4%) and keep contributing to CPP and earn 4 years of PRBs totaling approx. $136 monthly.


First of all thanks very much for the concise info, I really appreciate it.
Just to confirm, the $136.00 monthly is after four years of working and continuing to contributing to CPP while collecting CPP.
Can you confirm that I would be looking at $34.00 PRB a month after each year, and that I would start collecting that amount in the year following each contributing year?
Since in my case and using your example it would seem that beginning to collect CPP in January 2017 and then continuing to contribute to CPP collecting the increased PRBs each year leaves an age 88 break even with delaying until 2020.
Cheers


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## Dogger1953

naysmitj said:


> First of all thanks very much for the concise info, I really appreciate it.
> Just to confirm, the $136.00 monthly is after four years of working and continuing to contributing to CPP while collecting CPP.
> Can you confirm that I would be looking at $34.00 PRB a month after each year, and that I would start collecting that amount in the year following each contributing year?
> Since in my case and using your example it would seem that beginning to collect CPP in January 2017 and then continuing to contribute to CPP collecting the increased PRBs each year leaves an age 88 break even with delaying until 2020.
> Cheers


The $34 estimate is an average of the four PRBs that would be payable, as each year would be different based on your age as of January of the year following when the contribution is made. Aside from that, you are correct.


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## dadaswell

So......my latest CPP estimate by Service Canada done 2 months ago said I would collect $695 if I took it at 60.....which is imminent : ) Decided I would do that, applied, and am now being told that I will start receiving my cheque in November, and it will be $625. Are they usually that far off the mark with their estimates even when they are done right before application???


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## Dogger1953

dadaswell said:


> So......my latest CPP estimate by Service Canada done 2 months ago said I would collect $695 if I took it at 60.....which is imminent : ) Decided I would do that, applied, and am now being told that I will start receiving my cheque in November, and it will be $625. Are they usually that far off the mark with their estimates even when they are done right before application???


It's impossible for the calculation to have changed that much in only 2 months, so there is a mistake in one of those numbers. If you send me a copy of your previous/current statement to [email protected], I'll validate the calculation for you.


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## dadaswell

Dogger1953 said:


> It's impossible for the calculation to have changed that much in only 2 months, so there is a mistake in one of those numbers. If you send me a copy of your previous/current statement to [email protected], I'll validate the calculation for you.


That would be awesome, Dogger! I can forward you the estimate page that says $695/month that I printed off. When you say the statement page, is that what you are referring to? 

BTW....the $625/month figure was given to me over the phone when I called Service Canada this week. They said I wouldn't receive a letter regarding this until December (even though their website said that I would hear from them within 3 weeks of applying....I applied in early September).

Also, my wife has corrected me....I receive my first cheque in December.

Let me know if the estimate is what you are looking for, or something else.

THANK YOU!!


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## Dogger1953

dadaswell said:


> That would be awesome, Dogger! I can forward you the estimate page that says $695/month that I printed off. When you say the statement page, is that what you are referring to?
> 
> BTW....the $625/month figure was given to me over the phone when I called Service Canada this week. They said I wouldn't receive a letter regarding this until December (even though their website said that I would hear from them within 3 weeks of applying....I applied in early September).
> 
> Also, my wife has corrected me....I receive my first cheque in December.
> 
> Let me know if the estimate is what you are looking for, or something else.
> 
> THANK YOU!!


The estimate page is useful too, but what I really need is the page(s) showing your year-by-year pensionable earnings since age 18.


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## dadaswell

Dogger1953 said:


> The estimate page is useful too, but what I really need is the page(s) showing your year-by-year pensionable earnings since age 18.


Ok...will try to get to it by Monday....out of town early tomorrow.
Thanks again!


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## naysmitj

dadaswell said:


> Ok...will try to get to it by Monday....out of town early tomorrow.
> Thanks again!


I have been trying to get into the CPP web site for well over a week.
It is out of commission with no explanation or estimated time for being available again.
I was planning to apply this month, but now I am not sure.
Perhaps they got hit by one of those computer ransom virus.


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## dadaswell

naysmitj is right. I will get the info Dogger1953....as soon as the site has everything going again.


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## naysmitj

dadaswell said:


> naysmitj is right. I will get the info Dogger1953....as soon as the site has everything going again.


Hey, the CPP website is finally up.


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## dadaswell

And playing games again today....frustrating!!!!!!!!


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## snowbeavers

Probably a dumb question but how long do you have to be living/working in Canada to collect CPP? I'm a Canadian expat and left when I was 23 years old (and now almost 40). If I moved back to Canada at say age 45 and worked for 10 years, would I still be eligible? Thx


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## Dogger1953

snowbeavers said:


> Probably a dumb question but how long do you have to be living/working in Canada to collect CPP? I'm a Canadian expat and left when I was 23 years old (and now almost 40). If I moved back to Canada at say age 45 and worked for 10 years, would I still be eligible? Thx


You only have to work and contribute to CPP for 1 year to be eligible for a retirement pension, but the amount of your pension would be very small. At age 65, your lifetime earnings would be averaged over 39 years, meaning that each year of maximum earnings (currently $54,900/year) is worth 1/39th of a maximum CPP pension (currently $1,092.50/month) or approx. $28 per month. In addition, you would be eligible for some OAS, which is earned at the rate of 1/40th of the maximum OAS pension (currently $578.53/month) for every year of residence in Canada after age 18.


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## ian

I did have a question. Called CPP this morning. I was on hold in the queue for less than 2 minutes. The CSR answered my question about the CPP amounts. It seems I forget that CPP is withholding 15 percent tax on our pensions. Good service.


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## Dogger1953

ian said:


> I did have a question. Called CPP this morning. I was on hold in the queue for less than 2 minutes. The CSR answered my question about the CPP amounts. It seems I forget that CPP is withholding 15 percent tax on our pensions. Good service.


Ian - Glad to hear that you had a positive experience with Service Canada today. I agree that they can often be very good, but they can also be very bad. The real problem is that unless you already know the answer, you sometimes have to make multiple calls just to increase the likelihood of getting the correct answer. I've talked to many CSRs that gave me good service, but gave me terribly inaccurate information.


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## RussT

Hi Dogger...thanks for your amazing thread.

I have a young friend who has stage IV lung cancer. As you may know, there is no stage V. His medium to long term prognosis is very poor, but so far he is tolerating chemo reasonably well. He has been a successful freelance writer but he has not been able to work since his diagnosis in April of this year. I have been urging him to apply for disability benefits from CPP and the Writers Guild but he feels he may yet be able to write for his regular clients and earn some much needed money.

Do you know if CPP is open to persons on disability benefits doing part-time work? Would they likely reduce his benefit by whatever he earns? This would seem reasonable. Or would they likely suspend benefits, or even worse, deny benefits completely? I admire his desire to work but I need to give him advice for the best outcome for his little family.

By the way, I believe his infant child may qualify for a CPP benefit as well, so that raises the financial stakes.


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## Dogger1953

RussT said:


> Hi Dogger...thanks for your amazing thread.
> 
> I have a young friend who has stage IV lung cancer. As you may know, there is no stage V. His medium to long term prognosis is very poor, but so far he is tolerating chemo reasonably well. He has been a successful freelance writer but he has not been able to work since his diagnosis in April of this year. I have been urging him to apply for disability benefits from CPP and the Writers Guild but he feels he may yet be able to write for his regular clients and earn some much needed money.
> 
> Do you know if CPP is open to persons on disability benefits doing part-time work? Would they likely reduce his benefit by whatever he earns? This would seem reasonable. Or would they likely suspend benefits, or even worse, deny benefits completely? I admire his desire to work but I need to give him advice for the best outcome for his little family.
> 
> By the way, I believe his infant child may qualify for a CPP benefit as well, so that raises the financial stakes.


Russ - To be approved for CPP disability, your friend must be considered to be "incapable regularly of pursuing any substantially gainful occupation". Substantially gainful is considered to mean anything that exceeds the maximum CPP retirement pension ($1,092.50 monthly for 2016). There is no such thing as "partially disabled" for CPP purposes, but once your friend is approved for CPP disability benefits, there are some provisions designed to encourage a return to work. These include an "allowable earnings" policy (which allows someone to earn up to $5,400 each year without reporting in to CPP) and sometimes an approved trial return to work.

If your friend hasn't worked at all since April, I agree that he should at least try applying for CPP disability.


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## milhouse

While retirement is still a few years away, I'm curious if I will receive a greater benefit in taking CPP at age 60 or 65 after an early retirement. I only expect to have 26 maximum years of contribution with the rest being relatively nominal or zero contribution years. 

Is my rough analysis correct?
(My max contribution years)/(Number of years used for max monthly benefit) x (Max Benefit) x (Earlier Reduction Penalty) = Rough Monthly Benefit
Age 60 CPP: 26/35 x $1092.50 x 64% = $519/month
Age 65 CPP: 26/39 x $1092.50 = $728/month


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## dadaswell

Dogger1953 said:


> It's impossible for the calculation to have changed that much in only 2 months, so there is a mistake in one of those numbers. If you send me a copy of your previous/current statement to [email protected], I'll validate the calculation for you.


So I finally got around to getting this together for you Dogger. Went back on the Service Canada site....which actually seems to be working, and it is now telling me that my actual payment will be $695. So, either the clerk on the phone was wrong, or my hearing is leaving me.....along with my 59th year!

Thanks for the offer though! : )


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## Dogger1953

milhouse said:


> While retirement is still a few years away, I'm curious if I will receive a greater benefit in taking CPP at age 60 or 65 after an early retirement. I only expect to have 26 maximum years of contribution with the rest being relatively nominal or zero contribution years.
> 
> Is my rough analysis correct?
> (My max contribution years)/(Number of years used for max monthly benefit) x (Max Benefit) x (Earlier Reduction Penalty) = Rough Monthly Benefit
> Age 60 CPP: 26/35 x $1092.50 x 64% = $519/month
> Age 65 CPP: 26/39 x $1092.50 = $728/month


Sorry for the long delay in replying, but "yes" your rough analysis is very accurate!


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## naysmitj

Good morning Dogger. I am expecting my first CPP payment this month.

I am eligable for maximum.
I turned 65 mid August 2015
delayed until Jan 2017 to collect.
Service Canada site currently shows my payment will be $1,238.91
My calculations are:
2017 max monthly payment $1,114.17 according to Service Canada website
17 months delay from mid August 2016 to January 2017 at .7% a month = 11.9% increase
11.9% x $1,114.17 = $132.59
My monthly payment for 2017 should be $1,246.76 using this calculation.
Am I calculating this correctly?
Cheers and Happy New Years to you.


----------



## Dogger1953

naysmitj said:


> Good morning Dogger. I am expecting my first CPP payment this month.
> 
> I am eligable for maximum.
> I turned 65 mid August 2015
> delayed until Jan 2017 to collect.
> Service Canada site currently shows my payment will be $1,238.91
> My calculations are:
> 2017 max monthly payment $1,114.17 according to Service Canada website
> 17 months delay from mid August 2016 to January 2017 at .7% a month = 11.9% increase
> 11.9% x $1,114.17 = $132.59
> My monthly payment for 2017 should be $1,246.76 using this calculation.
> Am I calculating this correctly?
> Cheers and Happy New Years to you.


naysmitj - If your 65th birthday was in Aug 2015, your first CPP payment at 100% would have been effective Sept 2015. Delaying until Jan 2017 would therefore only be a 16-month increase of 11.2%, making your maximum CPP $1,238.96. If you truly have 39 full M years (without counting 2016), I can't explain the 5 cent difference?


----------



## naysmitj

Dogger1953 said:


> naysmitj - If your 65th birthday was in Aug 2015, your first CPP payment at 100% would have been effective Sept 2015. Delaying until Jan 2017 would therefore only be a 16-month increase of 11.2%, making your maximum CPP $1,238.96. If you truly have 39 full M years (without counting 2016), I can't explain the 5 cent difference?


Perfect, thanks very much for the info. 
Cheers


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## Mechanic

Where can a person find out what they are entitled to at age 60 or age 65 ? We actually retired in 2011 at age 55 but now we are turned 60 so curious about this.


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## heyjude

Mechanic said:


> Where can a person find out what they are entitled to at age 60 or age 65 ? We actually retired in 2011 at age 55 but now we are turned 60 so curious about this.


At the Service Canada website.

https://www.canada.ca/en/employment-social-development/corporate/portfolio/service-canada.html


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## Mukhang pera

heyjude said:


> At the Service Canada website.
> 
> https://www.canada.ca/en/employment-social-development/corporate/portfolio/service-canada.html



Correct info, but, unless things have changed lately, to get personalized info from that site you'll have to request a "Personal Access Code" and wait for it to come in the mail. That's what I had to do in August 2013.


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## Mechanic

I tried online but had problems. Maybe I will find a service canada place in the next while.


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## Dogger1953

Mechanic said:


> Where can a person find out what they are entitled to at age 60 or age 65 ? We actually retired in 2011 at age 55 but now we are turned 60 so curious about this.


I agree with heyjude that the Service Canada website is a good starting point, but there are some issues with their online estimates. Read this article: https://retirehappy.ca/understanding-cpp-statement-contributions-soc/


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## Mechanic

A few things I have read. plus comments from friends suggest that we should take it now we have turned 60, even though we don`t actually need the funds at this time.


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## Mukhang pera

Mechanic said:


> A few things I have read. plus comments from friends suggest that we should take it now we have turned 60, even though we don`t actually need the funds at this time.


I think the stock advice is to grab it and run as soon as you can. I think any actuary will tell you that. I too am past 60 and plan to defer to age 70. But I know I might never make it to 70 and an actuary will tell you that to recoup what you gave up in the deferred years means you'll have to live to about 100 to break even. Both my parents recently got to about that age, maybe I'll get lucky!

Like you, I have no need of the funds now and I'll probably work to age 70 or so if I do survive. That being so, my CPP would now be taxed at the highest marginal rate. I'd rather wait. As well, I just like the psychological lift from receiving a bigger cheque. I'll never be allowed to collect a dime of OAS, so I might as well give my CPP a boost. Mind you, I expect Trudeau and his elves in Ottawa to claw back CPP pretty soon. So am I making an egregious financial planning error? Indubitably. Do I care? Not a whit! I can afford to indulge in a bit of foolishness.


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## heyjude

Mukhang pera said:


> Correct info, but, unless things have changed lately, to get personalized info from that site you'll have to request a "Personal Access Code" and wait for it to come in the mail. That's what I had to do in August 2013.


Yes, I should have pointed that out; however, it is explained on the site.


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## Slice225

*Canada Pension Estimate for Non-resident*



Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


I am a Canadian citizen born in 1953. I worked in Canada in from 1972 to 2001 (30 yrs), with max. earnings for 23 of these years. One year was 0 earnings (out of country) and the other 6 years, 3 years were about 70% max. earnings and the other 3 years about 10% max. earnings. I moved to the U.S. in January, 2001. At age 65, what would be my estimated max. monthly pension if I had worked entirely in Canada til 65 and what would be my estimated monthly pension based on my actual 30 yrs. worked in Canada. Best estimate for both would be appreciated.

Thank you in advance.


----------



## Dogger1953

Slice225 said:


> I am a Canadian citizen born in 1953. I worked in Canada in from 1972 to 2001 (30 yrs), with max. earnings for 23 of these years. One year was 0 earnings (out of country) and the other 6 years, 3 years were about 70% max. earnings and the other 3 years about 10% max. earnings. I moved to the U.S. in January, 2001. At age 65, what would be my estimated max. monthly pension if I had worked entirely in Canada til 65 and what would be my estimated monthly pension based on my actual 30 yrs. worked in Canada. Best estimate for both would be appreciated.
> 
> Thank you in advance.


At age 65, CPP is based on your best 39 years of earnings, so if you had remained in Canada until you had at least 39 years of max earnings your monthly CPP at age 65 would have been $1,114.17 (in 2017 dollars. Since you have only 30 years of earnings which total the equivalent of 25.4 years of max earnings, your monthly CPP at age 65 will be $725.64 (25.4 / 39 x $1,114.17).


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## Daniel A.

Just noticed Dogger that this thread has had over 157,706 views.

That really is impressive for any forum.


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## condor

*Retirement Implications*

I am concerned on how my planned retirement will work out for me. First is some background information on myself and wife.

Myself....age 70 started collecting CPP...829.00 and OAS....460.00 per month.....still working full time. I plan to retire at end of July 2017...income from this job will generate 40,000.00...I have no other source of income.

Wife...age 66...CPP..289.00...OAS....578.00.....no other source of income.

My question is....how is my future entitlement for GIS.....CPP...and OAS be calculated for the remainder of 2016 and in 2017. If anybody has the Government form number that i should fill in and submit would be great to get this process started.
Can anybody give me some idea on how much we can expect for the for the remainder of 2016 and then going forward into 2017

Thank you


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## condor

*Tax Year mistake*

Oops....made a mistake on the years in question....should be for 2017 and 2018.


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## Dogger1953

condor said:


> I am concerned on how my planned retirement will work out for me. First is some background information on myself and wife.
> 
> Myself....age 70 started collecting CPP...829.00 and OAS....460.00 per month.....still working full time. I plan to retire at end of July 2017...income from this job will generate 40,000.00...I have no other source of income.
> 
> Wife...age 66...CPP..289.00...OAS....578.00.....no other source of income.
> 
> My question is....how is my future entitlement for GIS.....CPP...and OAS be calculated for the remainder of 2016 and in 2017. If anybody has the Government form number that i should fill in and submit would be great to get this process started.
> Can anybody give me some idea on how much we can expect for the for the remainder of 2016 and then going forward into 2017
> 
> Thank you


Based on your CPP and OAS incomes only, you should each be eligible for a monthly GIS of approx. $205 effective Aug 2017 thru June 2018 (and ongoing if your future income is just CPP and OAS). GIS applications for the July 2017 thru June 2018 payment year aren't available yet.

Assuming that your OAS is only $460 due to the "clawback", you might be able to have the OAS increased to $578 if you complete this form: http://www.cra-arc.gc.ca/E/pbg/tf/t1213_oas/README.html


----------



## condor

*GIS Supplement*

Thank you for your valuable information....but can you expand in more detail the GIS supplement.
As i read this.....i being the 70 year old retiring would get a 205.00 GIS payment...but confused on how much my wife would get on her GIS payment...is it the same as 205.00 or more because of her lower CPP payment?


----------



## Dogger1953

condor said:


> Thank you for your valuable information....but can you expand in more detail the GIS supplement.
> As i read this.....i being the 70 year old retiring would get a 205.00 GIS payment...but confused on how much my wife would get on her GIS payment...is it the same as 205.00 or more because of her lower CPP payment?


GIS entitlement is based on your combined income, and you will both receive the same amount of GIS (unless one of you is receiving partial OAS due to having resided in Canada for less than 40 years after age 18, which I assumed was not your situation).


----------



## Userkare

Hello, I don't know if this has been asked/answered in the previous 45 pages, so please forgive me if it was, but...

I am over 65 yrs old; I retired in 2014. I have not started collecting CPP or OAS; I'd rather wait til I'm 70 and get a higher amount.

This past year, I did some contract work for my previous employer as a self-employed individual. Filling out my 2016 tax return with Turbo Tax, it forced me to contribute to CPP. It wouldn't allow me to 'elect' not to pay CPP premiums.

Can I elect to not pay CPP premiums if I am not currently collecting CPP benefits, or can that election only be made by someone who gets self-employed income while also receiving CPP? Thanks.


----------



## Dogger1953

Userkare said:


> Hello, I don't know if this has been asked/answered in the previous 45 pages, so please forgive me if it was, but...
> 
> I am over 65 yrs old; I retired in 2014. I have not started collecting CPP or OAS; I'd rather wait til I'm 70 and get a higher amount.
> 
> This past year, I did some contract work for my previous employer as a self
> 
> Userkare - Unfortunately, CPP contributions are mandatory until age 70 unless you are receiving your CPP retirement pension, in which case they're optional after age 65.


----------



## OnlyMyOpinion

And of course your contributions will continue to enhance your eventual CPP pension.


----------



## Userkare

Dogger1953 said:


> Userkare - Unfortunately, CPP contributions are mandatory until age 70 unless you are receiving your CPP retirement pension, in which case they're optional after age 65.


Thanks for the info. Unfortunate and inconvenient! This wiped out my expected refund at a time when property taxes, and car + home insurance are all due. Now I also owe CRA over $700. :frown-new: 
In the Turbo Tax software, it made me pay 2x the amount, but can only declare 1x as a deduction. It doesn't look like I can deduct the other half as a business expense?
EDIT: ^^^^^ Nevermind, I see that it put half on line 310 and half on line 222

There may even be more contracts coming this year; now I'll know to remit a little more each quarter to cover that extra amount. I shouldn't complain, though; lots of old folks would love to be getting some extra cash doing something that isn't a WalMart greeter.




OnlyMyOpinion said:


> And of course your contributions will continue to enhance your eventual CPP pension.


Yes, and all I have to do now is live to be 100 to get it all back.


----------



## Dogger1953

OnlyMyOpinion said:


> And of course your contributions will continue to enhance your eventual CPP pension.


Maybe yes, maybe no. The earnings/contributions after age 65 will only increase the CPP amount if they are among the "best" (in terms of % of YMPE) 39 years.


----------



## OnlyMyOpinion

Dogger1953 said:


> Maybe yes, maybe no. The earnings/contributions after age 65 will only increase the CPP amount if they are among the "best" (in terms of % of YMPE) 39 years.


Ah yes.:stupid: 
Thanks for pointing that out Dogger.
Good news User, you can check out before 100.


----------



## Userkare

Dogger1953 said:


> Maybe yes, maybe no. The earnings/contributions after age 65 will only increase the CPP amount if they are among the "best" (in terms of % of YMPE) 39 years.


I was just thinking... maybe if I made an RRSP contribution that would negate the tax amount I owe this year, I would be withdrawing it in a year when there was no CPP premium payable - even though the tax rate % is the same.


----------



## RussT

Hi Dogger:

I asked a question about CPP disability back in Nov 2016 and this is a technical question about the condensed disability form for individuals with a terminal illness - specifically question 10b dealing with children. This young couple has an infant child. The young man has advanced cancer. He is a freelance writer who works from home. His spouse does not work. They share the duties of caregiving for the child.

Question 10b asks "Were you the prime caregiver for these children from birth until age 7?" I'm not sure how to answer this. If the answer is "No" I have to list any periods of time he was not the primary caregiver and explain why. I'm not sure how to deal with this. He was _a_ primary caregiver but not _the_ primary caregiver.

Your opinion would be appreciated.


----------



## Dogger1953

RussT said:


> Hi Dogger:
> 
> I asked a question about CPP disability back in Nov 2016 and this is a technical question about the condensed disability form for individuals with a terminal illness
> QUOTE]
> 
> RussT - This question is intended to identify which parent is eligible to claim the child-rearing dropout. It is usually claimed by the female parent unless she was clearly the higher wage-earner and the male parent was clearly the primary caregiver. I'd probably recommend just leaving that whole question blank for him.


----------



## Kabby

*Would like more info*



Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


Hi,
I am 56 and thinking of retirement, would like to get an accurate assessment of how much cpp I would receive.
Can you give me your e-mail?

Thanks,
Patrick


----------



## heyjude

Kabby said:


> Hi,
> I am 56 and thinking of retirement, would like to get an accurate assessment of how much cpp I would receive.
> Can you give me your e-mail?
> 
> Thanks,
> Patrick


Here is Doug's contact info page, from his website:

http://www.drpensions.ca/contact-dr-pensions.html


----------



## Kabby

heyjude said:


> Here is Doug's contact info page, from his website:
> 
> 
> 
> Thanks heyjude.
> 
> Patrick


----------



## oca2dja

*When can I stop contributing and still be eligible for maximum CPP benefit*

Hi Dogger,
I have a question. I will turn 65 on Aug.1.
I am self employed and incorporated. I would like to be eligible for my maximum CPP benefit. I have been working since 1978 and making maximum CPP contributions since 1983. My question is should I make a contribution this year ie the year I am turning 65, or would I be wiser to simply pay myself a dividend from my corporation and save myself the money I would be contributing to the CPP (as I am both the employee and the employer)? 
Many thanks


----------



## Dogger1953

oca2dja said:


> Hi Dogger,
> I have a question. I will turn 65 on Aug.1.
> I am self employed and incorporated. I would like to be eligible for my maximum CPP benefit. I have been working since 1978 and making maximum CPP contributions since 1983. My question is should I make a contribution this year ie the year I am turning 65, or would I be wiser to simply pay myself a dividend from my corporation and save myself the money I would be contributing to the CPP (as I am both the employee and the employer)?
> Many thanks


You need 39 years of max earnings to get a max CPP, so it doesn't sound like you'll quite get there. On the other hand, since you do already have 39 years of some level of earnings, making max contributions in 2017 may not increase your CPP all that much. I'd need to see your entire contributory record to CPP in order to quantify the cost/benefit, but I think I'd lean towards recommending dividends for 2017.


----------



## Gstevenson

*Mother never applied for CPP*

Hi, I have a question:

I just found out my 77 year old mother in law never applied for CPP because she only worked (for money) for a few years, and that was before CPP existed.

She did raise 4 children who were all born and raised in Canada and who are all now adults.

Would my mother in law qualify for CPP based on the child rearing years? If so, is it too late to retroactively apply?

Thanks!


----------



## Dogger1953

Gstevenson said:


> Hi, I have a question:
> 
> I just found out my 77 year old mother in law never applied for CPP because she only worked (for money) for a few years, and that was before CPP existed.
> 
> She did raise 4 children who were all born and raised in Canada and who are all now adults.
> 
> Would my mother in law qualify for CPP based on the child rearing years? If so, is it too late to retroactively apply?
> 
> Thanks!


Hi - Unfortunately, the child-rearing dropout doesn't make someone eligible for CPP if they've never contributed, it just increases the amount of their CPP if they did make contributions in at least one year.


----------



## dadaswell

Another complicated question....at least for me!!

CPP credits were split due to a divorce a number of years ago. Now that CPP is in pay, the ex is going for spousal support based on the amount of CPP that was earned after the split. How on earth do you figure that out? Will Service Canada do it? Is it something you can do Dogger? Or is it time to hire an actuary......again? : (


----------



## Dogger1953

dadaswell said:


> Another complicated question....at least for me!!
> 
> CPP credits were split due to a divorce a number of years ago. Now that CPP is in pay, the ex is going for spousal support based on the amount of CPP that was earned after the split. How on earth do you figure that out? Will Service Canada do it? Is it something you can do Dogger? Or is it time to hire an actuary......again? : (


Service Canada won't do it, but I could if you email me the details.


----------



## dadaswell

Dogger1953 said:


> Service Canada won't do it, but I could if you email me the details.


What do you need?


----------



## Dogger1953

dadaswell said:


> What do you need?


I would need:
- a copy of your CPP statement of contributions;
- your estimated future annual earnings to retirement;
- what age you plan to start receiving CPP


----------



## dadaswell

Dogger1953 said:


> I would need:
> - a copy of your CPP statement of contributions;
> - your estimated future annual earnings to retirement;
> - what age you plan to start receiving CPP


Already retired...no more earned income.
Already collecting CPP at 60, so...
just need to get you the statement. Where do I send it? (rather than posting it here LOL!)


----------



## Dogger1953

dadaswell said:


> Already retired...no more earned income.
> Already collecting CPP at 60, so...
> just need to get you the statement. Where do I send it? (rather than posting it here LOL!)


You can email me at [email protected] . Since you're already in pay, I'll just need your CPP statement and your current monthly rate (before any tax withhold).


----------



## neospike

Hi Dogger,

My grandfather's estate has not been resolved since he passed away in 2009. Until no, my mother and her brother have been unable to come to an agreement on what to do with a commercial property that was left to them. They have now sold the property.

Seeing as my mother just turned 65 in January, and her CPP+OAS+GIS is $1800 per month, how will this affect her payments? In the past few years she has had no income, and this inheritance was my grandfather's home, which he left to her outright, and this other commercial property that was to be divided between them. There was absolutely nothing else in the estate, no money, no vehicles, no life insurance. Just the two properties.

How will it effect her monthly allowance? Any money she would get from this sale is going to be going into repairing/making changes to the other house that was left to her because it is in a state of disrepair.

One more thing, the commercial property that has now been sold, they were not getting any income on that property since 2006, so 3 years before my grandfather died, yet they continued to pay bills, property taxes, insurance from the estate account. That account in now zero. Would this be able to help in any way?

Thank you for any help you can give me.


----------



## Dogger1953

neospike said:


> Hi Dogger,
> 
> My grandfather's estate has not been resolved since he passed away in 2009. Until no, my mother and her brother have been unable to come to an agreement on what to do with a commercial property that was left to them. They have now sold the property.
> 
> Seeing as my mother just turned 65 in January, and her CPP+OAS+GIS is $1800 per month, how will this affect her payments? In the past few years she has had no income, and this inheritance was my grandfather's home, which he left to her outright, and this other commercial property that was to be divided between them. There was absolutely nothing else in the estate, no money, no vehicles, no life insurance. Just the two properties.
> 
> How will it effect her monthly allowance? Any money she would get from this sale is going to be going into repairing/making changes to the other house that was left to her because it is in a state of disrepair.
> 
> One more thing, the commercial property that has now been sold, they were not getting any income on that property since 2006, so 3 years before my grandfather died, yet they continued to pay bills, property taxes, insurance from the estate account. That account in now zero. Would this be able to help in any way?
> 
> Thank you for any help you can give me.


If this inheritance creates any taxable income to your mother for 2017 or subsequent years, her GIS will be reduced (starting in July 2018) by about 50 cents for every dollar of taxable income. There won't be any impact on her OAS or CPP.


----------



## dadaswell

Dogger1953 said:


> You can email me at [email protected] . Since you're already in pay, I'll just need your CPP statement and your current monthly rate (before any tax withhold).


Emailed you, Doug!


----------



## Dogger1953

dadaswell said:


> Emailed you, Doug!


Your results have been returned to you. What do you think?


----------



## OutofBounds

Without trying to sound facetious: 

Will CPP still exist in 30 years?


----------



## Dogger1953

OutofBounds said:


> Without trying to sound facetious:
> 
> Will CPP still exist in 30 years?


I'd bet my last dollar that it will be, but I probably won't be around to collect my winnings.


----------



## OutofBounds

That's certainly heartening to hear. I'm skeptical of pretty much anything the government does, and with the rampant spending of our current government something will have to give somewhere. I've heard people saying that it wouldn't surprise them if CPP was slashed and the funds re(mis?)appropriated to pay off the debt due to Liberals spending like drunken sailors on their first day back in port.


----------



## cwrea

OutofBounds said:


> That's certainly heartening to hear. I'm skeptical of pretty much anything the government does, and with the rampant spending of our current government something will have to give somewhere. I've heard people saying that it wouldn't surprise them if CPP was slashed and the funds re(mis?)appropriated to pay off the debt due to Liberals spending like drunken sailors on their first day back in port.


Provincial governments' participation aside, you have the Liberals and only the Liberals to thank for the CPP. Pearson's Liberal government created the CPP, in 1965. Chrétien's Liberals, under finance minister Paul Martin, reformed it to include an arm's length investment board, in 1996, and addressed significant demographic issues. Those are the changes that will keep any federal government from mis-appropriating the funds, and ensured the long term viability of the plan. Then, Trudeau's Liberals improved benefits in 2016, in a way that is also actuarially sound.

Don't worry 'bout the Liberals ruining CPP.


----------



## BoringInvestor

OutofBounds said:


> That's certainly heartening to hear. I'm skeptical of pretty much anything the government does, and with the rampant spending of our current government something will have to give somewhere. I've heard people saying that it wouldn't surprise them if CPP was slashed and the funds re(mis?)appropriated to pay off the debt due to Liberals spending like drunken sailors on their first day back in port.


I'm not sure if you meant your comments to be hyperbolic or not ("rampant spending", and "spending like a drunken sailors"), but I thought it'd be interesting to look at the numbers a little closer.

From this Fraser Institute report, on page 97, comparing 2016 to 2017:

- Total federal government expenditures are up 4% ($13.9 billion), made up of:
-- Old age security up 5% ($2.7 billion)
-- Family allowance; child benefits up 4% ($0.9 billion)
-- Employment relief; insurance up 2% ($0.5 billion)
-- Transfers to other government up 2% ($1.7 billion)
-- National defense down 6% (-$1.3 billion)
-- Other program expenditures up 7% ($8.7 billion)
-- Public debt charges up 3% ($0.7 billion)


Re: the CPP not having enough or the funds being appropriated, I find there's a lot of talk from some, but little to no evidence such a scenario would occur.


----------



## BC Eddie

Oh I do love it when the "scary, scary" is refuted with real facts. In this Trump world this does not happen enough. Thank you cwrea and Boring Investor



BoringInvestor said:


> I'm not sure if you meant your comments to be hyperbolic or not ("rampant spending", and "spending like a drunken sailors"), but I thought it'd be interesting to look at the numbers a little closer.
> 
> From this Fraser Institute report, on page 97, comparing 2016 to 2017:
> 
> - Total government expenditures are up 4% ($13.9 billion), made up of:
> -- Old age security up 5% ($2.7 billion)
> -- Family allowance; child benefits up 4% ($0.9 billion)
> -- Employment relief; insurance up 2% ($0.5 billion)
> -- Transfers to other government up 2% ($1.7 billion)
> -- National defense down 6% (-$1.3 billion)
> -- Other program expenditures up 7% ($8.7 billion)
> -- Public debt charges up 3% ($0.7 billion)
> 
> 
> Re: the CPP not having enough or the funds being appropriated, I find there's a lot of talk from some, but little to no evidence such a scenario would occur.


----------



## gardner

cwrea said:


> Don't worry 'bout the Liberals ruining CPP.


http://www.cbc.ca/news/business/cpp-pension-earnings-1.4243308



> CPP performance is well ahead of what chief actuary says will be needed to pay benefits for decades


----------



## BoringInvestor

I'm curious OutofBounds, in light of the replies to your comment, what are your current thoughts on the future state of the CPP?


----------



## OutofBounds

BoringInvestor said:


> I'm curious OutofBounds, in light of the replies to your comment, what are your current thoughts on the future state of the CPP?


In light of the replies, I'll plan for the worst and hope for the best. Same as I always do, in every aspect of my life.

Still trying to figure out how BC Eddie managed to work Trump into this though. Last I checked, Trump has nothing to do with CPP...


----------



## BoringInvestor

OutofBounds said:


> In light of the replies, I'll plan for the worst and hope for the best. Same as I always do, in every aspect of my life.
> 
> Still trying to figure out how BC Eddie managed to work Trump into this though. Last I checked, Trump has nothing to do with CPP...


I take the same approach - between planning and hoping.


Tying together your previous comments, and the replies from myself and BC Eddie, a few of your replies looked to be rooted in ignorance or hyperbole commentary (i.e., relaying what people had said about the future security of the CPP, or that the Liberals had increased spending outrageously), whereas a dive into the facts didn't necessarily match. The information BC Eddie and I presented is a few clicks away for anyone who wanted to know.

Though Trump by no means unique in this way, but he is currently the most popular and extreme example of one most often skewed towards ignorance and hyperbole.


----------



## RussT

Dogger, thanks for all you do on this and other forums. I tried to search for information on this question without success. The question relates to subsequent contributions to CPP after the death of a taxpayer and the effect on survivor benefits.

The taxpayer in question passed away in 2017 at the age of 44. He was self-employed. Partly because of the terminal illness of the taxpayer (and the disability of his spouse) they had not filed tax returns for 2015 and 2016. He had no income in 2017. They also did not make any installment payments for those years. After he passed away his spouse applied for CPP survivor benefits for herself and their infant child. I have not yet been able to determine if these benefits are being received. I presume benefits are being received, and that they are based on the deceased taxpayer's contributions up to 2014.

I am beginning to gather information to prepare tax returns for 2015 and 2016. This is not an easy task when neither the taxpayer nor the disabled spouse was particularly good at record-keeping, but we are slowly making progress. It has occurred to me that the estate will be contributing additional CPP premiums based on self-employed earnings in 2015 and 2016. 

Here's the question: It seems reasonable to assume that these contributions should eventually result in improved benefits for the survivors. Is this correct, and if so, does this happen automatically or is it necessary to apply for a review of the taxpayer's contribution history after the tax have been paid?


----------



## Dogger1953

Hi Russ - Any changes to the deceased record of earnings/contributions will certainly cause a recalculation of any benefit already in pay. Whether or not these additional earnings actually increase the amount of the survivor's pension (they certainly can't decrease it) will depend on the amount of earnings. Those years of zero earnings would likely be part of the general (17%) dropout now (dying at age 44 his lowest 4.4 years would be dropped out). If after you calculate his net self-employment for those years they are higher (relative to the YMPE) than at least 4.4 other years, the amount of the survivor's pension will increase. The increase should be automatic and retroactive, but it wouldn't be a bad idea for the surviving spouse to call Service Canada if they don't see an increase in their CPP within 6 months after Revenue Canada assesses those returns.


----------



## RussT

Thanks for the very clear explanation. I will follow up with his spouse as you suggest.


----------



## martik777

Would deferring my spouses CPP reduce the her future survivors benefit assuming she is the survivor and both our CPP benefits are at approx 65% of the maximum?


----------



## Dogger1953

martik777 said:


> Would deferring my spouses CPP reduce the her future survivors benefit assuming she is the survivor and both our CPP benefits are at approx 65% of the maximum?


No, deferring your spouse's CPP retirement pension won't by itself have any impact on the amount of survivor's pension that she will receive if/when you die. This would be true regardless what % of maximum you each are at separately. What could be a small factor is whether her "calculated CPP retirement pension" is going up or down while she is deferring, but this depends on what age she's deferring from/to and what her earnings are (if any) during the deferral period. As I said, this wouldn't ever have a huge impact on her survivor's pension entitlement, but if you're both at 65% it would not be a factor at all.


----------



## naysmitj

Just a quick question on post retirement benefit. 
I started collecting max CPP in January 2017.
I contributed max contributions working in 2017.
My taxes were filed for 2017 at the end of February and my CPP payments have shown up on the Service Canada for 2017.
Do I need to file for PRB, or does it just automatically get added to my CPP monthly payments.


----------



## Dogger1953

naysmitj said:


> Just a quick question on post retirement benefit.
> I started collecting max CPP in January 2017.
> I contributed max contributions working in 2017.
> My taxes were filed for 2017 at the end of February and my CPP payments have shown up on the Service Canada for 2017.
> Do I need to file for PRB, or does it just automatically get added to my CPP monthly payments.


No, you don't have to do anything to receive your PRB. It usually seems to happen in April/May, and you should receive a letter first and then your PRB will get added to your regular CPP, retroactive to January 2018.


----------



## naysmitj

Thanks very much for the info.
Have a great day.


----------



## gardner

If I was a 1%er and earned the YMPE in the first four months of the year, does retiring mid way through the year have any weird effect on dropouts calculated by count of months? In a way I have 4 months of pensionable earnings, and 8 months of zero. But if I use the rough calculation based on whole years, my last 4 months would count as a full 12 months of MPE.


----------



## Dogger1953

gardner said:


> If I was a 1%er and earned the YMPE in the first four months of the year, does retiring mid way through the year have any weird effect on dropouts calculated by count of months? In a way I have 4 months of pensionable earnings, and 8 months of zero. But if I use the rough calculation based on whole years, my last 4 months would count as a full 12 months of MPE.


Hi gardner - If by "retiring" you mean stopping work, the answer is "No" as that year will be counted as 12 months of max pensionable earnings. If by "retiring" you mean starting your CPP however, you would count 4 months of max pensionable earnings towards your regular CPP retirement pension and 8 months of max pensionable earnings towards a post-retirement benefit (PRB).


----------



## gardner

Thanks Dogger. I'm too young to start drawing CPP. I am just quitting work. I took my records from the service canada portal. This did not yet include 2018, but from my pay stubs I am maxed. The "estimate your pension" function showed a figure astonishingly close to the maximum and it seemed too good to be true so I've been working through the numbers using the methodology on your blog. Including this year, I have about 32.7 Max years built up and if I started drawing at 60, am estimating I would get around $690.


----------



## Dogger1953

gardner said:


> Thanks Dogger. I'm too young to start drawing CPP. I am just quitting work. I took my records from the service canada portal. This did not yet include 2018, but from my pay stubs I am maxed. The "estimate your pension" function showed a figure astonishingly close to the maximum and it seemed too good to be true so I've been working through the numbers using the methodology on your blog. Including this year, I have about 32.7 Max years built up and if I started drawing at 60, am estimating I would get around $690.


That sounds about right for an age-60 amount, and based on a total of 32.7 max years you should get approx. $950 if you wait until age 65.


----------



## dadaswell

So Dogger.....I know that you are a little familiar with my situation since I had you do some work for me...which was great BTW.
Anyhow, retired in Nov 2016 and started collecting CPP immediately. 
Then received a big lump sum payment in 2017 of retroactive pay back to 2011. CPP and EI were taken off of that payment. 
Then I also decided to start working again part time at a different job starting in Dec 2017.
Questions: 
WHat happens to that big amount of CPP and EI I had taken off the retroactive lump sum payment I received from my former employer in 2017? 
Does it affect my current CPP payments? 
Also, since I am now working again and making CPP contributions, what does that do to my CPP payout to me?
Thanks Dogger!!


----------



## Dogger1953

dadaswell said:


> So Dogger.....I know that you are a little familiar with my situation since I had you do some work for me...which was great BTW.
> Anyhow, retired in Nov 2016 and started collecting CPP immediately.
> Then received a big lump sum payment in 2017 of retroactive pay back to 2011. CPP and EI were taken off of that payment.
> Then I also decided to start working again part time at a different job starting in Dec 2017.
> Questions:
> WHat happens to that big amount of CPP and EI I had taken off the retroactive lump sum payment I received from my former employer in 2017?
> Does it affect my current CPP payments?
> Also, since I am now working again and making CPP contributions, what does that do to my CPP payout to me?
> Thanks Dogger!!


Hi dadaswell - Any earnings/contributions in 2017 won't affect your regular CPP at all, but it will create a post-retirement benefit (PRB) effective January 2018. The amount of the PRB if your 2017 earnings were max, would be approx. $28.35 monthly (1/40th of the max), adjusted up or down according to your age-adjustment factor as of Jan 2018. If your 2017 earnings were less than max, your PRB would be proportionally less. PRB payments usually occur after your 2017 income tax return is assessed, retroactive to Jan 2018. Any earnings/contributions for 2018 or subsequent years would create a similar PRB as of January of the following year. Once you are age 65, if you're still working you can opt-out of making further CPP contributions or you can continue contributing until age 70 and earn an additional PRB each year. PRBs are added to your regular CPP, but they don't increase any survivor's pension that you will leave behind.


----------



## Marcleclair7

This is my first post on this site, I have been lurking for a while. I have been trying to guide my dad on his timing of when to take CPP and OAS. He is entitled to 802 a month @65, I suggested for him to delay till 68 for both programs. He will be working until 68 and probably maxing the contributions. I’m having a tough time calculating the PRB because a lot of the examples I see are of people taking the CPP and still working. So dogger if you could help me out I’d appreciate it. The OAS is easy to figure I just need CPP help. So I guess for ease if calculations, he’s 65 entitled to 802 a month, delaying 3 years and and maxing out for 3 more years. My calculations came out to around $1100 but I don’t want to be wrong.


----------



## Dogger1953

Marcleclair7 said:


> This is my first post on this site, I have been lurking for a while. I have been trying to guide my dad on his timing of when to take CPP and OAS. He is entitled to 802 a month @65, I suggested for him to delay till 68 for both programs. He will be working until 68 and probably maxing the contributions. I’m having a tough time calculating the PRB because a lot of the examples I see are of people taking the CPP and still working. So dogger if you could help me out I’d appreciate it. The OAS is easy to figure I just need CPP help. So I guess for ease if calculations, he’s 65 entitled to 802 a month, delaying 3 years and and maxing out for 3 more years. My calculations came out to around $1100 but I don’t want to be wrong.


Hi Marc - I should first clarify the PRBs are only payable if someone has earnings/contributions after they are receiving their regular CPP retirement pension, so if your dad delays taking his CPP until age 68 he won't receive any PRBs but his regular CPP retirement pension will be more than if he took it at age 65. Assuming that the $802 estimate at age 65 is accurate and if he works until age 68 earning the maximum, his CPP retirement pension at age 68 will be somewhere between approx $1,045 and $1,115. The reason for this range is because the $802 estimate could be based on a variety of scenarios. I'd need to see his actual record of CPP earnings to do a calculation for him. If you're interested in this service (for a fee), email me at [email protected]


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## indexxx

Hi Dogger- any advice for someone who is thinking of going the self-employment route? And thank you for this great thread; it's very generous of you to take your time and share your expertise.


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## Dogger1953

indexxx said:


> Hi Dogger- any advice for someone who is thinking of going the self-employment route? And thank you for this great thread; it's very generous of you to take your time and share your expertise.


I'm not sure what kind of advice you're thinking I could offer? Certainly self-employment is a good option for a lot of reasons, but CPP probably isn't one of them, because you have to contribute both the employee's share and the employer's share (currently 4.95% each, but soon to increase by a further 1% each). if you have net self-employed earnings in excess of $3,500 though, there's no choice as to whether you contribute or not.


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## Retiredguy

Hi Doug, Another poster was asking about death and disability insurance and I suggested he learn what benefits might be available to him in the event of his death or disability.


Assuming he is Married, 37 yrs old with 2 young children and has lets say 10 M years what could he expect from CPP . If necessary lets say the wife is 35 yrs.


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## Dogger1953

Retiredguy said:


> Hi Doug, Another poster was asking about death and disability insurance and I suggested he learn what benefits might be available to him in the event of his death or disability.
> 
> 
> Assuming he is Married, 37 yrs old with 2 young children and has lets say 10 M years what could he expect from CPP . If necessary lets say the wife is 35 yrs.


To give more accurate estimates, it would be helpful to know what level of earnings he had in the other years since age 18, but based on 10 M years only at age 37, he would be eligible for a CPP disability pension of approx. $1,015 monthly, plus $244.64 monthly for each child. If he died, his wife would receive a CPP survivor's pension of approx. $450 monthly, again plus $244.64 for each child.


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## Beaver101

I have a silly (?) question or two (and I apologize if the answer(s) has been previously posted) here:

When one decided to elect their reduced CPP early (age 61 for example), does their monthly amount changes/adjust when they reach the age of 65? Or does this reduced amount pretty well remain the same (excl. annual CPI indexing) for their lifetime (and that they don't make further contributions.)?

If the regular CPP amount does stay the same, then why is it that when someone on CPP disability (for example) then gets their amount adjusted to regular CPP upon reaching age 65?

I'm puzzled by the logic (?) in the above scenarios.


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## Dogger1953

Beaver101 said:


> I have a silly (?) question or two (and I apologize if the answer(s) has been previously posted) here:
> 
> When one decided to elect their reduced CPP early (age 61 for example), does their monthly amount changes/adjust when they reach the age of 65? Or does this reduced amount pretty well remain the same (excl. annual CPI indexing) for their lifetime (and that they don't make further contributions.)?
> 
> If the regular CPP amount does stay the same, then why is it that when someone on CPP disability (for example) then gets their amount adjusted to regular CPP upon reaching age 65?
> 
> I'm puzzled by the logic (?) in the above scenarios.


Hi Beaver - No, if you take your CPP early at a reduced rate it does not increase to the regular rate at age 65. It is payable at the reduced rate for life (except for annual CPI increases and extra PRBs for additional contributions).

The rationale is simple. If it did increase at age 65, who wouldn't take it early? For example, if you could receive $640 at age 60 that would increase to $1,000 at age 65, who would choose to wait until age 65 only to receive the same amount of $1,000?

Receiving a CPP disability pension that converts to a regular CPP retirement pension is entirely different. They don't make a choice to become disabled. They are receiving a disability pension because they are unable to work. They will receive the disability pension until they recover or reach age 65, at which point the disability pension ends and the regular CPP retirement pension begins. Should they receive less at age 65 because they were disabled?


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## Beaver101

Hi Doug, thanks for your quick reply.



> The rationale is simple. If it did increase at age 65, who wouldn't take it early? For example, if you could receive $640 at age 60 that would increase to $1,000 at age 65, who would choose to wait until age 65 only to receive the same amount of $1,000?


 ... it would seems that is a simple rationale but wouldn't the (36%) reduction be the penalty for taking it earlier?



> Receiving a CPP disability pension that converts to a regular CPP retirement pension is entirely different. They don't make a choice to become disabled. They are receiving a disability pension because they are unable to work. They will receive the disability pension until they recover or reach age 65, at which point the disability pension ends and the regular CPP retirement pension begins.


 ... fair enough because 65 is the standard age for retirement. 



> Should they receive less at age 65 because they were disabled?


 ... great point. Well, if they remain disabled after age 65, then I understand they would get their regular CPP in which case it could be considerably less than their disability CPP (aka CPPD) so that doesn't seem fair. 


While the above 2 scenarios/concepts are different, however, the treatments don't seem equitable at age 65.


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## Dogger1953

Beaver101 said:


> Hi Doug, thanks for your quick reply.
> 
> ... it would seems that is a simple rationale but wouldn't the (36%) reduction be the penalty for taking it earlier?
> 
> ... fair enough because 65 is the standard age for retirement.
> 
> ... great point. Well, if they remain disabled after age 65, then I understand they would get their regular CPP in which case it could be considerably less than their disability CPP (aka CPPD) so that doesn't seem fair.
> 
> 
> While the above 2 scenarios/concepts are different, however, the treatments don't seem equitable at age 65.


The 36% reduction is the "penalty" for taking it early, but if it disappeared at age 65, what would be the penalty?

My goal is really to clarify the the CPP rather than to justify it, but I don't see any inequity. The one person has chosen to receive a smaller retirement pension at an earlier age. The other person was disabled and received a pension because they couldn't work until age 65. That's all there is to it.


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## Beaver101

Dogger1953 said:


> The 36% reduction is the "penalty" for taking it early, but if it disappeared at age 65, what would be the penalty?


 ... but that becomes a "lifetime" penalty which is rather harsh. I hope whoever came up with that or those reduction numbers is Einstein precise.



> *My goal is really to clarify the the CPP rather than to justify it*, but I don't see any inequity. The one person has chosen to receive a smaller retirement pension at an earlier age. The other person was disabled and received a pension because they couldn't work until age 65. That's all there is to it.


 ... okay, got you.


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## Retiredguy

Beaver101 said:


> ... but that becomes a "lifetime" penalty which is rather harsh. I hope whoever came up with that or those reduction numbers is Einstein precise.
> 
> ... okay, got you.



Its just an option... if it's too harsh for you, take it at the normal age 65 and get (your) 100%, .... or delay until 70 and get 42% more. Pretty simple, do whats best for you, not harsh at all really.


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## Beaver101

Retiredguy said:


> Its just an option... if it's too harsh for you, take it at the normal age 65 and get (your) 100%, .... or delay until 70 and get 42% more. Pretty simple, do whats best for you, not harsh at all really.


 ... yep, will take at 60 as need the money as currently disabled and no company pension to rely on. And pretty soon, savings will be depleted.


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## OptsyEagle

Beaver101 said:


> ... but that becomes a "lifetime" penalty which is rather harsh. .


But as he said, if it reverted back to the regular CPP at 65, there would be no penalty.

Ask yourself how long you would need to take to decide on the following two options, as you say would be more fair:

1) Nothing between age 60 and age 65 and then regular CPP at age 65 for life

or 

2) 64% of CPP between age 60 and age 65 and then regular CPP at age 65 for life.

Do you understand now?


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## Beaver101

^ Nope, or are you expecting me to say "Are we ever-so lucky to be able to take it early at age 60?"


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## OptsyEagle

Beaver101 said:


> ^ Nope, or are you expecting me to say "Are we ever-so lucky to be able to take it early at age 60?"


I am expecting you to see that if the reduced amount did not continue after age 65 then taking your benefits at age 60 would obviously be far better then waiting to age 65. 

Remember all the contributions were based on a person taking their CPP at age 65. The ability to take it earlier, without giving everyone a big CPP bonus, can only be paid for by reducing the benefit for life...not just till age 65.

Go back and look at my examples again. The only difference in the choices that you think are more fair is the person that takes it earlier gets extra CPP. A person cannot get EXTRA CPP unless it is paid for in some way.

Anyway, if you can't see that, then I doubt anyone can help you. Just be glad that someone who does understand it is running things.


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## Retiredguy

Beaver101 said:


> ... yep, will take at 60 as need the money as currently disabled and no company pension to rely on. And pretty soon, savings will be depleted.



Your post suggests that you will be eligible for the GIS at age 65, if correct then taking your CPP at age 60 is likely best for you as a higher CPP will reduce your GIS by approx. .50 for every additional $ of CPP.


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## Retiredguy

I won't say "lucky" but if you're nearly out of savings it's fortunate that taking it at 60 is an option for you. The Einsteins that developed the plan could have been "ultimately sophisticated" and "simply" said no option 60... its 65 for everyone. *Question, if you're totally disabled why have you not applied for CPP disability?* If eligible it provides a very significant advantage (option !) for you.


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## indexxx

Hi Dogger- I have a two part question about CPP.

First is, how does being on extended worker's compensation affect my CPP? Is there a portion of my benefits that contribute, or will I miss out on contributing during that time? If I miss out due to my claim, does that subtract from my total years paid in? 

Secondly, how does being in college affect CPP?

Thank you.


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## Dogger1953

indexxx said:


> Hi Dogger- I have a two part question about CPP.
> 
> First is, how does being on extended worker's compensation affect my CPP? Is there a portion of my benefits that contribute, or will I miss out on contributing during that time? If I miss out due to my claim, does that subtract from my total years paid in?
> 
> Secondly, how does being in college affect CPP?
> 
> Thank you.


Being on WCB would count as a period of zero earnings, as would being in college (assuming that you weren't also working at that same time. As such, these periods of time would lower your lifetime average earnings and thus your CPP benefits, unless you were able to use them as part of your 17% general dropout period, in which case they wouldn't necessarily hurt you at all. So, the real answer depends on what your earnings record is like outside of these two periods of time.


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## Pluto

In another thread someone posted that a guy who is 80 now, would benefit from undercontributing to cpp. True, or false?


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## Dogger1953

Pluto said:


> In another thread someone posted that a guy who is 80 now, would benefit from undercontributing to cpp. True, or false?


Hi Pluto - I have no idea what undercontributing to CPP might even mean, but nobody can make any type of CPP contribution after age 70, so I think the answer would be "False".


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## Retiredguy

Dogger1953 said:


> Hi Pluto - I have no idea what undercontributing to CPP might even mean, but nobody can make any type of CPP contribution after age 70, so I think the answer would be "False".


Further to Pluto's comment. The 80 yr old (was a hypothetical in the other post) was 65 in 2003 and we know that the CPP was being chronically underfunded since inception until the late 90"s when Paul Martin righted the ship. Also the now 80 yr old benefited from having to work less years to get the max CPP. His lifetime # of years was 2003-1966 = 37 - 15% drop out = 31.45 years to get maximum CPP benefit whereas the present contributors have to work 39 to get the max CPP. In both cases assuming max contributions are made.


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## indexxx

Dogger1953 said:


> Being on WCB would count as a period of zero earnings, as would being in college (assuming that you weren't also working at that same time. As such, these periods of time would lower your lifetime average earnings and thus your CPP benefits, unless you were able to use them as part of your 17% general dropout period, in which case they wouldn't necessarily hurt you at all. So, the real answer depends on what your earnings record is like outside of these two periods of time.


Thank you for the fast reply. I wasn't sure if my wage replacement from WCB also included CPP contribution as part of the compensation- seems like it would but I guess not. I will be working one day a week while in school, which lasts 20 months; my WCB is about 19 months. My lifetime includes 6 years living abroad, so it looks like I will be over the 17 percent rule- assuming it goes from age 18 to 67, that leaves 49 potential years and 17 percent of that is 8.33. In total it will be close to nine and a half years of no full time employment income in Canada. How does this affect my CPP?


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## Dogger1953

indexxx said:


> Thank you for the fast reply. I wasn't sure if my wage replacement from WCB also included CPP contribution as part of the compensation- seems like it would but I guess not. I will be working one day a week while in school, which lasts 20 months; my WCB is about 19 months. My lifetime includes 6 years living abroad, so it looks like I will be over the 17 percent rule- assuming it goes from age 18 to 67, that leaves 49 potential years and 17 percent of that is 8.33. In total it will be close to nine and a half years of no full time employment income in Canada. How does this affect my CPP?


If you apply for your CPP at age 65 or later (and don't qualify for the child-rearing dropout), your CPP retirement will always be based on your best 39 years of earnings. That is because you can drop out 2 years under the "over age 65 dropout" plus 8 years under the 17% dropout.


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## Dogger1953

Retiredguy said:


> Further to Pluto's comment. The 80 yr old (was a hypothetical in the other post) was 65 in 2003 and we know that the CPP was being chronically underfunded since inception until the late 90"s when Paul Martin righted the ship. Also the now 80 yr old benefited from having to work less years to get the max CPP. His lifetime # of years was 2003-1966 = 37 - 15% drop out = 31.45 years to get maximum CPP benefit whereas the present contributors have to work 39 to get the max CPP. In both cases assuming max contributions are made.


Thanks for this explanation. Now I understand the premise of the question/comment. So my answer changes to "True", and even moreso for someone who turned age 65 in January 1976 and received a maximum CPP based on only 10 years of maximum earnings/contributions from 1966 thru 1975.


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## hehehaha

*need help*

turning 60 years old 2019 and i will not work anymore. i have applied the allowance right now, if i get my cpp at age 60, does the cpp affect the amount of allowance?
thank you


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## Dogger1953

hehehaha said:


> turning 60 years old 2019 and i will not work anymore. i have applied the allowance right now, if i get my cpp at age 60, does the cpp affect the amount of allowance?
> thank you


It's no laughing matter, but "yes" any CPP that you receive will reduce the amount of your "Allowance".


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## moderator2

Dogger1953, thanks for your contributions here and willingness to share your CPP expertise. We appreciate it!


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## Dogger1953

moderator2 said:


> Dogger1953, thanks for your contributions here and willingness to share your CPP expertise. We appreciate it!


Thanks very much. I appreciate the opportunity to share my knowledge!


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## hfp75

Dogger,

I am currently 43 and working FT. We are close to having our 3rd child. With the first 2 my wife took 1 yr maturity leaves and I followed with a 1 Yr leave (paturnity & unpaid). My first unpaid leave was from Jan to Jan and that year I had virtually no income. The second unpaid leave (currently) will be from August / 18 to March / 19 (little less than a Yr). My third unpaid leave will be from Summer / 20 to summer / 21. Obviously these unpaid leave will effect my Gross income, and thus my CPP. In this situation what is the penalty I will pay later or will it not matter ? I make about $110 / Yr from this job. I have another PT job that I make 10-20K at.

Thanks,

Hans


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## Dogger1953

hfp75 said:


> Dogger,
> 
> I am currently 43 and working FT. We are close to having our 3rd child. With the first 2 my wife took 1 yr maturity leaves and I followed with a 1 Yr leave (paturnity & unpaid). My first unpaid leave was from Jan to Jan and that year I had virtually no income. The second unpaid leave (currently) will be from August / 18 to March / 19 (little less than a Yr). My third unpaid leave will be from Summer / 20 to summer / 21. Obviously these unpaid leave will effect my Gross income, and thus my CPP. In this situation what is the penalty I will pay later or will it not matter ? I make about $110 / Yr from this job. I have another PT job that I make 10-20K at.
> 
> Thanks,
> 
> Hans


Hi Hans - Can I assume that you mean your salary is $110k, not just $110 per year? If so, it won't make much difference because your gross salary should still be close to the YMPE for all but the one full year that you took off. For that one year, you may be able to use it as one of your dropout under either the 17% general dropout or the child-rearing dropout, in which case it won't affect your CPP at all. Worst-case scenario, even if you had to include that year for your CPP calculation, the maximum effect of one year of zero earnings on an age-65 CPP is approx. $30 per month. Your PT earnings would reduce that impact to approx. $20 per month.


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## fireseeker

Hi Dogger,
I have an odd question about dropout years.
What happens in the case where a person works more than 39 years but has many years of modest income?
The specific scenario I'm curious about is this: You're 62 and you've worked for 39 years, which I think is the effective CPP maximum once you take into account the 8 dropout years.
Let's say you work for your 63rd year, but earn, say, half of YMPE. Let's also say that your ninth lowest earning year was also half of YMPE. Given that the two are equal (and only one can be dropped out), would there be any change to CPP entitlement?
If not, would it mean that CPP contributions in that 40th year of work would effectively be lost?
(I realize this is an unusual and highly specific scenario. But my wife may be close to it: working part-time at 60 and earning YMPE income that roughly matches her modest earnings in her 20s.)


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## Dogger1953

fireseeker said:


> Hi Dogger,
> I have an odd question about dropout years.
> What happens in the case where a person works more than 39 years but has many years of modest income?
> The specific scenario I'm curious about is this: You're 62 and you've worked for 39 years, which I think is the effective CPP maximum once you take into account the 8 dropout years.
> Let's say you work for your 63rd year, but earn, say, half of YMPE. Let's also say that your ninth lowest earning year was also half of YMPE. Given that the two are equal (and only one can be dropped out), would there be any change to CPP entitlement?
> If not, would it mean that CPP contributions in that 40th year of work would effectively be lost?
> (I realize this is an unusual and highly specific scenario. But my wife may be close to it: working part-time at 60 and earning YMPE income that roughly matches her modest earnings in her 20s.)


Hi fireseeker - I don't think your wife's situation is unusual at all, and you're 100% correct in your analysis (assuming that she's not eligible to drop out any years under the child-rearing dropout). As you state, the current CPP calculation never uses more than 39 years of earnings in determining the amount of a retirement pension. Once you have 39 years of any level of earnings, your 40th year of earnings will always be worth less than it otherwise would be and if it's not higher (in terms of % of YMPE) than your 8th lowest year, it's worthless. 

At least that's always true for earnings prior to 2019. For 2019 onwards (at least for the next forty years), even if your 40th year of earnings doesn't increase your basic CPP calculation, it will increase the "enhanced" portion of the calculation. Read this article to better understand how much the enhanced CPP earnings will affect the amount of your wife's CPP: https://retirehappy.ca/enhanced-cpp/


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## martik777

What is the best strategy to maximize my spouses CPP plus my survivors pension assuming I die first. 

Let's say my CPP is 800 and her's is 700 at 65. Would she benefit by deferring until 70 or would this reduce the amount of the survivor's CPP? 

If she takes it at 65, how would this effect the survivor's CPP

Thanks


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## Dogger1953

martik777 said:


> What is the best strategy to maximize my spouses CPP plus my survivors pension assuming I die first.
> 
> Let's say my CPP is 800 and her's is 700 at 65. Would she benefit by deferring until 70 or would this reduce the amount of the survivor's CPP?
> 
> If she takes it at 65, how would this effect the survivor's CPP
> 
> Thanks


Hi Martik - If the goal is to maximize her CPP after your death, then having her defer her CPP until age 70 is definitely the best strategy. This is because it maximizes her own CPP retirement and has absolutely no impact (up or down) on the survivor's pension that she will receive after your death. With the sample amounts that you have provided, her combined CPP retirement/survivor's benefit would be approx. $988 if she takes her CPP at age 65 or approx. $1,282 if she takes her CPP at age 70.

Read this article if you want to better understand the combined retirement/survivor's benefit calculation formula: https://retirehappy.ca/cpp-survivor-benefits/


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## martik777

Well I did something right since I also got $288 for the combined survivors benefit portion but I didn't understand there would be no impact on this amount if CPP was deferred.

Thanks!


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## indexxx

It may have been asked already, but what do I do in the case of self-employment? I have a part-time gig as a courier and essentially I am an independent contractor (it's with Skip The Dishes). How do I pay into my CPP? Do I do it at tax time? And what percentage of my earnings do I need to or am I allowed to contribute?


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## Dogger1953

indexxx said:


> It may have been asked already, but what do I do in the case of self-employment? I have a part-time gig as a courier and essentially I am an independent contractor (it's with Skip The Dishes). How do I pay into my CPP? Do I do it at tax time? And what percentage of my earnings do I need to or am I allowed to contribute?


Yes, you will calculate and pay any required CPP contributions at tax time, based on your net earnings. The current % for self-employed earnings is 9.9%, but that will increase to 11.9 gradually over the next 5 years, starting with 2019.


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## indexxx

Dogger1953 said:


> Yes, you will calculate and pay any required CPP contributions at tax time, based on your net earnings. The current % for self-employed earnings is 9.9%, but that will increase to 11.9 gradually over the next 5 years, starting with 2019.


Thank you Dogger- that's what I'd assumed but wanted to make sure. I have a very good accountant so he'll be able to set me up.


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## OptsyEagle

I am doing some estate planning for my wife if she lasts longer then I do. Odds are probably in her favour.

Anyway, with respect of the CPP survivor's benefit. This link:

https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-survivor-pension.html

says that depending on whether she is over 65 or under 65 she gets the following:

Under 65: Flat rate (around $189.31) plus 37.5% of my retirement pension
Over 65: 60% of my retirement pension

But it says: "if the surviving spouse or common-law partner is not receiving other CPP benefits"

Since we are about the same age it is unlikely that I would die after she is age 65 and that she would not be receiving her CPP retirement pension. So what does she get if she is getting her retirement pension? It doesn't say. I have beat it to death. Does that mean she gets the shaft. All my contributory years down the toilet?


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## Dogger1953

OptsyEagle said:


> I am doing some estate planning for my wife if she lasts longer then I do. Odds are probably in her favour.
> 
> Anyway, with respect of the CPP survivor's benefit. This link:
> 
> https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-survivor-pension.html
> 
> says that depending on whether she is over 65 or under 65 she gets the following:
> 
> Under 65: Flat rate (around $189.31) plus 37.5% of my retirement pension
> Over 65: 60% of my retirement pension
> 
> But it says: "if the surviving spouse or common-law partner is not receiving other CPP benefits"
> 
> Since we are about the same age it is unlikely that I would die after she is age 65 and that she would not be receiving her CPP retirement pension. So what does she get if she is getting her retirement pension? It doesn't say. I have beat it to death. Does that mean she gets the shaft. All my contributory years down the toilet?


Hi OE - I'll try to remember to give you a more detailed reply when I return from my holiday, but try googling my articled called "Understanding the CPP Survivor's pensions" on the Retire Happy website.

For now however, let me tell you that the amount that she will receive depends on your "calculated retirement pension" (regardless when you actually starts receiving it), on her age, on her "calculated retirement pension" and on what age she starts receiving her CPP,

In simple terms, once she's over age 65 and receiving her own CPP, the survivor's pension will be the lesser of two amounts, as follows:
1) an amount that when added to her calculated retirement pension (prior to any age-adjustment reduction or increase) equals the maximum for an age-65 CPP, or
2) 60% of your calculated retirement pension minus the lesser of 40% of itself or 40% of her own calculated retirement pension.

Finally, if she started receiving her own CPP prior to age 65, her own CPP retirement pension would also be increased by a portion of what the survivor's pension is reduced from the full 60%.

If this is all too complicated, email me at [email protected] and I will do these calculations for you (for a fee).


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## OptsyEagle

That did not make it any clearer. It seems to me that there is an error in the calculation of Option A in this article:

https://retirehappy.ca/cpp-survivor-benefits/

The article tells you that the combined CPP benefit cannot be greater then the maximum CPP benefit that a single person can have. It goes to great length in pointing out that if you start your CPP before 60 that the MAXIMUM is not the age 65 maximum but 64% of that, if started at age 60. OK, no problem. Then the article uses an example of a person who starts CPP at age 60 and instead of using the 64% maximum it uses the age 65 maximum.

I am assuming that is in error but I cannot be sure. Perhaps I am missing something. I know I cannot figure out the rest, so figuring out this part out is of no help. Perhaps I have it wrong. Anyway, I guess I will just tell my wife that she will get more then her personal share and less then both our shares and good luck. Nice knowing you. It was a blast.

I have programmed robotic equipment that was less confusing then this.


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## Dogger1953

OptsyEagle said:


> That did not make it any clearer. It seems to me that there is an error in the calculation of Option A in this article:
> 
> https://retirehappy.ca/cpp-survivor-benefits/
> 
> The article tells you that the combined CPP benefit cannot be greater then the maximum CPP benefit that a single person can have. It goes to great length in pointing out that if you start your CPP before 60 that the MAXIMUM is not the age 65 maximum but 64% of that, if started at age 60. OK, no problem. Then the article uses an example of a person who starts CPP at age 60 and instead of using the 64% maximum it uses the age 65 maximum.
> 
> I am assuming that is in error but I cannot be sure. Perhaps I am missing something. I know I cannot figure out the rest, so figuring out this part out is of no help. Perhaps I have it wrong. Anyway, I guess I will just tell my wife that she will get more then her personal share and less then both our shares and good luck. Nice knowing you. It was a blast.
> 
> I have programmed robotic equipment that was less confusing then this.


Hi OE - I'm sorry that you found my explanation to be unclear. It is a complicated matter. I'd just like to clarify that my article does not say that the maximum is the 64% amount. Rather it says that in applying the maximum you use the "calculated retirement pension" of the survivor (which is their amount prior to any age-adjustment up or down), which has the same effect as using the 64% amount. This is a subtle but very important distinction.

If you provide me with each of your "calculated retirement pension amounts" (ie., your age-65 estimates) and what age you think your wife will take her own CPP, I'll try to give you an estimate in this forum (possibly after my holiday ends).


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## OptsyEagle

Not blaming you. Most likely it is me.

Anyway, my wife and I are both 54. This is just for estate planning reasons.

We expect to take CPP at age 60 and credit split. I have contributed more then her but basically I just calculated her benefit payable and my benefit payable and divided them by 2 for the split. I know they take into account the years we were married but that happened at age 23 and the contributions for either of us were not much before that. As for the removal years. We have no children and retired at age 52. So I am using the years 53-60 as my backing out years and since I am not contributing I used that to justify taking it at 60. Anyway, let's keep this to survivor benefits.

Using 2019 YMPE's I had each of us getting at age 60 (using 64% of age 65 benefit):

Her: Age 60 = $492.93 per month
Him:Age 60 = $631.25 per month

Split = $562.09 (just the average of the two-hoping it is close enough)

From that I cannot really figure out what she would get if I die. I suppose it would be interesting to know what I would get if she died but I can deal with that at that time. None of these numbers are going to make or break us but I do like knowing how it works and the ability to double check other people's calculations. My wife will be more trusting.

Enjoy your vacation. This can certainly wait but anything you can contribute, when you can contribute it, will be appreciated.


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## Dogger1953

Hi OE - These figures are really rough, because I don't have a calculated with me.

First, the "split" is called "sharing" if you're still together and it ends with death of either party so it's not relevant to CPP survivor calculations.

Second using your age-60 amount of $631.25, I'll consider your "calculated CPP" as being approx $950 and your wife's age-60 amount of $492.93 means that her calculated CPP would be approx $750. If your wife was over age 65 and not receiving her own CPP her survivor's pension after your death would be approx $570 (60% of $950).

Because she will be receiving her own CPP, it will be the lesser of:

A - an amount that when added to her own calculated CPP equals the maximum, which would be approx $1134 - $750 = $384, 
OR
B - 60% of $950 = $570 minus the lesser of:
1) 40% of itself = $228
or
2) 40% of her own calculated CPP (40% of $750 = $300)

The lesser of 1) or 2) is $228 so the answer to B is $570 - $228 = $342.

The lesser of A) or B) is $342, so her CPP survivor's pension would be $342.

Because she took her CPP At age 60 with a 34% reduction and because her survivor's pension was reduced by $228 ($570 - $342) when it was combined with her own CPP, her own CPP would be increased by a "special adjustment" equal to 34% of the reduction or approx $80 (34% of $228 - remember I don't have a calculated with me).

After your death, she would therefore receive her own CPP of approx $572.93 ($492.93 + $80) plus your survivor's amount of $342 for a grand total of $914.93.


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## OptsyEagle

WOW. I have to assume the CPP people had to deal with a lot of stuff to come up with all that. It wasn't just helpful, it was a necessity. I doubt I could have ever got the math to the end point on that one. Just too confusing.

Thank you very much for your help.


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## Beaver101

^


> *WOW. *I have to assume the CPP people had to deal with a lot of stuff to come up with all that.


 ... +1.

After reading all that math whizzy arithmetics in post #552, it looks like OE's survivor will be $35.07 short per month. Is that correct?


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## OptsyEagle

I made an attempt to transpose Dogger's numbers, that he remarkably did without a calculator, with new ones I tried to do, with a calculator.

Instead of 914.93 I came up with $928.49. Pretty darn close. Anyway, we are currently expecting $562.09 of CPP each or $1,124.18 combined.

So if she ends up getting $928.49, she is out $195.69. 

The unfortuneate part of all this is it seems she will lose pretty much all my OAS of around $587 per month. The other thing she loses is my personal tax exemption of $12,069 and age exemption (after 65) of 7,333 and pension credit of $2,000. Without those tax exemptions the tax bill will rise by over $357 per month. In our case, there are no other pensions or income of concern.

She will save the 20% tax I would have paid on those lost government benefits. That would save her around $156 per month.

Adding the losses and subtracting the taxes saved on the lost government income her combined hit is around $982 per month. Almost $12,000 per year.

Now that I see this I think I better hang around. I can't afford to go. lol.


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## Retiredguy

Beaver101 said:


> ^ ... +1.
> 
> After reading all that math whizzy arithmetics in post #552, it looks like OE's survivor will be $35.07 short per month. Is that correct?


Where Doug stated 34% in a couple of instances I believe he meant 36%. 

One thing that is guaranteed is that a surviving spouse who receives their own CPP will NEVER get 60% of the deceased's CPP. It will always be less and can be substantially less.

Lets say a couple both started their own CPP at age 65. His is 1000, hers is 700. He dies.

1). 1000 x .60 = 600 x. 40 = *240*.

2). 700 x .40 = *288*.

240 is lessor than 288 so the 240 is deducted from his notional 60% benefit. 600 - 240 = 360. Her survivor pension is 360, (only 36% of his 1000).

Her income then is 700 of her CPP plus 360 survivor benefit = 1060.

_*If she did not have her own CPP* then her survivors benefit would be 60% of his 1000 = 600.
_


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## OptsyEagle

For anyone reading this, I don't want to turn this CPP thread into an Estate planning thread, but I will add one last comment.

When reviewing the results one might think that it is unfair that a person, recently widowed, would then be subjected to lost income in the neighbourhood of $12,000 per year. I think most Canadian couple's would see about the same loss and probably more if they have work pensions.

Whether this is right or wrong is open to each person's opinion, but in reviewing where the losses are taking place one cannot really see anyway to rectify it with changes to CPP/OAS rules or tax laws. CPP benefits would have an actuarial component to its sustainability, which takes into account that some will live longer lives and others shorter. 

With OAS and the other tax exemptions. Those are lost benefits for someone who does not exist anymore. Are they really lost. Some Canadians will have never married and others who did marry, were divorced or widowed long before they looked into their retirement plans. They would never have even factored those incomes into their retirement plans, so did they lose it as well.

Crying over lost benefits, that I don't even get right now, would be the epitome of entitlement expectations. I like to think I am not that pathetic and hope that others looking at this are not as well. Canada is probably one of the best countries in the world to live in so I am not going to whine about Canada to die in. It was just interesting to see how it all works. 

Thanks for Dogger's help. The number I came up with before I asked my questions was no where near the right one, so koodos to Dogger for his help.


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## Retiredguy

Yes in the event of death it's entirely possible because assets are transferred to the surviving spouse that they could lose, both OAS pensions and one full CPP. Plus the personal tax exemption, pension credit amount and some of the seniors amount.


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## Dogger1953

Beaver101 said:


> ^ ... +1.
> 
> After reading all that math whizzy arithmetics in post #552, it looks like OE's survivor will be $35.07 short per month. Is that correct?


Hi Beaver - I guess it depends on what you mean it's shorter than, but if the survivor's pension is reduced by $228 and her retirement pension is increased by $80, I would say that she is short $148 due to the combined benefit calculations.


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## Dogger1953

Retiredguy said:


> Where Doug stated 34% in a couple of instances I believe he meant 36%.
> 
> One thing that is guaranteed is that a surviving spouse who receives their own CPP will NEVER get 60% of the deceased's CPP. It will always be less and can be substantially less.
> 
> Lets say a couple both started their own CPP at age 65. His is 1000, hers is 700. He dies.
> 
> 1). 1000 x .60 = 600 x. 40 = *240*.
> 
> 2). 700 x .40 = *288*.
> 
> 240 is lessor than 288 so the 240 is deducted from his notional 60% benefit. 600 - 240 = 360. Her survivor pension is 360, (only 36% of his 1000).
> 
> Her income then is 700 of her CPP plus 360 survivor benefit = 1060.
> 
> _*If she did not have her own CPP* then her survivors benefit would be 60% of his 1000 = 600.
> _


Hi RetiredGuy - You're correct that I meant 36% and not 34%. You'd think I could have done that right even without a calculator!

More importantly, you're correct in all of your other points/calculations also.


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## dubmac

Dogger,

My wife and I are doing our 5 year plan - checking wills, ensuring other financial matters - pensions are part of this review. I'm 58 now, with contributions that date from 1979. Of the 36 years of contributions, 27 (including 2018) are at YMPE, 2 are close to max, and others vary. I plan to work another 3-5 years, and will max out YMPE. Service Canada has a monthly expected pension of 1150 per month right now for me.

Recently, my wife has returned to the workforce, part-time. She will earn around 13-15 K per year. She has some early CPP contributions (1980's, early 1990's)- perhaps 3 years YMPE, and 4 others. She took 23 years out when our kids were small, and I am aware that there is some pension accommodation for individuals who leave for paternity/maternity reasons. She said her expected CPP pension is around 200 per month last time she checked.

You published on your site that each year contribution at YMPE = $25 per year in pension. If someone contributes 20% of YMPE, then I assume that the effect of $5 per year in added pension. Is this analysis correct? 

How much of an effect will this (late) contribution have on her CPP pension benefits? Is it *worthwhile for her to contribute for the next 3-4 years? - maybe better to opt out and put $ into TFSA?


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## Mukhang pera

dubmac said:


> How much of an effect will this (late) contribution have on her CPP pension benefits? Is it *worthwhile for her to contribute for the next 3-4 years? - maybe better to opt out and put $ into TFSA?


Is it permissible for an ordinary employee to opt out of CPP? Or is she something other than an ordinary employee? Just asking because my wife has recently started work, with expected earnings of $20,000 - $30,000/yr. But I doubt she'll put in many years and any ultimate CPP entitlement will be a pittance and might reduce her survivor's benefit when I go. So opting out might make sense, but I have never heard of such a thing.


----------



## Dogger1953

dubmac said:


> Dogger,
> 
> My wife and I are doing our 5 year plan - checking wills, ensuring other financial matters - pensions are part of this review. I'm 58 now, with contributions that date from 1979. Of the 36 years of contributions, 27 (including 2018) are at YMPE, 2 are close to max, and others vary. I plan to work another 3-5 years, and will max out YMPE. Service Canada has a monthly expected pension of 1150 per month right now for me.
> 
> Recently, my wife has returned to the workforce, part-time. She will earn around 13-15 K per year. She has some early CPP contributions (1980's, early 1990's)- perhaps 3 years YMPE, and 4 others. She took 23 years out when our kids were small, and I am aware that there is some pension accommodation for individuals who leave for paternity/maternity reasons. She said her expected CPP pension is around 200 per month last time she checked.
> 
> You published on your site that each year contribution at YMPE = $25 per year in pension. If someone contributes 20% of YMPE, then I assume that the effect of $5 per year in added pension. Is this analysis correct?
> 
> How much of an effect will this (late) contribution have on her CPP pension benefits? Is it *worthwhile for her to contribute for the next 3-4 years? - maybe better to opt out and put $ into TFSA?


Hi dubmac - The $25 amount was from a few years ago, and it's risen to nearly $30 now. Due to her eligibility to the child-rearing dropout, it may even increase to almost $40 for her. Aside from that your analysis is correct.

Since there is no ability for her to opt out of CPP it's a moot point, but I would seriously doubt that she would be better off putting her CPP contribution amount into a TFSA or anything else.


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## Dogger1953

Mukhang pera said:


> Is it permissible for an ordinary employee to opt out of CPP? Or is she something other than an ordinary employee? Just asking because my wife has recently started work, with expected earnings of $20,000 - $30,000/yr. But I doubt she'll put in many years and any ultimate CPP entitlement will be a pittance and might reduce her survivor's benefit when I go. So opting out might make sense.


Hi MP - As per my previous answer, there is no ability to opt out of CPP for an ordinary employee. You make a valid point about the impact on survivor's benefit after your death, but that would only be a significant factor if she outlives you for a long time. And again, since there is no other option......


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## Mukhang pera

Dogger1953 said:


> Hi MP - As per my previous answer, there is no ability to opt out of CPP for an ordinary employee. You make a valid point about the impact on survivor's benefit after your death, but that would only be a significant factor if she outlives you for a long time. And again, since there is no other option......


Thanks Dogger.

My guess is she will work at about the $25,000/yr. level for about the next 4 years. Paid employment beyond that is unlikely. She is not yet 40 and has past CPP contributions on a few years' earnings of about $5,000 a year. Her outliving me by 30 years or better is likely, and that's assuming I make it to close to 100 as did my parents.

P.S.: Are you not supposed to be on vacation? Maybe better get going!


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## Yasehtor

Hi Dogger,

I have a question on behalf of my brother who turns 60 in August of this year. 

According to Service Canada it tells him the following: 

_The maximum retirement pension monthly amount at age 65 for this year is: $1,154.58

If you were 65 today,

you could receive a monthly retirement pension of: $1,091.62

If you apply at the age of 60,

you could receive a monthly retirement pension of: $698.64

If you apply at the age of 70,

you could receive a monthly retirement pension of: $1,550.10_

He will have may have some employment income over the next 5 years but it would be in the $5-12,000 range at most. 


Based on the info above it looks like his breakeven point is approximately age 74 (assuming I calculated it properly... ) 

$ of Pension Age 60-65 = (698.64*60) = 41,918.40
Divided by 
Difference in Monthly Pension $ = 1,091.62-698.64 =392.98
Equals months to breakeven= 106.668 months
Divide by 12
= 8.889 years
Added to age 65 = 73.889 years.

He would like to know if he waits to receive his CPP whether low earnings from now til age 65 will have a negative impact on his penison. Also if he takes it early what if any impact with the additional CPP have on his pension given that his earnings from 60-65 are so low.

Appreciate any info you can provide.. Thanks.


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## Dogger1953

Hi Yasehtor - I'd need to see your brother's complete CPP record of earnings in order to provide any calculations, and I charge for that service. Based on the information that you have provided however, I think that I can safely say that if he waits until age 65 his CPP calculation will almost certainly be less than $1,091.62 (in 2019 dollars) due to his lower earnings from age 60 to 65, and if he takes his CPP at age 60 his subsequent earnings will create additional PRBs. Both of these facts will extend his breakeven age that you have calculated.


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## dubmac

Thanks Dogger. One last question as I finish up some year end (which has become year start) planning.
When I look at my historical CPP contributions, 2 years (1987, 1988) are very, very close to YMPE - (within $500 of the max amount). 
How much of an effect would having 2 years that are close (but did not meet YMPE) have on payout?


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## Dogger1953

dubmac said:


> Thanks Dogger. One last question as I finish up some year end (which has become year start) planning.
> When I look at my historical CPP contributions, 2 years (1987, 1988) are very, very close to YMPE - (within $500 of the max amount).
> How much of an effect would having 2 years that are close (but did not meet YMPE) have on payout?


If both of those years were exactly $500 short of the YMPE, it would reduce your CPP at age 65 by $1.13 per month, in 2019 dollars.


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## OptsyEagle

dubmac said:


> Thanks Dogger. One last question as I finish up some year end (which has become year start) planning.
> When I look at my historical CPP contributions, 2 years (1987, 1988) are very, very close to YMPE - (within $500 of the max amount).
> How much of an effect would having 2 years that are close (but did not meet YMPE) have on payout?


and please tell me that those only two years with just $500 below YMPE are the 2 years you have left AFTER you removed your backout years. If this is not the case, may I ask, what kind of money were you earning when you were 18 years old?


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## Eclectic12

Maybe I am missing something ... where one hasn't hit YMPE with one job and no other sources of income, then the 1987 earnings should be $25,900 - $500 = $25,400 or so. Similarly, 1988 would be $26,500 - $500 = $26,000 or so.

http://drpensions.ca/cpp-rate-table.html

I have no idea if the age is correct.


Cheers


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## dubmac

Sorry..I made an error, I was short the YMPE in 1988 and 1989 (not 86, 87). Here's what I see...

Year Your contributions Your pensionable earnings
1986 $419.40 $25,800.00	M
1987 $444.60 $25,900.00	M
1988 $478.00 $26,500.00	M
1989 $480.41 $25,577.00	
1990 $558.23 $28,174.00

In 1979 I was 18, working summers doing construction, worked in a steel mill etc. I did field work through uni in the summer. 
In 1986, I was 25 working with a gas utility at that time, until 1988. 
In 1988 I left and started working contract with a mining company til the bottom fell out of the company in 1990. After that - I did my MSc etc etc..


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## Dogger1953

Eclectic12 said:


> Maybe I am missing something ... where one hasn't hit YMPE with one job and no other sources of income, then the 1987 earnings should be $25,900 - $500 = $25,400 or so. Similarly, 1988 would be $26,500 - $500 = $26,000 or so.
> 
> http://drpensions.ca/cpp-rate-table.html
> 
> I have no idea if the age is correct.
> 
> Cheers


You have correctly determined what his earnings would have been if he had been $500 below the YMPE for those two years. The question though, is how much less would his calculated CPP be with those lower earnings than if those earnings had been equal to the YMPE. That's what my previous answer was.


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## Dogger1953

dubmac said:


> Sorry..I made an error, I was short the YMPE in 1988 and 1989 (not 86, 87). Here's what I see...
> 
> Year Your contributions Your pensionable earnings
> 1986 $419.40 $25,800.00	M
> 1987 $444.60  $25,900.00	M
> 1988 $478.00 $26,500.00	M
> 1989 $480.41 $25,577.00
> 1990 $558.23 $28,174.00
> 
> In 1979 I was 18, working summers doing construction, worked in a steel mill etc. I did field work through uni in the summer.
> In 1986, I was 25 working with a gas utility at that time, until 1988.
> In 1988 I left and started working contract with a mining company til the bottom fell out of the company in 1990. After that - I did my MSc etc etc..


With these revised differences between the YMPE and your actual earnings (and again assuming that these two years are two of your best 39 years):
- your 1989 earnings will reduce your CPP by $2.27 from the maximum, and
- your 1990 earnings will reduce your CPP by $0.74 from the maximum


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## dubmac

Many thanks Dogger...


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## Eclectic12

Dogger1953 said:


> You have correctly determined what his earnings would have been if he had been $500 below the YMPE for those two years.
> 
> The question though, is how much less would his calculated CPP be with those lower earnings than if those earnings had been equal to the YMPE. That's what my previous answer was.


The original question ... sure. And I trust your calculation/answer.

Maybe it's because of the split between question and answer or maybe I wasn't clear. Post #570 was what I was confused by and trying to answer, where it asked what the income was. Income seemed easy to figure out, with the numbers provided - though I have no idea if these years are close to age 18 or not.


Cheers


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## Prairie Guy

I retired a couple months before turning 54 (I am 56 now). I recently looked up my projected CPP amount which is a little over $1000 at age 65. Will this amount drop over the next 9 years if there are no further contributions, or is that projected amount based on my total contributions to date?


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## Dogger1953

Prairie Guy said:


> I retired a couple months before turning 54 (I am 56 now). I recently looked up my projected CPP amount which is a little over $1000 at age 65. Will this amount drop over the next 9 years if there are no further contributions, or is that projected amount based on my total contributions to date?


Hi PG - The SOC estimates are based on your current total earnings (after the general 17% dropout) averaged over the length of your current contributory period (after the general 17% dropout). If you add 9 more years of zero earnings, you are increasing the length of your contributory years without increasing your total earnings, so "Yes" your actual CPP will be less than the current projection (ignoring any increase in the YMPE in those 9 years).

To better understand what's happening, read this article: https://retirehappy.ca/understanding-cpp-statement-contributions-soc/


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## Prairie Guy

Thanks Dogger. 

I thought it was too good to be true that I could get that much even though my contributions between 54 and 65 (or 60 if I take it early) will be non-existent.


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## Dogger1953

Prairie Guy said:


> Thanks Dogger.
> 
> I thought it was too good to be true that I could get that much even though my contributions between 54 and 65 (or 60 if I take it early) will be non-existent.


Hi PG - If you want to try doing your own calculation, read this article: https://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/


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## sherwooddavid

Hello Dogger, My wife and I are trying to decide if she should start taking her CPP. I will be 65 this year and started taking my CPP at 60(this year its about $745). 
My wife will be 62 in September this year and has not applied yet for the CPP.(she would receive about $850).
I had major heart surgery when I was 49 and my concern is that if I passed away in the next few years the most she would receive is the $1135 max amount.Basically she could be leaving about $40K on the table if she doesn't take it soon and I pass away.
My wife has a part time job to keep her busy and our financial situation is pretty good and we probably don't really need her CPP to survive. But I'm thinking she should start taking it and put it in a safe investment in her TFSA. When she turns 65 she'd have a few hundred dollars less from CPP but she'd have a nice little nest egg. Right now all her earnings from her part time job goes into her TFSA.
Anyway I guess I'm wondering what your opinion is on which way we should go ? We've been waffling with this for almost a couple years now and I think its time to make a decision.
Thank you


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## Retiredguy

sherwooddavid said:


> Hello Dogger, My wife and I are trying to decide if she should start taking her CPP. I will be 65 this year and started taking my CPP at 60(this year its about $745).
> My wife will be 62 in September this year and has not applied yet for the CPP.(she would receive about $850).
> I had major heart surgery when I was 49 and my concern is that if I passed away in the next few years the most she would receive is the $1135 max amount.Basically she could be leaving about $40K on the table if she doesn't take it soon and I pass away.
> My wife has a part time job to keep her busy and our financial situation is pretty good and we probably don't really need her CPP to survive. But I'm thinking she should start taking it and put it in a safe investment in her TFSA. When she turns 65 she'd have a few hundred dollars less from CPP but she'd have a nice little nest egg. Right now all her earnings from her part time job goes into her TFSA.
> Anyway I guess I'm wondering what your opinion is on which way we should go ? We've been waffling with this for almost a couple years now and I think its time to make a decision.
> Thank you


I know you've addressed this to Doug but here's my 2 bits. If your not pinched for money she should delay hers to age 70 and get a much larger amount. (Age 65 amount plus 42%). In the meantime if you pass she will get the full survivors benefit amount from you to age 70. If she takes her own CPP now the amount she would get from your passing would be much less. At age 70 she will get her own much larger CPP and in addition still some of the survivor benefit. I'm close to your age and I think yours is a prime example why she should not take her CPP but rather delay it to 70. Also depending on your financial situation she should consider delaying her OAS to 70 as well, but you should be drawing it at 65.


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## Dogger1953

sherwooddavid said:


> Hello Dogger, My wife and I are trying to decide if she should start taking her CPP. I will be 65 this year and started taking my CPP at 60(this year its about $745).
> My wife will be 62 in September this year and has not applied yet for the CPP.(she would receive about $850).
> I had major heart surgery when I was 49 and my concern is that if I passed away in the next few years the most she would receive is the $1135 max amount.Basically she could be leaving about $40K on the table if she doesn't take it soon and I pass away.
> My wife has a part time job to keep her busy and our financial situation is pretty good and we probably don't really need her CPP to survive. But I'm thinking she should start taking it and put it in a safe investment in her TFSA. When she turns 65 she'd have a few hundred dollars less from CPP but she'd have a nice little nest egg. Right now all her earnings from her part time job goes into her TFSA.
> Anyway I guess I'm wondering what your opinion is on which way we should go ? We've been waffling with this for almost a couple years now and I think its time to make a decision.
> Thank you


This is one of the most common misunderstandings of the combined CPP retirement/survivor's pension. If your wife takes her CPP early, she will NOT be creating extra room to receive a portion of your survivor's pension (even though that's probably what you financial advisor and even Service Canada staff will tell you. It is WRONG!!

Read this article: https://retirehappy.ca/cpp-survivor-benefits/


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## martik777

Has there ever been any federal discussion of the significant loss of income (as well as 1/2 the personal tax exemption) for those reliant solely on CPP/OAS/GIS when one spouse dies.

This recently happened to a friend and when his wife passed, the total income dropped by almost 1/2, approx 1,000/month which makes it questionable if he can maintain his household expenses. If he had to rent here in the lower mainland, he would be on the street.


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## Dogger1953

martik777 said:


> Has there ever been any federal discussion of the significant loss of income (as well as 1/2 the personal tax exemption) for those reliant solely on CPP/OAS/GIS when one spouse dies.
> 
> This recently happened to a friend and when his wife passed, the total income dropped by almost 1/2, approx 1,000/month which makes it questionable if he can maintain his household expenses. If he had to rent here in the lower mainland, he would be on the street.


I'm sure that there's been lots of discussion on this issue. Make sure that your friend has applied for the CPP survivor's pension (if his wife contributed for enough years) and make sure that he has been changed over to single status for GIS purposes. His income from those 3 sources should never be less than approx. $1,500 per month, assuming that he has lived in Canada for at least 10 years.


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## Retiredguy

Happy to report my first CPP payment appeared in my bank account yesterday. I applied online last March asking it to start January 2019 (65 + 7 months). It was approved in 2 days which I could see online. My spouses CPP has been in pay for a few years now and after mine was approved I filed papers to share our pensions for tax purposes. All amounts are correct. Good job Service Canada. Thank you!


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## martik777

Congrats on your first CPP deposit! Gotta love that "free" government money :love_heart:


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## Dilbert

I just received my first payment too. I wouldn’t exactly call it “free” after paying into the program for some 44 years!:distrust:


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## naysmitj

Good morning Doug, can you please provide some info regarding CPP income splitting/sharing between spouses?
I am 68 still working collecting CPP at full amount plus 2 year PRB as of this year. 
My wife turned 65 June 2018 and stopped working. She collects OAS but we are delaying applying for CPP.
Once she applies she will get about $600.00 monthly.
What options do we have and does she have to be collecting CPP as well for any splitting/sharing benefit?
Cheers


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## Dogger1953

naysmitj said:


> Good morning Doug, can you please provide some info regarding CPP income splitting/sharing between spouses?
> I am 68 still working collecting CPP at full amount plus 2 year PRB as of this year.
> My wife turned 65 June 2018 and stopped working. She collects OAS but we are delaying applying for CPP.
> Once she applies she will get about $600.00 monthly.
> What options do we have and does she have to be collecting CPP as well for any splitting/sharing benefit?
> Cheers


Hi -Unfortunately, you both have to be receiving your CPP (unless one of you never contributed) in order to do Pension Sharing under the CPP.


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## naysmitj

Thanks very much for the response.
Once she starts collecting, do we split the total of hers and mine together?
Does PRB get excluded?

Thanks.


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## Dogger1953

naysmitj said:


> Thanks very much for the response.
> Once she starts collecting, do we split the total of hers and mine together?
> Does PRB get excluded?
> 
> Thanks.


I'm pretty sure that PRBs are indeed excluded from the pension sharing, but I'm not 100% sure. As for each of your regular pensions, it's a 50/50 split but only on a portion of each of your pensions depending on how many years you have lived together as compared to how many years there are in your "joint contributory period". For example, if you lived together for 30 years out of a joint contributory period of 40 years, you would each receive 50% of 75% (37.5%) of the other person's monthly CPP retirement pension and you would each keep the remaining 62.5% of your own retirement pension.


----------



## Retiredguy

martik777 said:


> Congrats on your first CPP deposit! Gotta love that "free" government money :love_heart:


Not free and its not government money. CPP is a contribution based plan. No gov't money in it. Employer and Employee contributions. If you don't contribute you don't receive.


----------



## naysmitj

Thanks very much, fortunately I was lucky enough to meet my life partner young and we have been together for 45 years so I guess we get to split the full CPP.
Have a great evening.
Thanks


----------



## BC Eddie

Retiredguy said:


> Happy to report my first CPP payment appeared in my bank account yesterday. I applied online last March asking it to start January 2019 (65 + 7 months). It was approved in 2 days which I could see online. My spouses CPP has been in pay for a few years now and after mine was approved I filed papers to share our pensions for tax purposes. All amounts are correct. Good job Service Canada. Thank you!


Where did you look to see it online?


----------



## martik777

BC Eddie said:


> Where did you look to see it online?


It is on the service canada site, you will need to register first


----------



## Retiredguy

BC Eddie said:


> Where did you look to see it online?


You can register here and receive your password in about 10 days in the mail. Once you have that you can log in with either that password or if you have one of the many online bank accounts you can use that. Account will also give you access to your income tax information.

https://www.canada.ca/en/employment-social-development/services/my-account/before-register.html


----------



## BC Eddie

Retiredguy said:


> You can register here and receive your password in about 10 days in the mail. Once you have that you can log in with either that password or if you have one of the many online bank accounts you can use that. Account will also give you access to your income tax information.
> 
> https://www.canada.ca/en/employment-social-development/services/my-account/before-register.html


Thanks Martik and Retiredguy for responding.

Both my wife and I set up the Service Canada access some years ago and do use it from time to time but was not aware that you could track the status of the CPP/OAS application.

However, something does not look right. My wife went into the Service Canada office the first week of last September (about 19 weeks ago) and applied for both CPP and OAS to start in August 2019. She was told at that time that there was a big backlog but that she should hear by January 2019.

We just went to the Service Canada site and used the "application Status" tab but it says "unable to proceed". It says "no recent application on file at this time" and that it could take 6 to 12 weeks to show up. That time has obviously passed. Will need to give them a call I guess.


----------



## Retiredguy

BC Eddie said:


> Thanks Martik and Retiredguy for responding.
> 
> Both my wife and I set up the Service Canada access some years ago and do use it from time to time but was not aware that you could track the status of the CPP/OAS application.
> 
> However, something does not look right. My wife went into the Service Canada office the first week of last September (about 19 weeks ago) and applied for both CPP and OAS to start in August 2019. She was told at that time that there was a big backlog but that she should hear by January 2019.
> 
> We just went to the Service Canada site and used the "application Status" tab but it says "unable to proceed". It says "no recent application on file at this time" and that it could take 6 to 12 weeks to show up. That time has obviously passed. Will need to give them a call I guess.



Try looking at the tab that says "estimated CPP benefit" something like if you were to start next month you would receive XXXX. Prior to applying I had been looking at that monthly and of course it increased a bit each month as I approached 65. I applied in March and asked for a January 2019 start. It was quickly approved for Jan 2019, which was still 8 months away. The estimated $ amount jumped to what I would could expect in January. In my case it was correctly stated based on age 65 plus 7 months. I only applied for CPP not OAS. Maybe it was because I applied on line that it came together quickly? My application to pension share was submitted in paper form at a service Canada centre last June but I heard nothing until I could see the changes in December in my online account. Sorry but I don't have any other suggestions for you.


----------



## msclarke

*Estimated monthly CPP benefit*

Dogger, thanks for all you do on this and other forums. I am wondering if you can help with my situation.

I am 59 turning 60 this September. My wife is 16 years older and is receiving CPP and OAS benefits. Lost my full time job in the fall of 2017 and may not go back (even if I wanted to). I am considering self employment for a few years, possibly up to 65, grossing $20K to $30K a year. I am not sure that will make any difference with respect to CPP benefits. I am open to delaying taking CPP to 65, but can't imagine beyond that at the moment. I feel some urgency in living in the moment.

I received a statement of contributions on September 27, 2018 that provided that following estimates: at 60 $701.60, if 65 today $1,096.25, at 70 $1,556.68. I then followed the methodoloy you've provided and calculated the following: at 60 $729.62, at 65 $1,140.04, at 70 = 1,618.85. I have 32 years of maximum earnings between 1977 and 2017. The UPE/YMPE for the other 8 years are as follows: 0.04, 0.00, 0.00, 0.15, 0.35, 0.11, 0.28, 0.51.

I am concerned about the impact on my CPP benefits between 61 and 70 (or at least 65) if I never work (or contribute to CPP) again.

Thanks for your help.

Mark


----------



## Dogger1953

msclarke said:


> Dogger, thanks for all you do on this and other forums. I am wondering if you can help with my situation.
> 
> I am 59 turning 60 this September. My wife is 16 years older and is receiving CPP and OAS benefits. Lost my full time job in the fall of 2017 and may not go back (even if I wanted to). I am considering self employment for a few years, possibly up to 65, grossing $20K to $30K a year. I am not sure that will make any difference with respect to CPP benefits. I am open to delaying taking CPP to 65, but can't imagine beyond that at the moment. I feel some urgency in living in the moment.
> 
> I received a statement of contributions on September 27, 2018 that provided that following estimates: at 60 $701.60, if 65 today $1,096.25, at 70 $1,556.68. I then followed the methodoloy you've provided and calculated the following: at 60 $729.62, at 65 $1,140.04, at 70 = 1,618.85. I have 32 years of maximum earnings between 1977 and 2017. The UPE/YMPE for the other 8 years are as follows: 0.04, 0.00, 0.00, 0.15, 0.35, 0.11, 0.28, 0.51.
> 
> I am concerned about the impact on my CPP benefits between 61 and 70 (or at least 65) if I never work (or contribute to CPP) again.
> 
> Thanks for your help.
> 
> Mark


Hi Mark - I'm not sure what methodology you followed to get your numbers, but I'm getting somewhat different results. Explain what you did and I'll tell you where you went wrong. You never have to worry about the impact of zero earnings beyond age 65, because you can drop out all of those years under the over-age-65 dropout provision.


----------



## msclarke

*CPP Benefit*

Hi - Thanks for your response. I tried to follow the methodology titled "how to calculate your cpp retirement pension" found at retirehappy. I may have seen it elsewhere as well but that's the one I recall. Hopefully this will make sense but let me know if I've omitted something you need.

Using Excel:

a. Imagine the following column headers from left to right: 1. Year; 2. Your Contributions; 3. Your Pensionable Earning (UPE); 4. Notes; 5. Maximum Pensionable Earnings (YMPE); 6. UPE/YMPE; 7. Dropout; 8. Adjusted Pensionable Earnings (APE).

b. The first 4 came from the Service Canada statement.

c. YMPE is based on a lookup of a CPP rate table from 1966 to 2019. I found 2020 to 2024 on the internet ($60,100, $61,900, $63,700, $65,700, $67,700, $69,700).

d. NCM before and after dropout equalled 564 and 468 respectively, as a result of a 17% dropout rate. I then dropped 8 years from 1977 to 2024 (1982,
2018-2024).

e. APE for each year from 1977 to 2017 equals UPE/YMPE times the average YMPE for the five-year period ending in the year that CPP will start (from the same rate table - $63,820 [year 2024 when I turn 65]).

I then calculated a TAPE (after dropout) of $2,134,149.78, and an AMPE of $4,560.15. "At 60" was reduced by 0.6% per month. "At 70" was increased by 0.7%.

Thanks


----------



## Dogger1953

Hi Mark - Now I see why we have different results. First, I always work in current-year dollars rather than trying to anticipate future YMPE values. If you do want to work in future dollar values though, you would have to calculate each of the 3 different ages totally separate, using the 5-year average ending with 2019 for your age 60 amount, the 5-year average ending with 2024 for your age 65 amount and the 5-year average ending with 2029 for your age 70 amount.
Regardless whether you're working in current or future dollars, you have to do the age-60 calculation separately anyway, because the NCM at age 60 is only 504 and the 17% dropout is 86 months. You can use the same calculation for age 65 and 70 (unless you're working in future dollar values), because of the over-age-65 dropout.
Does this all make sense?


----------



## msclarke

Hi - I think so and don't have the average ending with 2029. Are you able to provide me with your own estimates that I can compare to tomorrow or would you rather see what I come up with on my own? I also don't mind contacting you separately and paying a fee.

Thanks


----------



## Dogger1953

msclarke said:


> Hi - I think so and don't have the average ending with 2029. Are you able to provide me with your own estimates that I can compare to tomorrow or would you rather see what I come up with on my own? I also don't mind contacting you separately and paying a fee.
> 
> Thanks


Hi Mark - Sure, I just did estimates in current-year dollars using YMPE equivalents and my numbers were:
- $716.46 at age 60;
- $989.98 at age 65; and
- $1,405.77 at age 70

You can contact me at [email protected] if you want me to do actual calculations for you


----------



## ret.in.18

*partial OAS*

Hello, I qualify only for a partial OAS. I lived in Canada for 12 years and 11 months before my 65 year birthday. Does it make sense to wait with my OAS application for 1 month after my 65 year birthday in order to have 13 years of residence in Canada? Or years of residence are always counted only till a 65 year birthday? 
Thank you.


----------



## Dogger1953

ret.in.18 said:


> Hello, I qualify only for a partial OAS. I lived in Canada for 12 years and 11 months before my 65 year birthday. Does it make sense to wait with my OAS application for 1 month after my 65 year birthday in order to have 13 years of residence in Canada? Or years of residence are always counted only till a 65 year birthday?
> Thank you.


First, if you wait the one extra month you will be eligible for 13/40ths OAS instead of 12/40ths, so it could make a lot of sense to wait. In my mind, the answer to your question depends mostly on whether or not you'll also be eligible for GIS. If you are eligible for GIS, the total amount of OAS/GIS that you will receive will be the same regardless whether your OAS is 12/40ths or 13/40ths, because the GIS will be topped up to make up the difference. Read this article to understand this issue more fully: https://retirehappy.ca/receiving-partial-oas-pension-affects-gis-amounts/

If you're not eligible for GIS, I would definitely recommend that you wait for one month in order to receive 13/40ths OAS.


----------



## C&J

*Retirement Simulation*

Hi Dogger,
I read years ago that if you call CRA, they can provide you a "retirement simulation", so I did so in 2016 when I was 51.
I requested 3 of them.
1. Retire at 55 and collect CCP at 60
2. Retire at 55 and collect CPP at 65
3. Retire at 55 and collect CPP at 70

All assuming same salary until age 55(all > YMPE), then zero thereafter.

They provided 3 dollar values. My wife also did it and had them include child rearing provision.
Can I trust their calculations?

Carl


----------



## Dogger1953

C&J said:


> Hi Dogger,
> I read years ago that if you call CRA, they can provide you a "retirement simulation", so I did so in 2016 when I was 51.
> I requested 3 of them.
> 1. Retire at 55 and collect CCP at 60
> 2. Retire at 55 and collect CPP at 65
> 3. Retire at 55 and collect CPP at 70
> 
> All assuming same salary until age 55(all > YMPE), then zero thereafter.
> 
> They provided 3 dollar values. My wife also did it and had them include child rearing provision.
> Can I trust their calculations?
> 
> Carl


I would expect them to be accurate, considering that they will be expressed in 2016 dollars and they won't include the "enhanced CPP" changes (which will be quite minimal for you because you won't have many years of earnings after 2018).


----------



## Johnsnow.got2000

Hello Dogger,

Thank you for your invaluable insight in advance. I apologize if this has been asked before but I have not be able to read through 61 pages of the thread. Your answer will help me plan for the direction on my future as I am contemplating the route I may take.

I am currently a non resident and have been away from Canada for more than a decade. Prior to leaving Canada, I have worked for over a decade in a fairly decent paying jobs and have made and max CPP contribution for at least 7-8 years.

However, by my count, I left Canada at a date which is 19 years and 11 months since my 18 birthday. I understand you need 20 years to be counted for the CPP (?)

Currently I am debating 1) stay overseas or 2) come back to Canada immediately or 3) come back in a few years.

My questions:

1) As is, currently below 20 years, if I do come back to Canada, and not going to further employment, am I not eligible to any of CPP I have contributed when it comes to 60 or 65?
2) If I do come back and stay as a resident, and work a little bit more, say a couple of months, to bump it over the the 20 years period, but since they are not continuous, does it count?
3) What is the best way to maximize the amount I can get given my current situation if I decide to come back?

I am 48 years now and still can work but is debating to take some time to take care of myself and the family.

Thank you in advance for your insight!

-JS


----------



## Dogger1953

Hi John - I think you're confusing the OAS rules with CPP. There's no minimum number of years that you needed to contribute to CPP in order to receive CPP outside Canada, so there's no need for you ever to return to Canada in order for you to receive your CPP. For OAS however, you need to have resided in Canada for at least 20 years after age 18 in order to receive OAS if you're living outside Canada. If you have less than the required 20 years, you may still be able to qualify for OAS under one of Canada's international social security agreements: https://retirehappy.ca/social-security-agreements-cpp-oas/. If not, the only other way to qualify for OAS is to return to reside in Canada (which is defined as making your home in Canada and ordinarily living in any part of Canada).


----------



## mrq2

*GIS/Allowance*

Next March (2020) when I retire, my wife will be eligible for the "Allowance". She's thinking at the end of this year of transferring $10000 from her RRSP to a RRIF, then withdrawing the full amount. I called Service Canada and was told that when I retire to fill out form ISP3041 (recalculation of income). The agent said because she will deplete the whole RRIF it would not affect her Allowance amount because there'll be no more pension income coming from the RRIF (after filling out form ISP3041). Do you have any insight into this?


----------



## Dogger1953

mrq2 said:


> Next March (2020) when I retire, my wife will be eligible for the "Allowance". She's thinking at the end of this year of transferring $10000 from her RRSP to a RRIF, then withdrawing the full amount. I called Service Canada and was told that when I retire to fill out form ISP3041 (recalculation of income). The agent said because she will deplete the whole RRIF it would not affect her Allowance amount because there'll be no more pension income coming from the RRIF (after filling out form ISP3041). Do you have any insight into this?


My understanding is that if an RRSP/RRIF is fully depleted after a series of regularly scheduled withdrawals, this would qualify as a reduction/cessation of pension income and she could complete her own ISP3041 form so that her Allowance (and your GIS) would be based on her estimated current-year income instead of being based on her previous year's income which included the RRSP/RRIF. This is not intended to cover lump sum withdrawals though, and I suspect it wouldn't even cover monthly withdrawals done all in one calendar year. It certainly wouldn't apply if she has other money in her RRSP and only created that one $10,000 RRIF to deplete it. If that did work, what would stop someone from doing that same thing every second year and yet still receive the higher GIS as though they had no pension income?

If I were you, I'd ask them to put it in writing, and even then I don't think it will work.


----------



## Johnsnow.got2000

Dogger1953 said:


> Hi John - I think you're confusing the OAS rules with CPP. There's no minimum number of years that you needed to contribute to CPP in order to receive CPP outside Canada, so there's no need for you ever to return to Canada in order for you to receive your CPP. For OAS however, you need to have resided in Canada for at least 20 years after age 18 in order to receive OAS if you're living outside Canada. If you have less than the required 20 years, you may still be able to qualify for OAS under one of Canada's international social security agreements If not, the only other way to qualify for OAS is to return to reside in Canada (which is defined as making your home in Canada and ordinarily living in any part of Canada).



Hi Dogger, thank you so much for the clarification... I must have completely asleep when I type that up! Thank you again and I will research about the non-resident piece. Any idea for non resident on the CPP claims that I should be aware of or take note? Thank you again for your invaluable insight!


----------



## Taxsaver

I am 55 and look forward to retiring in 10 years! I have two questions.
1. I expect to still be single for the rest of my life, which is fine.  I checked the government's website below. I am not clear one thing. OAS is $575 a month for singles. Now, Guaranteed Income Supplement would be roughly $900 a month. I guess the keyword is "supplement" here. I understand that I would get $900, not $900 plus $575. That would be too wonderful. Thanks.

* https://www.canada.ca/en/services/b...ge-security/guaranteed-income-supplement.html*


----------



## Dogger1953

Taxsaver said:


> I am 55 and look forward to retiring in 10 years! I have two questions.
> 1. I expect to still be single for the rest of my life, which is fine.  I checked the government's website below. I am not clear one thing. OAS is $575 a month for singles. Now, Guaranteed Income Supplement would be roughly $900 a month. I guess the keyword is "supplement" here. I understand that I would get $900, not $900 plus $575. That would be too wonderful. Thanks.
> 
> * https://www.canada.ca/en/services/b...ge-security/guaranteed-income-supplement.html*


First the good news is that the OAS is currently $601.45 (assuming that you have resided in Canada for at least 40 years after age 18). The better news is that the $900 GIS is in addition to the OAS of $601.45, so the total maximum OAS/GIS is indeed almost $1,500 per month. The bad news though, is that the maximum GIS of approx. $900 is only payable if you have virtually no other income aside from your OAS/GIS. If you do have other income (such as CPP), the GIS is reduced by approx. 50% of such other income, down to the point where you won't receive any GIS at all if your other income exceeds $18, 240.


----------



## Taxsaver

Dogger1953 said:


> First the good news is that the OAS is currently $601.45 (assuming that you have resided in Canada for at least 40 years after age 18). The better news is that the $900 GIS is in addition to the OAS of $601.45, so the total maximum OAS/GIS is indeed almost $1,500 per month. The bad news though, is that the maximum GIS of approx. $900 is only payable if you have virtually no other income aside from your OAS/GIS. If you do have other income (such as CPP), the GIS is reduced by approx. 50% of such other income, down to the point where you won't receive any GIS at all if your other income exceeds $18, 240.


Thank you so much for the great news!

I have another question for you, if you don't mind. Is there a calculator to approximate the CPP I would receive at 60? My average salary has been $35,000 in the 20 years I worked in my life. I have 10 years left before 65, but lost my job last month, and I think I will work only part-time for the remaining 10 years of my active life. I approximate $17,000 per year until then.


----------



## OptsyEagle

Taxsaver said:


> Thank you so much for the great news!
> 
> I have another question for you, if you don't mind. Is there a calculator to approximate the CPP I would receive at 60? My average salary has been $35,000 in the 20 years I worked in my life. I have 10 years left before 65, but lost my job last month, and I think I will work only part-time for the remaining 10 years of my active life. I approximate $17,000 per year until then.


I think they have one here:

https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html


----------



## OptsyEagle

My mother in law is within a few days of the promised land and I am wondering about the CPP death benefit for her funeral costs.

I read that to get a CPP death benefit you need to contribute to CPP for 1/3 of the eligibility period or 10 years, or something like that. I am not sure what that exactly says, perhaps I should.

I know she never worked much in her life. Was mostly a stay at home mom and then after divorce, welfare.

Anyway, she has no money, no estate and now, not much life. Any idea if she would get the CPP death benefit. I can't see them letting people rot in the streets. I imagine the kids could come up with some money but thought I would ask here first, so I know what we are dealing with.


----------



## Dogger1953

OptsyEagle said:


> My mother in law is within a few days of the promised land and I am wondering about the CPP death benefit for her funeral costs.
> 
> I read that to get a CPP death benefit you need to contribute to CPP for 1/3 of the eligibility period or 10 years, or something like that. I am not sure what that exactly says, perhaps I should.
> 
> I know she never worked much in her life. Was mostly a stay at home mom and then after divorce, welfare.
> 
> Anyway, she has no money, no estate and now, not much life. Any idea if she would get the CPP death benefit. I can't see them letting people rot in the streets. I imagine the kids could come up with some money but thought I would ask here first, so I know what we are dealing with.


Hi OE - In order to be eligible for the lump sum death benefit of $2,500 she must have made contributions for at least the "minimum qualifying period" (MQP). 10 years of contributions always meets the MQP, whether the contributions were made directly through actual employment earnings or indirectly through a credit split after her divorce. If she has fewer than 10 years of contributions, she needs to have earnings/contributions in at least 1/3 of the years during her contributory period (which can vary based on when she was born and how many years she can exclude under the "child rearing dropout" provision.


----------



## Dogger1953

OptsyEagle said:


> I think they have one here:
> 
> https://www.canada.ca/en/services/benefits/publicpensions/cpp/retirement-income-calculator.html


Hi OE - Unless you're seeing something that I'm not, the CRIC is useless as a CPP calculator. At best it's a retirement planning tool.


----------



## Dogger1953

Taxsaver said:


> Thank you so much for the great news!
> 
> I have another question for you, if you don't mind. Is there a calculator to approximate the CPP I would receive at 60? My average salary has been $35,000 in the 20 years I worked in my life. I have 10 years left before 65, but lost my job last month, and I think I will work only part-time for the remaining 10 years of my active life. I approximate $17,000 per year until then.


To approximate your CPP at age 60, total your 35 "best" year of earnings (in terms of % of the YMPE), divide by 35, multiply by the current maximum retirement pension and then multiply by 64%. For example, if you have 20 years of approx $35,000 earnings, that might been worth approx. 12 years of YMPE equivalent years ($35,000/YMPE of $57,400 = 0.6 x 20 years = 12 years). This would then result in a CPP retirement pension of approx. $253.35 ( 12 / 35 x $1,154.58 x 64% = $253.35). If you have 5 more years of $17,000 earnings between now and age 60, that would increase the above result by approx. $31.65 ( 5 x 0.3 / 35 x $1,154.58 x 64% = $31.65).

The "enhanced CPP" changes that start this year will change the above formula slightly, but not to any significant degree.


----------



## OptsyEagle

Hi Dogger:

Another CPP question. I am figuring that CPP must use calendar years to determine CPP contributions, etc., and of course the actual birthdate of a person who is applying for it. Here is my situation/question/concern:

I was born in Oct. 1964 and my wife was born in January 1965. I retired and stopped contributing to CPP in 2016. My wife did the same about the same time. We have no kids. My retired years from 2017 to Oct of 2014 should cover 7 of my drop out years and I will drop out another low one for good measure. Here is my concern. I was planning on waiting until January of 2025, when my wife turns 60, to apply for CPP together, but it occurred to me that the CPP people might take into account 2024 for me, where I contributed nothing to my CPP plan that year. If I applied for my CPP in October I thought they might not do this since I will not have finished the entire year to calculate my CPP contribution and that might save me one more "zero" contribution year in the calculation.

I am hoping what I said above makes sense. Would it make a difference to me to apply for CPP in 2024 (in October when I turn 60) instead of 2025, when 2024 will be a zero contribution year.


----------



## Dogger1953

OptsyEagle said:


> Hi Dogger:
> 
> Another CPP question. I am figuring that CPP must use calendar years to determine CPP contributions, etc., and of course the actual birthdate of a person who is applying for it. Here is my situation/question/concern:
> 
> I was born in Oct. 1964 and my wife was born in January 1965. I retired and stopped contributing to CPP in 2016. My wife did the same about the same time. We have no kids. My retired years from 2017 to Oct of 2014 should cover 7 of my drop out years and I will drop out another low one for good measure. Here is my concern. I was planning on waiting until January of 2025, when my wife turns 60, to apply for CPP together, but it occurred to me that the CPP people might take into account 2024 for me, where I contributed nothing to my CPP plan that year. If I applied for my CPP in October I thought they might not do this since I will not have finished the entire year to calculate my CPP contribution and that might save me one more "zero" contribution year in the calculation.
> 
> I am hoping what I said above makes sense. Would it make a difference to me to apply for CPP in 2024 (in October when I turn 60) instead of 2025, when 2024 will be a zero contribution year.


Hi Eagle - The first fatal flaw in your plan is that if you take your CPP at 60ish, you will not be able to drop out 8 years. The general 17% dropout is exactly 8 years if you take your CPP at age 65, but it is only 86 months if you take your CPP at age 60 (17% of 42 years from age 18 to age 60). The second fatal flaw is thinking that from Jan 2017 to Oct 2024 is only 7 years, because it's 94 months. To answer your main concern though, there won't be much difference in whether you take your CPP in October 2024 (it will actually begin in November) or if you wait until January (your wife's CPP will actually begin in February).


----------



## OptsyEagle

Thanks for that. Makes sense. Still wondering though how they know what my CPP contributions are for a current year when it is October. I believe you counted 10 months up to October of 2024, but even if I would be contributing every month that year to CPP, how would they know how much? For example, self employed people who have no payroll withholding.


----------



## Dogger1953

OptsyEagle said:


> Thanks for that. Makes sense. Still wondering though how they know what my CPP contributions are for a current year when it is October. I believe you counted 10 months up to October of 2024, but even if I would be contributing every month that year to CPP, how would they know how much? For example, self employed people who have no payroll withholding.


They don't know what your earnings are for the current year, so they assume that it's zero. Even for employees they don't capture payroll data until T4s are issued at year-end. They calculate the amount of your CPP on what they consider to be an interim basis, and then they will recalculate the amount and pay any retroactive underpayments (if there was any income in the year that your CPP started) sometime later in the following years. For example, if your CPP starts in November 2024, they will initially calculate your CPP using zero earnings for 2024 until around Oct/Nov 2025, when they will recalculate using your actual 2024 income.


----------



## OptsyEagle

OK, that sounds like it would be more accurate. My last nit picking detail question. 

If they recalculate 2024 in my case and my CPP was applied for in October, would they take my 2024 CPP contributions and multiply that year by 10/12ths to accommodate a partial year or would they call it 12 months of zero contributions. The reason I ask this is it goes back to my original question. If I apply in January of 2025 would they recalculate that as another 12 months of zero contributions for 2025 or would they just calculate it as 1/12th of a zero year?


----------



## Dogger1953

OptsyEagle said:


> OK, that sounds like it would be more accurate. My last nit picking detail question.
> 
> If they recalculate 2024 in my case and my CPP was applied for in October, would they take my 2024 CPP contributions and multiply that year by 10/12ths to accommodate a partial year or would they call it 12 months of zero contributions. The reason I ask this is it goes back to my original question. If I apply in January of 2025 would they recalculate that as another 12 months of zero contributions for 2025 or would they just calculate it as 1/12th of a zero year?


The actual calculation uses months, not years. So 1964 would count as 2 months of zero earnings and 2024 would count as 10 months of zero earnings if you start effective November 2024 or 12 months of zero earnings if you start effective January 2025. If you take your CPP in February 2025 (when your wife's CPP starts), you would count 1 month of zero earnings for 2025.


----------



## OptsyEagle

Thank you for all that. Really appreciate it.


----------



## habsfan59

Good day Dogger,

Just to confirm, 

My wife received her CPP "admissibility letter" and from the calculation it appears that the Child Rearing Provision was not calculated in the estimation from Service Canada. When using your instructions (found in RetireHappy.ca) I came up with approx $45/mth above the Service Canada provided number. 

Question: Does Child Rearing Provision only calculated when in receipt of the CPP monthly payment? 

As this time, my wife intents to take her CCP at 65, having said that, we are curious to understand the difference....!

Thanks,


----------



## Dogger1953

habsfan59 said:


> Good day Dogger,
> 
> Just to confirm,
> 
> My wife received her CPP "admissibility letter" and from the calculation it appears that the Child Rearing Provision was not calculated in the estimation from Service Canada. When using your instructions (found in RetireHappy.ca) I came up with approx $45/mth above the Service Canada provided number.
> 
> Question: Does Child Rearing Provision only calculated when in receipt of the CPP monthly payment?
> 
> As this time, my wife intents to take her CCP at 65, having said that, we are curious to understand the difference....!
> 
> Thanks,


Yes, the child-rearing provision is only calculated when she applies for a CPP benefit, and only then if she completes that part of the application form.

BTW, I'm not sure that I've ever seen this "admissibility letter" that you say she received. If you could scan and send a copy to me at [email protected], I would really appreciate it.


----------



## Money172375

Can you manually contribute to CPP if you’re not working? Would it make sense to do so?


----------



## Dogger1953

Money172375 said:


> Can you manually contribute to CPP if you’re not working? Would it make sense to do so?


It might make sense in some situations, but it's not an option.


----------



## BC Eddie

Apologies in advance as this is an OAS related question - not CPP

Background
Originally I had planned to defer OAS starting until age 70 in June 2021 but after doing the math and factoring in claw back I decided there was no real benefit to waiting beyond Feb 2020 so I sent in my OAS application in March 2019 with an OAS start date of Feb 2020. From time to time I have checked on the Service Canada (SC) site to see the status of my application but it always said the application was not found. I had heard they were swamped and processing took a while so I always decided to wait to do any follow up.

Today
I decided it was finally time to call SC just to make sure they actually did have my application. A very pleasant person told me that, because I had worked in the US for about eight years, SC had to consult with the US on my application. It had been “only” 245 days since they had received my application and because it involved the US they had to wait at least 410 (!!!) days to follow-up with the US for any required information. As a result it is very unlikely that my OAS will start in Feb, 2020 but may be delayed at least until May 2020. 

I was told that I would receive back payments for the delayed months. But I then asked if it did not start until May 2020 would I get the extra 1.8% (0.6% X 3) increase in monthly payment because of the additional three months of deferment and I was told no. 

Does this sound right?


----------



## AltaRed

Yes, if you are going to receive the back payments to the requested start date.


----------



## Dogger1953

BC Eddie said:


> Apologies in advance as this is an OAS related question - not CPP
> 
> Background
> Originally I had planned to defer OAS starting until age 70 in June 2021 but after doing the math and factoring in claw back I decided there was no real benefit to waiting beyond Feb 2020 so I sent in my OAS application in March 2019 with an OAS start date of Feb 2020. From time to time I have checked on the Service Canada (SC) site to see the status of my application but it always said the application was not found. I had heard they were swamped and processing took a while so I always decided to wait to do any follow up.
> 
> Today
> I decided it was finally time to call SC just to make sure they actually did have my application. A very pleasant person told me that, because I had worked in the US for about eight years, SC had to consult with the US on my application. It had been “only” 245 days since they had received my application and because it involved the US they had to wait at least 410 (!!!) days to follow-up with the US for any required information. As a result it is very unlikely that my OAS will start in Feb, 2020 but may be delayed at least until May 2020.
> 
> I was told that I would receive back payments for the delayed months. But I then asked if it did not start until May 2020 would I get the extra 1.8% (0.6% X 3) increase in monthly payment because of the additional three months of deferment and I was told no.
> 
> Does this sound right?


First, the answer to your direct question is "Yes, it sounds right", because you can't get both the 0.6% per month plus retro payments.

But the real question is why do they need to check with the US social security? How many years of residence do you have in Canada, and are you living in Canada now? What years did you work/live in the USA?


----------



## BC Eddie

AltaRed said:


> Yes, if you are going to receive the back payments to the requested start date.


Yeah, once I took a moment to think about it (should have done this before typing) I guess it does make sense.

However, given the delay is not my fault but probably due to their under-staffing, I think there might be some situations where someone might prefer to defer the start date and take the higher deferred payment amount, instead of getting it paid in arrears. 

I had read on this site that processing times were long and that is why I submitted my application at the earliest date possible(eleven months prior to start) but now I am finding even that was not early enough to get the start date I wanted.


----------



## BC Eddie

Dogger1953 said:


> First, the answer to your direct question is "Yes, it sounds right", because you can't get both the 0.6% per month plus retro payments.
> 
> But the real question is why do they need to check with the US social security? How many years of residence do you have in Canada, and are you living in Canada now? What years did you work/live in the USA?



Well I was born in Canada in 1951 and lived and worked here until moving to US in 2000 returning to Canada in 2006 and have continued to reside in Canada since then.


----------



## Dogger1953

BC Eddie said:


> Well I was born in Canada in 1951 and lived and worked here until moving to US in 2000 returning to Canada in 2006 and have continued to reside in Canada since then.


Then I'm very confused why they should be waiting for anything from the USA, because you clearly meet the requirements for a full OAS pension regardless of your time spent in the USA. I would suggest that you call back again and ask them to explain why they're trying to confirm anything from the USA.


----------



## james4beach

Hi Dogger,

I'm a Canadian in my 30s, not anywhere close to full CPP eligibility. I've lived and worked nearly my whole life in Canada except for 5 years in the USA when I worked for a US company. During those years, I was required to pay into US Social Security to the tune of 37k USD or about $50,000 in SS taxes!

My question is: can I get anything out of this in the future? Can my SS contributions/credits/time equivalence be transferred up to CPP somehow? Should I be taking any action currently?

As I understand it, 10 years of US work is required before anyone (foreigner or not) can collect American SS. It doesn't appear that I can collect SS in the future unless perhaps I work more years down south. I'm just hoping there might be some $ equivalence in the CPP system, since I did pay into SS.


----------



## Dogger1953

james4beach said:


> Hi Dogger,
> 
> I'm a Canadian in my 30s, not anywhere close to full CPP eligibility. I've lived and worked nearly my whole life in Canada except for 5 years in the USA when I worked for a US company. During those years, I was required to pay into US Social Security to the tune of 37k USD or about $50,000 in SS taxes!
> 
> My question is: can I get anything out of this in the future? Can my SS contributions/credits/time equivalence be transferred up to CPP somehow? Should I be taking any action currently?
> 
> As I understand it, 10 years of US work is required before anyone (foreigner or not) can collect American SS. It doesn't appear that I can collect SS in the future unless perhaps I work more years down south. I'm just hoping there might be some $ equivalence in the CPP system, since I did pay into SS.


Hi James - You should be able to qualify for US SS through the Canada/USA agreement. See this link: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-international/united-states.html


----------



## Topo

Hi Dogger,

If someone has worked in both the US and Canada, should they contact SS and CPP separately to compare the benefits and choose the more beneficial one, or is this done automatically if one of those entities is contacted?

Thank you for your expertise.


----------



## Dogger1953

Topo said:


> Hi Dogger,
> 
> If someone has worked in both the US and Canada, should they contact SS and CPP separately to compare the benefits and choose the more beneficial one, or is this done automatically if one of those entities is contacted?
> 
> Thank you for your expertise.


Hi Topo - It's not either/or; you would be eligible for benefits from both countries and you apply for each of them separately.


----------



## Longtimeago

For those like james4beach who spend time working in another country, keep in mind that each year you do so will be subtracted from your OAS eligibility when you do reach retirement age. 

OAS is only based on residency unlike CPP of course which is based on contributions. For full OAS payment you must have been resident in Canada for 40 years after your 18th birthday. That means there is only 7 years of wiggle room between 18 and 65. James4beach has already used up 5 and so any more than 2 more will start to deduct from potential OAS payment. Each additional year outside of Canada during the eligibility period will result in 1/40th of the potential payment being lost.

It's just something to be aware of and keep in mind when working outside of Canada.


----------



## Longtimeago

Dogger1953 said:


> Then I'm very confused why they should be waiting for anything from the USA, because you clearly meet the requirements for a full OAS pension regardless of your time spent in the USA. I would suggest that you call back again and ask them to explain why they're trying to confirm anything from the USA.


Might be because they are confused by BC Eddie's info as I am. In one comment he refers to working in the USA for 'about 8 years'. It isn't clear if that is him saying that or the person he talked to at Service Canada saying that. In another comment he refers to '2000 returning to Canada in 2006'. Those two statements are contradictory obviously. If it was more than 7 years, then he is NOT eligible for full OAS payment since he will not have 40 years residency between ages 18-65, only 39.

If they think he lived in the USA for more than 7 years, they may well be questioning just how long he did live there for and asking the USA for confirmation of what years he was resident there. 

I had a similar situation where I was living in another country for a while and when I applied for OAS, I dutifully reported my absence. I then got a letter asking me to 'prove' my absence somehow. They suggested things like 'an airline boarding pass'. The funny thing was that they were actually asking me to prove I had been OUT of Canada for the relevant period. I replied saying I did not keep boarding passes for 15-20 years in the past and had no way to prove my absence. I also wrote that if they were not prepared to take my word for my absence then I supposed they would need to assume the only alternative, that I had NOT been absent at all. I never heard any more from them until I got a letter telling me I would be receiving full OAS payments beginning on X date.

The only difference is that BC Eddie was in a country that shares info with Canada and I was in a country that does not, so they had to ask me to prove my time outside Canada instead of asking a government department in the country I was living in during that time.


----------



## james4beach

Dogger1953 said:


> Hi James - You should be able to qualify for US SS through the Canada/USA agreement. See this link: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-international/united-states.html


Thanks Dogger

Longtimeago maybe you can clarify what you mean. According to that Govt of Canada link:



> If you do not qualify for an Old Age Security pension based on your years of residence in Canada, Canada will consider your periods of contributions to the pension program of the United States after the age of 18 and after January 1, 1952 as periods of residence in Canada.


So isn't this saying that for OAS purposes, Canada will credit me for my 5 years in the US?

Or maybe this is just about qualifying (getting nothing vs getting something). Perhaps this can help me qualify, but the amounts received (OAS) are still scaled down.


----------



## Dogger1953

james4beach said:


> Thanks Dogger
> 
> Longtimeago maybe you can clarify what you mean. According to that Govt of Canada link:
> 
> 
> 
> So isn't this saying that for OAS purposes, Canada will credit me for my 5 years in the US?
> 
> Or maybe this is just about qualifying (getting nothing vs getting something). Perhaps this can help me qualify, but the amounts received (OAS) are still scaled down.


Hi James - That is correct, the agreement can only help you qualify (something versus nothing) and it doesn't affect the amount of your benefit from either country.


----------



## spirit

Hello and thank you for taking the time to answer questions here on this forum

I am retired now 3 years and my husband going on 30.....lucky man!!!

I live in Alberta and our new premier is making noise about dropping out of CPP and setting up Alberta with it's own plan under the juridiction of AIM. I am very much AGAINST his idea. Do you think it is feasible or is it just politicing? Also...what suggestions do you have for me to counter his plan.

Not looking for you to spend a lot of time on this but just your perspective. Thanks again.


----------



## AltaRed

QPP would be a similar analogy and as I understand it, the plans for the most part mirror each other. Possibly some minor differences in side benefits vs the primary pension. 

One thing that is different is QPP has a higher contributory rate. Don't know if that is investment performance related or not. Doubt AIMCO can outperform CPPIB and further there is risk of investment decision bias just like there is in Quebec.


----------



## ian

I am on CPP and I am an Albertan. I certainly do not support it. CPP Advisory board gives us best in class investment returns and security. The big bonus is that it is completely insulated from Government interference. I get the shivers just thinking about what half baked invvestment ideas our Provincial politicians of all stripes could come up with in order to win an election/elicit voter support.

I keep hearing this nonsense that the 'monies belong to Alberta'. They do not. They belong to individual Albertans. We all have our own CPP acounts. We can ask for a statement at any time. The money is held in trust for each of us who have contributed and had the matching employer contributions. I certainly do not view the notional commuted value of my CPP as belonging to Alberta. It belongs to me....just like my private pension. The very last thing I want is my CPP plan turning into something that resembles the US Social Security system.


----------



## Dogger1953

spirit said:


> Hello and thank you for taking the time to answer questions here on this forum
> 
> I am retired now 3 years and my husband going on 30.....lucky man!!!
> 
> I live in Alberta and our new premier is making noise about dropping out of CPP and setting up Alberta with it's own plan under the juridiction of AIM. I am very much AGAINST his idea. Do you think it is feasible or is it just politicing? Also...what suggestions do you have for me to counter his plan.
> 
> Not looking for you to spend a lot of time on this but just your perspective. Thanks again.


Hi Spirit - I personally feel that it's highly unlikely to happen, but the CPP legislation does allow for any province to do so and it prescribes how a province would do so including that such a province must agree to a number of conditions including the following: 
"(ii) for the assumption under that plan of all obligations and liabilities accrued or accruing to the first
day of that third year with respect to the payment of benefits under this Act attributable to contributions
made under this Act in respect of employment in that province or in respect of self-employed earnings
of persons resident in that province;"
If you're already receiving your CPP, there would therefore be no impact on you at all if Alberta came up with its own plan.

Rather than having this subject overtake this thread though, I would ask that someone start a new thread for that purpose if you want to debate it further.


----------



## Longtimeago

james4beach said:


> Thanks Dogger
> 
> Longtimeago maybe you can clarify what you mean. According to that Govt of Canada link:
> 
> 
> 
> So isn't this saying that for OAS purposes, Canada will credit me for my 5 years in the US?
> 
> Or maybe this is just about qualifying (getting nothing vs getting something). Perhaps this can help me qualify, but the amounts received (OAS) are still scaled down.


Yes as answered by Dogger1953, it only refers to 'qualifying' for OAS. Seems kind of useless but I guess in a case where someone does not even have the minimum 10 years to qualify for any payment (or 20 years if you choose to live outside Canada after retiring), it would come into play. 

I don't know if similar agreements also apply to any other countries as well. Might matter to some people in the same way. Again for readers in general who work outside Canada, it is also important to note how 'qualifying years' are determined. They are counted based on full years of residence. Which means that if someone is resident outside of Canada for 1 week into a qualifying year, they lose that year. I don't know if they allow any kind of 'grace' period at all. What is someone was only 1 day short of a full year for example? Seems drastic to deny them a full year for that. But hey, we're talking bureaucracy and 'rules' here aren't we.

In any case james4beach I believe you are only in your 30s and this is likely to be entirely different by the time you reach 65 anyway. The information is really only relevant to those about to retire in the next few years.


----------



## Longtimeago

spirit said:


> Hello and thank you for taking the time to answer questions here on this forum
> 
> I am retired now 3 years and my husband going on 30.....lucky man!!!
> 
> I live in Alberta and our new premier is making noise about dropping out of CPP and setting up Alberta with it's own plan under the juridiction of AIM. I am very much AGAINST his idea. Do you think it is feasible or is it just politicing? Also...what suggestions do you have for me to counter his plan.
> 
> Not looking for you to spend a lot of time on this but just your perspective. Thanks again.


Heard of 'grandfathered' spirit? If you are already retired and getting CPP payments, no change in the future is likely to affect you.
https://dictionary.cambridge.org/dictionary/english/grandfathered
So you do not need to worry about 'countering' his plan.


----------



## spirit

Longtimeago said:


> Heard of 'grandfathered' spirit? If you are already retired and getting CPP payments, no change in the future is likely to affect you.
> https://dictionary.cambridge.org/dictionary/english/grandfathered
> So you do not need to worry about 'countering' his plan.


Hello. I don't think Jason Kenny is thinking of starting over fresh here with contributions of Albertans from when his plan first gets started. I think he is going to ask for Alberta's contribution in the national plan to be given to Alberta to control. So yes, that would make me beholden to his plan. All in the details!!!

The sad thing is....the Canadian Pension Plan is considered to be one of the best in the world. Sigh. 

https://hoopp.com/docs/default-sour...h/top-10-pension-funds-in-canada.pdf?sfvrsn=6


----------



## ian

Let's look at the Alberta track record....

Heritage Fund??? Last time I heard it was empty.

Government Services?? Last time I saw the comparisons Albertans paid more per capital for any and all services delivered by a Province than any province in Canada. Not a new situation either-it has been this way for years.

Jason Kenney???? Really, do people think that he will give Albertans the straight goods or that any Albertan Premier of any stripe will resist using the monies as a political tool?? Politics comes first. And what about those reviewing the issue. Could be that they see lots of opportunity and considerably more salary and/or consulting and legal fees by managing greater sums of money than AIMco currently manages.

The Alberta advantage????? Perhaps if you are a 'friend' of the Government of the day.


----------



## Longtimeago

spirit said:


> Hello. I don't think Jason Kenny is thinking of starting over fresh here with contributions of Albertans from when his plan first gets started. I think he is going to ask for Alberta's contribution in the national plan to be given to Alberta to control. So yes, that would make me beholden to his plan. All in the details!!!
> 
> The sad thing is....the Canadian Pension Plan is considered to be one of the best in the world. Sigh.
> 
> https://hoopp.com/docs/default-sour...h/top-10-pension-funds-in-canada.pdf?sfvrsn=6


What Kenny thinks he will do and what he CAN do are not one and the same thing spirit. There is no way that your existing CPP will be affected by him. Only FUTURE retirees would be affected in any way. As long as you are already receiving CPP payments, you will continue to do so.

Think of it this way, you have already cashed out your chips at the casino, any changes to the ownership of the casino or chip value in the future cannot affect you.


----------



## BC Eddie

Dogger1953 said:


> Then I'm very confused why they should be waiting for anything from the USA, because you clearly meet the requirements for a full OAS pension regardless of your time spent in the USA. I would suggest that you call back again and ask them to explain why they're trying to confirm anything from the USA.


Hi Dogger,

Well I finally made time to call Service Canada back. I asked why the US had to comment on my OAS application when I already had enough years of residency to qualify for a full pension. The first answer I got back was " Because I worked in the US they had to ask the US". 

I then asked what could the US possibly say that would affect my OAS if I already qualify for a full pension? The answer was "I don't know". 

So I asked to speak to someone who did know and after putting me on hold the answer came back: "Because I said I had worked in the US for those years they had to ask the US if those dates were right." I had assumed that on crossing the border both US and Canada would know what the date was but I guess the Canadian calendar is not as accurate as the US


----------



## BC Eddie

Longtimeago said:


> Might be because they are confused by BC Eddie's info as I am. In one comment he refers to working in the USA for 'about 8 years'. It isn't clear if that is him saying that or the person he talked to at Service Canada saying that. In another comment he refers to '2000 returning to Canada in 2006'. Those two statements are contradictory obviously. If it was more than 7 years, then he is NOT eligible for full OAS payment since he will not have 40 years residency between ages 18-65, only 39.
> 
> If they think he lived in the USA for more than 7 years, they may well be questioning just how long he did live there for and asking the USA for confirmation of what years he was resident there.


Sorry, while my statements are confusing I don’t think they are contradictory. To explain: I started working in the US in 1998 but I was flying back and forth every week. In July, 2000 my wife and I moved to the US and we both worked there until February 2006. Thus working in the US eight years and living (as a resident) in the US for six years. 

Perhaps Dogger can answer this? I am not certain about the impossibility of qualifying for a full OAS if I had been living out of Canada for more than 7 years. I have searched but I always encounter the statement "To qualify for a full OAS pension, you must have lived in Canada for at least 40 years after age 18." Does it make any difference if one defers the start of the pension? Is it implied that this calculation is being done when the person is 65? What if, as in my case, I have deferred the start so my age is actually 68. Could I have worked outside Canada for 10 years and still qualify for a full OAS pension?


----------



## BC Eddie

Longtimeago said:


> For those like james4beach who spend time working in another country, keep in mind that each year you do so will be subtracted from your OAS eligibility when you do reach retirement age.
> 
> OAS is only based on residency unlike CPP of course which is based on contributions. For full OAS payment you must have been resident in Canada for 40 years after your 18th birthday. That means there is only 7 years of wiggle room between 18 and 65. James4beach has already used up 5 and so any more than 2 more will start to deduct from potential OAS payment. Each additional year outside of Canada during the eligibility period will result in 1/40th of the potential payment being lost.
> 
> It's just something to be aware of and keep in mind when working outside of Canada.


As usual things are complicated as, in some cases (e.g. working for a Canadian employer in the US) the time would still count towards OAS eligibility.

https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security.html


----------



## Dogger1953

BC Eddie said:


> Hi Dogger,
> 
> Well I finally made time to call Service Canada back. I asked why the US had to comment on my OAS application when I already had enough years of residency to qualify for a full pension. The first answer I got back was " Because I worked in the US they had to ask the US".
> 
> I then asked what could the US possibly say that would affect my OAS if I already qualify for a full pension? The answer was "I don't know".
> 
> So I asked to speak to someone who did know and after putting me on hold the answer came back: "Because I said I had worked in the US for those years they had to ask the US if those dates were right." I had assumed that on crossing the border both US and Canada would know what the date was but I guess the Canadian calendar is not as accurate as the US


This is still a bit of a bogus answer from Service Canada. There would be no need/reason for them to confirm anything with the US authorities unless they weren't satisfied with whatever proof you had provided them with regarding your date(s) of departure from Canada and your date(s) of re-entry to Canada.


----------



## Dogger1953

BC Eddie said:


> Sorry, while my statements are confusing I don’t think they are contradictory. To explain: I started working in the US in 1998 but I was flying back and forth every week. In July, 2000 my wife and I moved to the US and we both worked there until February 2006. Thus working in the US eight years and living (as a resident) in the US for six years.
> 
> Perhaps Dogger can answer this? I am not certain about the impossibility of qualifying for a full OAS if I had been living out of Canada for more than 7 years. I have searched but I always encounter the statement "To qualify for a full OAS pension, you must have lived in Canada for at least 40 years after age 18." Does it make any difference if one defers the start of the pension? Is it implied that this calculation is being done when the person is 65? What if, as in my case, I have deferred the start so my age is actually 68. Could I have worked outside Canada for 10 years and still qualify for a full OAS pension?


The answer to your question is Yes or No. The period from age 65 to age 68 can either count as extra residence in Canada to get you up to 40/40ths OR it can count as an increase of 0.6% per month under the voluntary deferral, but it cannot be counted as both. Your choices at age 68 would therefore be 40/40ths or 37/40th plus a 21.6% increase. I would recommend the latter.


----------



## Dogger1953

BC Eddie said:


> As usual things are complicated as, in some cases (e.g. working for a Canadian employer in the US) the time would still count towards OAS eligibility.
> 
> https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security.html


Whether or not periods of time working in the US for a Canadian employer will count towards OAS eligibility depends on the specifics of the situation. This is probably what Service Canada hopes to clarify with the US authorities in your situation, but I don't think your US SS contributions are going to satisfy them and I suspect they'll be asking you a bunch more questions later.


----------



## Longtimeago

Dogger1953 said:


> This is still a bit of a bogus answer from Service Canada. There would be no need/reason for them to confirm anything with the US authorities unless they weren't satisfied with whatever proof you had provided them with regarding your date(s) of departure from Canada and your date(s) of re-entry to Canada.


I agree with that. I suspect, they suspect (not BC Eddie specifically, but as 'standard operating procedure') anyone who applies under similar circumstances. As I already described, my application was questioned because I had spent time outside Canada in much the same way. The only difference was the country I spent my time in did not share info with Canada as the USA does, so in the end they just had to take my word for it. In BC Eddie's case, they have the means to do some digging for records of comings and goings.


----------



## Longtimeago

BC Eddie said:


> Sorry, while my statements are confusing I don’t think they are contradictory. To explain: I started working in the US in 1998 but I was flying back and forth every week. In July, 2000 my wife and I moved to the US and we both worked there until February 2006. Thus working in the US eight years and living (as a resident) in the US for six years.
> 
> Perhaps Dogger can answer this? I am not certain about the impossibility of qualifying for a full OAS if I had been living out of Canada for more than 7 years. I have searched but I always encounter the statement "To qualify for a full OAS pension, you must have lived in Canada for at least 40 years after age 18." Does it make any difference if one defers the start of the pension? Is it implied that this calculation is being done when the person is 65? What if, as in my case, I have deferred the start so my age is actually 68. Could I have worked outside Canada for 10 years and still qualify for a full OAS pension?


All that matters is residency and what their definition of residency is. Interestingly, they only refer to being outside of Canada for periods of 6 months or more as having to be reported for OAS. They specifically say on the application form, _"Do not include periods when you were outside Canada for less than 6 months at a time."_ So if you returned to Canada weekly as you indicate, you do not have to include the years from 1998 until July, 2000 when you moved to the US. So you should have reported being outside of Canada only from July, 2000 to February, 2006. That is under 6 years.

But, 'residency' is an actual legal term with an actual definition. Legal residency is not the same things as 'where someone lives'. It is entirely possible to be living outside of Canada full time and still be 'deemed to be resident' in Canada by the CRA. It took me 3 years after leaving Canada to get to the point that the CRA agreed to 'deem' me a non-resident for tax purposes in Canada. But I don't know if the definition for OAS is the same as the CRA's definition of residency for tax purposes. If you were in fact spending the majority of your time in the USA from 1998, they could be trying to 'deem you non-resident' for OAS qualification. 

My take from my own experience with OAS was that if you give them any reason to question your eligibility, they will probably want to dig and question. In my own case of having been living in a country where they cannot easily check information I gave them, I really think I would have been better off to just lie and checked, 'Yes, I have always lived in Canada since age 18.'

In any case, I think you just have to let them do their thing and you will get the full benefit qualification given your circumstances. You should not have any reason to have to defer OAS because of the years from 1998 to 2000 since you were not absent for periods of '6 months or more at any time' during those years. If you reported to them that you were working in the USA during those years though, it isn't hard to see why they will be looking for answers. I'd answer any questions about that period of time with the simple statement,_ 'at no time was I absent for 6 months or more at one time.'_ That's what their application says counts.


----------



## Longtimeago

Dogger1953 said:


> The answer to your question is Yes or No. The period from age 65 to age 68 can either count as extra residence in Canada to get you up to 40/40ths OR it can count as an increase of 0.6% per month under the voluntary deferral, but it cannot be counted as both. Your choices at age 68 would therefore be 40/40ths or 37/40th plus a 21.6% increase. I would recommend the latter.


I think it is now clear that BC Eddie was only outside of Canada in terms of 'periods of 6 months or more' and resident in the USA from July, 2000 to February, 2006 which is less than 6 years. There should be no reason to defer payment to qualify for the full 40 years.


----------



## BC Eddie

Longtimeago said:


> I think it is now clear that BC Eddie was only outside of Canada in terms of 'periods of 6 months or more' and resident in the USA from July, 2000 to February, 2006 which is less than 6 years. There should be no reason to defer payment to qualify for the full 40 years.


Yes, well I chose to apply at age 68 not because I thought I needed to wait that long to met the 40 year requirement but from my calculations that was the point I would maximize OAS payments before the clawback would kick in.


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## BC Eddie

Dogger1953 said:


> The answer to your question is Yes or No. The period from age 65 to age 68 can either count as extra residence in Canada to get you up to 40/40ths OR it can count as an increase of 0.6% per month under the voluntary deferral, but it cannot be counted as both. Your choices at age 68 would therefore be 40/40ths or 37/40th plus a 21.6% increase. I would recommend the latter.


Well it would be nice if they give me a choice. From what I understand from my first call I will not get a choice. They will just calculate using my originally requested start date of Feb 2020 and pay the difference in arrears. But given that first Service Canada person did not seem thoroughly knowledgeable - who knows what will happen.

Anyway when I do get a final answer I will make a point of posting it here.

Thanks for the help!


----------



## Dogger1953

BC Eddie said:


> Well it would be nice if they give me a choice. From what I understand from my first call I will not get a choice. They will just calculate using my originally requested start date of Feb 2020 and pay the difference in arrears. But given that first Service Canada person did not seem thoroughly knowledgeable - who knows what will happen.
> 
> Anyway when I do get a final answer I will make a point of posting it here.
> 
> Thanks for the help!


If you want something different from what you first applied for, you have to request what you really want in writing.


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## 1980z28

Hey Dogger

When you take CPP at 60, your benefits are based on your best 35 years of earnings, rather than your best 39 years of earnings if you were to take it at 65. Depending on your earnings from age 18 to 54, your CPP payments might still be close to the maximum if you take it at age 60, but it will definitely be reduced if you wait until age 65.

What does this mean,?,,,, your CPP payments might still be close to the maximum if you take it at age 60, but it will definitely be reduced if you wait until age 65

I retired at 56 in 2017 and living of investments


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## Dogger1953

1980z28 said:


> Hey Dogger
> 
> When you take CPP at 60, your benefits are based on your best 35 years of earnings, rather than your best 39 years of earnings if you were to take it at 65. Depending on your earnings from age 18 to 54, your CPP payments might still be close to the maximum if you take it at age 60, but it will definitely be reduced if you wait until age 65.
> 
> What does this mean,?,,,, your CPP payments might still be close to the maximum if you take it at age 60, but it will definitely be reduced if you wait until age 65
> 
> I retired at 56 in 2017 and living of investments


It would have helped if you had copied more details from the original question, but I can only assume that they indicated that they had something close to 35 years of maximum earnings/contributions. In that scenario, if they applied at age 60 they would be eligible for 64% of a near-maximum pension (35/35ths), but if they waited until age 65 they would receive 100% of a less-than maximum pension (35/39ths). Thus my common reference to receiving a larger slice of a smaller pie, but you still get more pie if you wait.


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## 1980z28

Dogger1953 said:


> It would have helped if you had copied more details from the original question, but I can only assume that they indicated that they had something close to 35 years of maximum earnings/contributions. In that scenario, if they applied at age 60 they would be eligible for 64% of a near-maximum pension (35/35ths), but if they waited until age 65 they would receive 100% of a less-than maximum pension (35/39ths). Thus my common reference to receiving a larger slice of a smaller pie, but you still get more pie if you wait.


Thankyou,i will wait,as i am trying to draw down rrsp until 70 ,,not easy thing to do


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## bradner

Dogger1953 said:


> I worked for CPP for more than 32 years, and have recently retired.
> 
> I'd like to share my knowledge if you have any questions, especially around the calculation of CPP benefits.


Hi,

I was looking at the service Canada website to see what my potential CPP payout would be and I get:


at 60, you could receive $751.60 per month
at 65, you could receive $1,174.37 per month
at 70, you could receive $1,667.61 per month

I'm 52 now with 6 years under the max but I don't think I'll have any more sub max years until 65 - no child drop out years either. Do I interpret this that if I didn't contribute a penny more I'd receive this amount? I'm a bit confused about that. Or does it mean that if I worked with the maximum contribution until 65 (or 60...) is that the $$ amount I would receive?

Thanks for clearing that up for me.


----------



## Dogger1953

bradner said:


> Hi,
> 
> I was looking at the service Canada website to see what my potential CPP payout would be and I get:
> 
> 
> at 60, you could receive $751.60 per month
> at 65, you could receive $1,174.37 per month
> at 70, you could receive $1,667.61 per month
> 
> I'm 52 now with 6 years under the max but I don't think I'll have any more sub max years until 65 - no child drop out years either. Do I interpret this that if I didn't contribute a penny more I'd receive this amount? I'm a bit confused about that. Or does it mean that if I worked with the maximum contribution until 65 (or 60...) is that the $$ amount I would receive?
> 
> Thanks for clearing that up for me.


Service Canada's estimates "pretends" that you're eligible beginning next month, which has the same effect as projecting your current lifetime average earnings through until age 60 (if you take it at age 60) or until age 65 (if you take it at age 65 or later). In other words, you'll have to earn the maximum for 83% of the remaining year until you take your CPP, in order to receive those estimated amounts.


----------



## Zipper

Do you think the government will come through with the 10% OAS bump at 75.

A geezer would like to know?


----------



## Dogger1953

Zipper said:


> Do you think the government will come through with the 10% OAS bump at 75.
> 
> A geezer would like to know?


Not that I have an inside connection, but I suspect they'll try to sneak this OAS increase in with their first budget. So my guess is "Yes", and I think that they were planning it to be effective July 2020.


----------



## one day at a time

Hi Dogger, sorry for the completely newbie question, but someone just told me that they don't contribute to their RRSP, just a margin account, since even though you don't get the tax deduction, they will claw back too much money from the OAS, so it's not worth it in the long term. I don't know much about OAS and the clawbacks, but do you agree with them? Thanks.


----------



## Dogger1953

one day at a time said:


> Hi Dogger, sorry for the completely newbie question, but someone just told me that they don't contribute to their RRSP, just a margin account, since even though you don't get the tax deduction, they will claw back too much money from the OAS, so it's not worth it in the long term. I don't know much about OAS and the clawbacks, but do you agree with them? Thanks.


For the most part, worrying about the OAS clawback only makes sense if you're intending to have net income of between approx. $80,000 to $130,000 after age 65. If your net income will be less than $80,000 you won't be subject to the OAS clawback at all, and if it's above $130,000 you're already fully clawed back so there's no need to worry any longer.


----------



## peterk

For someone about to go on maternity-leave in 2020 (my wife), how is the enhanced CPP going to be applied to the child rearing drop out provision, or is it?

Will she be stuck-in-time at the 2019 contribution rate - 5.1% - or will the "fake contributions" of the drop out provision continue to increase and follow the new enhanced CPP rules? She also makes a higher income than the new "step 2" limit of ~$79,000, which won't kick in until 2025. If 2019 is her last working year of greater than $79000, and for 2020 onwards her income is never more than the YMPE, will she benefit from the enhanced YMPE upper limit at all?

If she is stuck in time at 2019 for these benefits, is there anything she should be doing (like trying to work a full year at some point from 2021 to 2025, between children) to claim a bigger chunk of entitlement from the enhanced CPP?


----------



## Dogger1953

peterk said:


> For someone about to go on maternity-leave in 2020 (my wife), how is the enhanced CPP going to be applied to the child rearing drop out provision, or is it?
> 
> Will she be stuck-in-time at the 2019 contribution rate - 5.1% - or will the "fake contributions" of the drop out provision continue to increase and follow the new enhanced CPP rules? She also makes a higher income than the new "step 2" limit of ~$79,000, which won't kick in until 2025. If 2019 is her last working year of greater than $79000, and for 2020 onwards her income is never more than the YMPE, will she benefit from the enhanced YMPE upper limit at all?
> 
> If she is stuck in time at 2019 for these benefits, is there anything she should be doing (like trying to work a full year at some point from 2021 to 2025, between children) to claim a bigger chunk of entitlement from the enhanced CPP?


This is a very good question, and I'm not going to pretend to have full expertise on this subject, because it's brand new legislation and I haven't seen an actual case yet. Bust first of all, for the base part of her CPP calculation (the 25% earnings-replacement), the child-rearing dropout (CRDO) functions exactly the way that it always has. For the "first additional earnings" portion (8.33% of earnings up to the YMPE), the child-rearing drop-in (CRDI) will supposedly credit her with first additional earnings equal to her average first additional earnings for the 5-year period immediately before the birth of your child. Because she has only one year (2019) of first additional earnings and because that's subject to the reduction for the transition up to the full 5.95% contribution rate, the CRDI will be of very little value to her. 

As to the second additional earnings replacement portion (33.33% of earnings above the YMPE and below the YAMPE - your "step 2"), the CRDI won't apply to her at all unless she has earnings in 2024 or later and if her child(ren) are still under age 7 at that time.

In reality, the enhanced CRDI won't have much impact until around 2030 when someone has had 3 or more years of full enhanced contributions to get full credit for periods of CRDI.


----------



## GreatLaker

one day at a time said:


> Hi Dogger, sorry for the completely newbie question, but someone just told me that they don't contribute to their RRSP, just a margin account, since even though you don't get the tax deduction, they will claw back too much money from the OAS, so it's not worth it in the long term. I don't know much about OAS and the clawbacks, but do you agree with them? Thanks.


@one day at a time Your newb question is actually quite complex and a moving target to solve. This article has some good techniques for managing taxes in retirement, including OAS:
Which Account Should I Draw First In Retirement?

I won't comment further since I don't want to derail Doug's CPP thread with RRSP and OAS discussion. You may get more responses if you start a separate thread for your question.


----------



## peterk

Dogger1953 said:


> This is a very good question, and I'm not going to pretend to have full expertise on this subject, because it's brand new legislation and I haven't seen an actual case yet. Bust first of all, for the base part of her CPP calculation (the 25% earnings-replacement), the child-rearing dropout (CRDO) functions exactly the way that it always has. For the "first additional earnings" portion (8.33% of earnings up to the YMPE), the child-rearing drop-in (CRDI) will supposedly credit her with first additional earnings equal to her average first additional earnings for the 5-year period immediately before the birth of your child. Because she has only one year (2019) of first additional earnings and because that's subject to the reduction for the transition up to the full 5.95% contribution rate, the CRDI will be of very little value to her.
> 
> As to the second additional earnings replacement portion (33.33% of earnings above the YMPE and below the YAMPE - your "step 2"), the CRDI won't apply to her at all unless she has earnings in 2024 or later and if her child(ren) are still under age 7 at that time.
> 
> In reality, the enhanced CRDI won't have much impact until around 2030 when someone has had 3 or more years of full enhanced contributions to get full credit for periods of CRDI.


Thanks Dogger! That's what I suspected. Not like I have much choice in the matter anyways, baby's come when they come. But it does answer the question of: Is there any benefit of my wife earning greater than the YMPE, to take advantage of the YAMPE for years 2021, 2022, or 2023, and the answer is no.


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## Retiredguy

Just wondering, if someone defers OAS to age 70 (approx. 10000 yr) is that amount of OAS still exempt from the GIS calculation, or is it the age 65 amount (approx. 7350) only? I understand GIS is not payable unless the senior is receiving OAS so expect this situation would likely be extremely rare.


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## Dogger1953

Retiredguy said:


> Just wondering, if someone defers OAS to age 70 (approx. 10000 yr) is that amount of OAS still exempt from the GIS calculation, or is it the age 65 amount (approx. 7350) only? I understand GIS is not payable unless the senior is receiving OAS so expect this situation would likely be extremely rare.


Yes, the full amount of OAS will be excluded in determining the GIS calculation.


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## jimbob.seeker

Hi Dogger1953,
My application for CPP (and OAS) was approved last month. I requested a Q1 2021 start date for both.
I was counting on receiving these benefits but with the COVID-19 pandemic in full swing, I am starting to wonder if I should have an alternate plan in place.
A few of my colleagues have jested that there will be nothing left in the government coffers after the pandemic response.
How likely or unlikely is a reduction in CPP/OAS benefits? (Assuming that I will get anything at all.)
Dogger1953, do you have any comments?
If anyone else has thoughts they would like to share, please weigh in.

Thanks,
JimBob


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## Dogger1953

jimbob.seeker said:


> Hi Dogger1953,
> My application for CPP (and OAS) was approved last month. I requested a Q1 2021 start date for both.
> I was counting on receiving these benefits but with the COVID-19 pandemic in full swing, I am starting to wonder if I should have an alternate plan in place.
> A few of my colleagues have jested that there will be nothing left in the government coffers after the pandemic response.
> How likely or unlikely is a reduction in CPP/OAS benefits? (Assuming that I will get anything at all.)
> Dogger1953, do you have any comments?
> If anyone else has thoughts they would like to share, please weigh in.
> 
> Thanks,
> JimBob


For whatever it's worth, in my opinion CPP will never be reduced and while OAS may have some changes in the future, I don't see that in the near future and certainly not as a result of this pandemic.


----------



## jimbob.seeker

Dogger1953 said:


> For whatever it's worth, in my opinion CPP will never be reduced and while OAS may have some changes in the future, I don't see that in the near future and certainly not as a result of this pandemic.


Thank you Dogger1953, your words bring me much needed relief.


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## Zipper

Dogger 1953, any indication that the 10% increase in OAS payments for seniors over 75 is still on track?


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## Dogger1953

Zipper said:


> Dogger 1953, any indication that the 10% increase in OAS payments for seniors over 75 is still on track?


Interesting question. I had actually forgotten about that promise. I haven't seen any proposed or passed legislation dealing with this promise, so I'll be surprised if it happens effective July 2020 as promised. Perhaps they'll just slip it into the next budget, but this is something that could be delayed or forgotten completely in my mind.


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## BC Eddie

Hi Dogger,

I am trying to pick the optimum date for my CPP to start. 

June 17, 2021 is my 70th birthday. CPP is typically deposited into bank accounts on the 26th or 27th of the month. In order to maximize the payment increase due to deferment from age 65 do I need to wait to start CPP in July or is June late enough?


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## Brian K

I took my CPP at age 60. Why? Let me explain. At the time my wife had stage 4 breast cancer and the prognosis wasn't good - (she passed away in 2016 just after I turned 60). We had both paid max CPP's premiums all our working lives so expected to get the max CPP upon retirement. When I was 59 I phoned CPP and asked what I'd receive for different ages of retirement. In roundish number, at 60 I'd get about $650 per month, at 65 I'd get about $1000 and if (and when) my wife passed away I'd get ~60% of her CPP paid to me on a monthly basis in addition to my CPP. As I said these amounts are close but not accurate - but to my surprise, when I asked the CPP person how much I'd get once I got my wife's pension (assuming she would pass away) she said that I would be best off to take the pension at 60 because there is another 'clause' in their rules that say the maximum CPP payout was ~$1100 per month (again a rough number) so waiting until 65 to get the $1000 of my CPP and ~$600 or my wife's CPP wouldn't pay $1600/month because they would limit my CPP to the $1100 max Payout limit. Actually she recommended that I take my pension at 60 because if my wife passed away, their Max Payout limit would still claw back $25. (I know the numbers I am quoting aren't right but the point is the Max Payout Rule). I asked where that 'max payout rule' was and she said it was in their documentation - but not published for the public to see for some reason.
So if there is a possibility that my experience with a very ill spouse that has a good change of passing away, or perhaps that person is you and you're concerned about your spouse maximizing CPP, hopefully this post may help you decide what you should do. Also phone CPP and verify what your CPP benefits will be - it was free for me, just a phone call. There was no charge to find out what I'd get and they were quite helpful - although I was very surprised with this payout limit. Of course this Max Payout amount probably goes up yearly as the cost of living increases both CPP and the Max payout but it sure was an eye opener.


----------



## Dogger1953

BC Eddie said:


> Hi Dogger,
> 
> I am trying to pick the optimum date for my CPP to start.
> 
> June 17, 2021 is my 70th birthday. CPP is typically deposited into bank accounts on the 26th or 27th of the month. In order to maximize the payment increase due to deferment from age 65 do I need to wait to start CPP in July or is June late enough?


Hi BC Eddie - If you want the full 42% increase, you would have to request a July 2021 effective date, and as you suggest, payment is supposed to be the 3rd last banking day of the month.


----------



## Dogger1953

Brian K said:


> I took my CPP at age 60. Why? Let me explain. At the time my wife had stage 4 breast cancer and the prognosis wasn't good - (she passed away in 2016 just after I turned 60). We had both paid max CPP's premiums all our working lives so expected to get the max CPP upon retirement. When I was 59 I phoned CPP and asked what I'd receive for different ages of retirement. In roundish number, at 60 I'd get about $650 per month, at 65 I'd get about $1000 and if (and when) my wife passed away I'd get ~60% of her CPP paid to me on a monthly basis in addition to my CPP. As I said these amounts are close but not accurate - but to my surprise, when I asked the CPP person how much I'd get once I got my wife's pension (assuming she would pass away) she said that I would be best off to take the pension at 60 because there is another 'clause' in their rules that say the maximum CPP payout was ~$1100 per month (again a rough number) so waiting until 65 to get the $1000 of my CPP and ~$600 or my wife's CPP wouldn't pay $1600/month because they would limit my CPP to the $1100 max Payout limit. Actually she recommended that I take my pension at 60 because if my wife passed away, their Max Payout limit would still claw back $25. (I know the numbers I am quoting aren't right but the point is the Max Payout Rule). I asked where that 'max payout rule' was and she said it was in their documentation - but not published for the public to see for some reason.
> So if there is a possibility that my experience with a very ill spouse that has a good change of passing away, or perhaps that person is you and you're concerned about your spouse maximizing CPP, hopefully this post may help you decide what you should do. Also phone CPP and verify what your CPP benefits will be - it was free for me, just a phone call. There was no charge to find out what I'd get and they were quite helpful - although I was very surprised with this payout limit. Of course this Max Payout amount probably goes up yearly as the cost of living increases both CPP and the Max payout but it sure was an eye opener.


Hi Brian - I'm happy that you feel that you got good service, but your agent (like most Service Canada agents) didn't fully understand the combined benefit rules (what you have called the "Max Payout Rule"). First of all, the maximum retirement pension in 2016 was $1,092.50 (close enough to your estimate of $1,100), but I'm betting that your combined benefit after your wife passed away was closer to $1,030 than it was to $1,100, and it has only grown to around $1,105 now through four years of escalation. And did she tell you that it was going to be recalculated when you turn age 65 and that the recalculation would result in a decrease of approx. $100 at that time, to around $1,000 per month? I bet she didn't!

Whereas if you had waited until age 65 to take your own CPP, you would have received the $600 survivor's in the interim and your combined benefit at age 65 would likely be around the 2020 maximum of $1,175. Or if you had waited until age 70, your survivors would have increased to around $700 from age 65 to 70, and from 70 onwards you could have received a combined benefit of approx. $1,668.

I'm not saying that you made the wrong decision, but I am suggesting that maybe you didn't get as good of a service as you think you did.

Read this article to fully understand the combined benefit formulas that most Service Canada agents don't fully understand:








Understanding the CPP survivor's pension - Retire Happy


Here's how CPP benefits are calculated when someone is eligible for both a CPP retirement pension and a CPP survivor benefit.




retirehappy.ca


----------



## BC Eddie

Dogger1953 said:


> Hi BC Eddie - If you want the full 42% increase, you would have to request a July 2021 effective date, and as you suggest, payment is supposed to be the 3rd last banking day of the month.


That is what I had suspected but wanted to confirm with you first. 
Many thanks Dogger!


----------



## BC Eddie

Brian K said:


> I took my CPP at age 60. Why? Let me explain. At the time my wife had stage 4 breast cancer and the prognosis wasn't good - (she passed away in 2016 just after I turned 60). We had both paid max CPP's premiums all our working lives so expected to get the max CPP upon retirement. When I was 59 I phoned CPP and asked what I'd receive for different ages of retirement. In roundish number, at 60 I'd get about $650 per month, at 65 I'd get about $1000 and if (and when) my wife passed away I'd get ~60% of her CPP paid to me on a monthly basis in addition to my CPP. As I said these amounts are close but not accurate - but to my surprise, when I asked the CPP person how much I'd get once I got my wife's pension (assuming she would pass away) she said that I would be best off to take the pension at 60 because there is another 'clause' in their rules that say the maximum CPP payout was ~$1100 per month (again a rough number) so waiting until 65 to get the $1000 of my CPP and ~$600 or my wife's CPP wouldn't pay $1600/month because they would limit my CPP to the $1100 max Payout limit. Actually she recommended that I take my pension at 60 because if my wife passed away, their Max Payout limit would still claw back $25. (I know the numbers I am quoting aren't right but the point is the Max Payout Rule). I asked where that 'max payout rule' was and she said it was in their documentation - but not published for the public to see for some reason.
> So if there is a possibility that my experience with a very ill spouse that has a good change of passing away, or perhaps that person is you and you're concerned about your spouse maximizing CPP, hopefully this post may help you decide what you should do. Also phone CPP and verify what your CPP benefits will be - it was free for me, just a phone call. There was no charge to find out what I'd get and they were quite helpful - although I was very surprised with this payout limit. Of course this Max Payout amount probably goes up yearly as the cost of living increases both CPP and the Max payout but it sure was an eye opener.


Thanks Brian for sharing your experience and sorry about your loss. Fortunately for my wife and I we are both quite healthy and are betting on a long time together. Because of this we both view maximizing our CPP (and OAS) benefits by delaying as one way to reduce the anxiety of running out of money. 

Also, back in 2014, I took advantage of the service Dogger provides to verify the amounts we can expect to receive for CPP and that has also added to our piece of mind.


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## dubmac

Hi Dogger.

I read your updates frequently -they have helped me out in planning, even in these strange times. I recently rec'd an update from Dave Field on the benefits of reducing RRIF minimum payments. He writes:

You (retiree) have the option to reduce your minimum RRIF payment by 25 percent. This was one of the Government of Canada’s first announcements in March. This is beneficial only if your retirement income strategy has been to take the absolute minimum out of your RRIF every year and you would like to take 25 percent less of the minimum. If that has been your strategy, you may want to investigate this. 

I would expect that reducing a retirees RRIF payment would reduce their annual income from retirement sources, and thereby reduce any OAS or other clawback that the federal govt may impose. Does reducing the RRIF income maximize the amount from govt (OAS, CPP) sources?


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## Dogger1953

dubmac said:


> Hi Dogger.
> 
> I read your updates frequently -they have helped me out in planning, even in these strange times. I recently rec'd an update from Dave Field on the benefits of reducing RRIF minimum payments. He writes:
> 
> You (retiree) have the option to reduce your minimum RRIF payment by 25 percent. This was one of the Government of Canada’s first announcements in March. This is beneficial only if your retirement income strategy has been to take the absolute minimum out of your RRIF every year and you would like to take 25 percent less of the minimum. If that has been your strategy, you may want to investigate this.
> 
> I would expect that reducing a retirees RRIF payment would reduce their annual income from retirement sources, and thereby reduce any OAS or other clawback that the federal govt may impose. Does reducing the RRIF income maximize the amount from govt (OAS, CPP) sources?


Hi Dubmac - I don't see that reducing RRIF withdrawals would affect either CPP or OAS directly, but because all 3 of those amounts are taxable income, reducing the RRIF amount could allow you to keep more of your CPP or OAS if it puts you in a lower tax bracket. And if you were receiving GIS in addition to your OAS, it could increase your GIS directly, although there is a significant time lag since the amount of GIS is based on the prior year's income.


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## Retiredguy

If someone was receiving the max age 65 CPP and the CPI exceeded the average industrial wage could they receive more than the maximum yearly amount (YMPE) which is calculated on the average industrial wage.


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## Dogger1953

Retiredguy said:


> If someone was receiving the max age 65 CPP and the CPI exceeded the average industrial wage could they receive more than the maximum yearly amount (YMPE) which is calculated on the average industrial wage.


Hi RG - Yes, that can certainly happen, and in fact it happened from 2019 to 2020. The maximum in 2019 was $1,154.58, and escalated to 2020 that worked out to $1,176.52, compared to the 2020 maximum of $1,175.83.


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## Retiredguy

Trying to help a friend here.
Husband has died. He started his CPP in 1993 at age 60 and received the maximum less 30%. His 2020 amount was 756.48.
Surviving spouse started her own CPP at age 65. Her 2020 amount is 850.90.

I have calculated as follows;
Her combined max 1175.83 (2020)
His normal pension 1175.83 x.60 = 705.50
Option B
b1) 705.50 x.40 = 282.20
b2) 850.90 x .40 = 340.36

705.50 - 282.20 (lessor of option b1/b2) = 423.30 "max benefit"

This years max being 1175.83 - her own cpp of 850.90 = 324.93 survivor benefit.

Is this correct?


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## Dogger1953

Retiredguy said:


> Trying to help a friend here.
> Husband has died. He started his CPP in 1993 at age 60 and received the maximum less 30%. His 2020 amount was 756.48.
> Surviving spouse started her own CPP at age 65. Her 2020 amount is 850.90.
> 
> I have calculated as follows;
> Her combined max 1175.83 (2020)
> His normal pension 1175.83 x.60 = 705.50
> Option B
> b1) 705.50 x.40 = 282.20
> b2) 850.90 x .40 = 340.36
> 
> 705.50 - 282.20 (lessor of option b1/b2) = 423.30 "max benefit"
> 
> This years max being 1175.83 - her own cpp of 850.90 = 324.93 survivor benefit.
> 
> Is this correct?


Hi RG - You made one basic error, but you got the right answer. As with your previous question, just because he qualified for a maximum pension in 1993 doesn't mean that the survivor's pension in 2020 would be 60% of the 2020 maximum of $1,175.83. What you do is take his 2020 rate of $756.48 and divide that by his reduction factor of 70% to get his unreduced pension of $1,080.69. The full >65 survivor's pension would be 60% of $1,080.69 or $648.41, not $705.50.


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## Retiredguy

Thank you!


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## martik777

My spouse passed at age 62 and I am still working at 58. I am receiving a CPP survivors pension of 500/mo. When I start my CPP will the survivors pension be adjusted (reduced) based on my CPP? My estimate for CPP at age 65 is ~ $1000. Should I take it earlier to maximize my total CPP?


----------



## Dogger1953

martik777 said:


> My spouse passed at age 62 and I am still working at 58. I am receiving a CPP survivors pension of 500/mo. When I start my CPP will the survivors pension be adjusted (reduced) based on my CPP? My estimate for CPP at age 65 is ~ $1000. Should I take it earlier to maximize my total CPP?


Hi Martik - Yes, your CPP survivor's pension will be reduced if/when you apply for your own CPP retirement pension, and if you do take your CPP prior to age 65, the survivor's pension will be recalculated again (usually reduced further) when you turn age 65. I strongly suggest that you fully understand what your real numbers will be if you take your CPP at age 60, 65 and 70. You can better understand these choices if you read this article:








Understanding the CPP survivor's pension - Retire Happy


Here's how CPP benefits are calculated when someone is eligible for both a CPP retirement pension and a CPP survivor benefit.




retirehappy.ca


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## martik777

Thanks!


----------



## OntMan

Would like to know the effect on my CPP pension by not working after age 59 and collecting starting at age 65. Currently my estimate on Service Canada is slightly under the max at $1140 mth at age 65. I am thinking of retiring next year at age 59 on a small company pension, savings, RSPs but waiting until 65 to maximize my CPP payments. By not working and not contributing to CPP between ages 59 and 65, how much does that reduce my current CPP estimated monthly payment?
I have 30 yrs of maximum contributions and a numbers of years close to max. Both of my parents made it to age 90, so I’m expecting to be around for a bit.


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## Dogger1953

OntMan said:


> Would like to know the effect on my CPP pension by not working after age 59 and collecting starting at age 65. Currently my estimate on Service Canada is slightly under the max at $1140 mth at age 65. I am thinking of retiring next year at age 59 on a small company pension, savings, RSPs but waiting until 65 to maximize my CPP payments. By not working and not contributing to CPP between ages 59 and 65, how much does that reduce my current CPP estimated monthly payment?
> I have 30 yrs of maximum contributions and a numbers of years close to max. Both of my parents made it to age 90, so I’m expecting to be around for a bit.


Hi OntMan - Depending on your lifetime record of pensionable earnings, it could remain at $1,140 or it could decrease by as much as almost 10%. Here is a link that explains how you can find out if/how much yours will change: 








DR Pensions Consulting: CPP calculation service


DR Pensions Consulting can provide an accurate estimate of your CPP benefit at any age from 60 to 70.



www.drpensions.ca


----------



## james4beach

AltaRed said:


> Doubt AIMCO can outperform CPPIB and further there is risk of investment decision bias just like there is in Quebec.


AIMCo also just recently blew up, and lost billions of $, on a faulty volatility trading strategy during the COVID crash. Financial engineering gone awry. It's a big enough blow up that Bloomberg is circulating the story internationally.









Alberta loses billions in faulty strategy


This Bloomberg article tipped me off. Has anyone else heard about this? Apparently, AIMCo (the Alberta Investment Management Corp., which invests Alberta public pensions) lost billions of $ on faulty volatility strategies during the recent market crash...




www.canadianmoneyforum.com


----------



## dubmac

Hi Dogger. Quick question. I'm 59 now & have been plugging along with maxing out CPP contributions as the primary income earner. My wife, 58, having raised two boys, has contributed (until recently) a small amount (13K in 2019) - she has not contributed (much) to CPP for the past 25 years. Our CPP will come largely from my source which I will take in 2024-25 near max amount. My question: Is it possible to "Buy-back" lost contribution years when my wife was raising 2 boys? (I am aware that when she takes her CPP that she is entitled to the child-raising provision).


----------



## Dogger1953

dubmac said:


> Hi Dogger. Quick question. I'm 59 now & have been plugging along with maxing out CPP contributions as the primary income earner. My wife, 58, having raised two boys, has contributed (until recently) a small amount (13K in 2019) - she has not contributed (much) to CPP for the past 25 years. Our CPP will come largely from my source which I will take in 2024-25 near max amount. My question: Is it possible to "Buy-back" lost contribution years when my wife was raising 2 boys? (I am aware that when she takes her CPP that she is entitled to the child-raising provision).


Hi Dubmac - No, there is no provision in the CPP legislation to "buy-back" any missing years of contributions. However, the child-rearing provision (CRP) that you mention will allow her to exclude any years when at least one of the children was under age 7 and she had zero earnings or dropout any years where she had earnings but where they were lower than her lifetime average earning. In some ways this is better than buying-back years, because by reducing the number of years that her earnings are averaged over, this makes any earnings/contributions that she did have more valuable than they would otherwise be.


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## dubmac

thanks Dogger


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## Money172375

How does one estimate CPP and OAS if I stopped contributing at Age 45? I have 17 years at max contributions. And 7 years with less than max contributions. Estimate from CRA my account at 65 is $1036.


----------



## Dogger1953

Money172375 said:


> How does one estimate CPP and OAS if I stopped contributing at Age 45? I have 17 years at max contributions. And 7 years with less than max contributions. Estimate from CRA my account at 65 is $1036.


Hi Money - The correct answer is certainly less than $1,036, but in order to accurately estimate your CPP, I'd need to know what % of the YMPE each of your 7 years of less than maximum earnings were, and it would be helpful to know if the year that you turned age 18 (unless you were born in December?) was one of your maximum years, one of your less-than-maximum years or was it a zero year. What is your month and year of birth?


----------



## Dogger1953

Money172375 said:


> How does one estimate CPP and OAS if I stopped contributing at Age 45? I have 17 years at max contributions. And 7 years with less than max contributions. Estimate from CRA my account at 65 is $1036.


Hi Money - I should have said that for OAS it doesn't matter whether you are working or not. It just depends on whether you will be residing in Canada or not. When you turn age 65, how many years of residence in Canada will you have, after you turned age 18?


----------



## Money172375

Dogger1953 said:


> Hi Money - I should have said that for OAS it doesn't matter whether you are working or not. It just depends on whether you will be residing in Canada or not. When you turn age 65, how many years of residence in Canada will you have, after you turned age 18?


Lifelong Canadian.


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## Money172375

Dogger1953 said:


> Hi Money - The correct answer is certainly less than $1,036, but in order to accurately estimate your CPP, I'd need to know what % of the YMPE each of your 7 years of less than maximum earnings were, and it would be helpful to know if the year that you turned age 18 (unless you were born in December?) was one of your maximum years, one of your less-than-maximum years or was it a zero year. What is your month and year of birth?


Maximum contributions didn’t start until age 25.

Total. Base

1996$31.28$31.28$4,617.001997$84.03$84.03$5,731.001998$353.11$353.11$14,534.001999$686.60$686.60$23,117.00


2017$2,508.56$2,508.56$54,178.002018$858.24$858.24$20,838.002019$1,078.66$32.68$1,111.34$25,290.00$25,290.002020$0.00$0.00$0.00$0.00


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## Dogger1953

If you make no further contributions, your CPP at age 65 will be $606 52 (in 2020 dollars).


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## Dogger1953

Money172375 said:


> Lifelong Canadian.


Then you will be eligible for the full basic OAS (currently $613.53 monthly), subject to the OAS clawback if your annual income at that time exceeds ~ $80,000.


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## Money172375

Thx!


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## Retiredguy

Dogger, in the speech from the throne it was said they intend to change the cpp survivor benefit. Do you have any thoughts or inside info on what the changes might be?


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## Dogger1953

Hi RG - I understand that their plan is to increase the amount, but I don't know by how much. Perhaps they want to catch up to the QPP, which does currently provide for higher survivor's pensions.


----------



## Zipper

It looks like the OAS10% boost for 75+ year olds is gone.

It appears to have been a symbolic gesture to garner votes.


----------



## OptsyEagle

Zipper said:


> It looks like the OAS10% boost for 75+ year olds is gone.
> 
> It appears to have been a symbolic gesture to garner votes.


That was an absolute waste of taxpayer money. It annoys me when I see the government do these things. If you can make it to 75 without the boost, why do you automatically need it now?

I would say the same thing about deferring the RRIF to age 69. If you can make it to age 69 without needing a RRIF payment you probably don't really need the RRIF money at all. Soooooo, that looks like a pretty good place to take a few bucks for a government trying to figure out how to pay people to do nothing. Not sure why they don't lower it to age 65. I guess too many voters have RRSPs.


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## Dogger1953

Zipper said:


> It looks like the OAS10% boost for 75+ year olds is gone.
> 
> It appears to have been a symbolic gesture to garner votes.


Hi Zipper - The increase to OAS at age 75 did make the Throne Speech too, but whether it will really happen is certainly debatable.


----------



## Canuck101

If I stopped working at 50 with 28 max annual contributions, how much would the CPP be reduced at age 65 due to the extra 5 years of zero earnings vs age 60?


----------



## Dogger1953

Canuck101 said:


> If I stopped working at 50 with 28 max annual contributions, how much would the CPP be reduced at age 65 due to the extra 5 years of zero earnings vs age 60?


Hi Canuck - Ignoring the enhanced CPP for now, if you take your CPP at age 60 it's based on your best 34. 8 years (83% of 42 years) and at age 65 it's based on your best 39 years (83% of 47 years). Assuming that those 28 years of max are your only earnings, your two choices are taking 64% of 28/34.8 at age 60 or 100% of 28/39 at age 65. In percentages, that works out to approx 51.5% of max at age 60 or 71.8% of max at age 65. In 2020 dollars, that would be approx $605 at age 60 or $844 at age 65. Does this help?


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## Canuck101

Yes, taking it at 60 has the effect of reducing the normal 36% discount to 28.4% but the discount reduction becomes less each subsequent year. (64% of 844 = $540 vs $605)
Thanks!


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## dubmac

Hey Dogger - Is there an upper limit of "Maximum Contributions" required to maximize returns on CPP in retirement? I mean, for example, if person A contributes 30 Maximum contribution in their employment history, and person B contributes 35, person B will likely get more but is the difference between A and B significant? ,


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## Dogger1953

Hi Dubmac - If we ignore the enhanced CPP for now an age-65 CPP retirement pension is based on your best (in terms of % of max) 39 years of earnings/contributions. That means that year of max earnings is worth exactly 1/39th of the maximum CPP, or in 2020 dollars $1,175.83/39 = $30.15. So 35 years of max contributions is worth $150.75 more than 30 years of max contributions.


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## martik777

Will taking CPP at 60 provide any more room for the survivor's benefit than taking it at 65? I'm assuming the CPP benefit is less than the maximum


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## Dogger1953

martik777 said:


> Will taking CPP at 60 provide any more room for the survivor's benefit than taking it at 65? I'm assuming the CPP benefit is less than the maximum


Hi Martik - The answer to your question is definitely 100% *NO. *To be clearer, taking your CPP at age 60 at a 36% reduction will *NOT* increase the amount of room for additional survivor's pension under the combined benefit rules.


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## mmlucki99

Hello, 
If delaying taking CPP, is the amount of new CPP payment calculated on index of CPP ? Or just the CPP at 65 ? 
For example , if the CPP amount at 65 is 1000/month , delay until 70 ( 42 % increased) and index each year is 1% 
If no delay, At 70, the monthly CPP with 1% index every year is $1051/month 
If delay until 70, is The CPP amount at 70 = $1420/month (42% increased from $1000) 
Or is it $1492.42 ? (42% increased from $1051) ? 
Thank You very much


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## Dogger1953

mmlucki99 said:


> Hello,
> If delaying taking CPP, is the amount of new CPP payment calculated on index of CPP ? Or just the CPP at 65 ?
> For example , if the CPP amount at 65 is 1000/month , delay until 70 ( 42 % increased) and index each year is 1%
> If no delay, At 70, the monthly CPP with 1% index every year is $1051/month
> If delay until 70, is The CPP amount at 70 = $1420/month (42% increased from $1000)
> Or is it $1492.42 ? (42% increased from $1051) ?
> Thank You very much


Hi mmluck - The truth is that neither of these options is exactly correct, but what really happens is closest to your 2nd option of 42% increase from $1,051. In your example though, the $1,051 results from 5 successive 1% increases based on the annual CPI increases to ensure that benefits in pay keep up with price increases. Since by delaying until age 70 the benefit isn't indexed yearly by the annual 1% increase, but instead it is indexed once at age 70 based on the ratio of the five-year average YMPE at age 70 compared with the five-year average YMPE that existed at age 65. This could result in a greater or lesser increase than the 5 successive 1% increases, but historically it has tended to be a greater increase. Whichever it is, the 42% increase for the delay is applied on top of the indexing for the increase to the YMPE over that period.


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## mmlucki99

Great. Thank you very much Dogger.


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## newfoundlander61

If I were to draw CPP starting at age 60, but wanted to continue working at my current do I need to fill out any specific paperwork to let the agency that pays the CPP know or just keep working. I am aware that CPP contributions would still be taken from my paycheck. The amount I would receive at age 60 according to my Service Canada Account is aprox $600 ( by next summer more contributions would be made so this should be pretty close to the actual amount). If I want to age 65 it has an amount of approx $935. Thanks for any info on my main question.


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## Dogger1953

newfoundlander61 said:


> If I were to draw CPP starting at age 60, but wanted to continue working at my current do I need to fill out any specific paperwork to let the agency that pays the CPP know or just keep working. I am aware that CPP contributions would still be taken from my paycheck. The amount I would receive at age 60 according to my Service Canada Account is aprox $600 ( by next summer more contributions would be made so this should be pretty close to the actual amount). If I want to age 65 it has an amount of approx $935. Thanks for any info on my main question.


Hi Nfld61 - Aside from the application needed to start receiving your CPP, there is no other paperwork necessary for either CRA or Service Canada (CRA collects your CPP contributions and Service Canada calculates and pays your CPP benefits). Every year that you have earnings/contributions after you start receiving your CPP retirement pension, you will become eligible for a post-retirement benefit (PRB) which will get added to your regular retirement pension. 

If you're still working when you reach age 65, you can opt out from making any further CPP contributions, or you can continue contributing and continue to earn more PRBs.


----------



## newfoundlander61

Dogger1953 said:


> Hi Nfld61 - Aside from the application needed to start receiving your CPP, there is no other paperwork necessary for either CRA or Service Canada (CRA collects your CPP contributions and Service Canada calculates and pays your CPP benefits). Every year that you have earnings/contributions after you start receiving your CPP retirement pension, you will become eligible for a post-retirement benefit (PRB) which will get added to your regular retirement pension.
> 
> If you're still working when you reach age 65, you can opt out from making any further CPP contributions, or you can continue contributing and continue to earn more PRBs.


Thanks kindly, last question is how far ahead should I apply with my DOB being in June. I will do it via online which I am guessing will be faster than mailing in forums.


----------



## Retired Peasant

Service Canada recommends you apply 6 months before you want it to start.
How to apply for your CPP early, and should you?


----------



## Dogger1953

newfoundlander61 said:


> Thanks kindly, last question is how far ahead should I apply with my DOB being in June. I will do it via online which I am guessing will be faster than mailing in forums.


Hi Nflder61 - As RP says, I would agree that applying 6 months ahead will likely guarantee that you receive your first payment on time (at the end of July) although online applications usually are processed fairly quickly and you may get away with applying only a couple of months ahead of your birthday.


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## fourtwenty

I've been working on my (early) retirement plans. I refer to it as "stop working" rather than retiring because I might still work here or there, doing something I enjoy. When I go see what sort of CPP I will qualify for, their website shows my work history and contributions. I'm 45, have been contributing since I was 18 with maximum contributions since 2002. For the estimated amounts, does this # assume I continue contributing the maximum amount until I hit the ages shown below? I have to assume so but they don't make it clear in their website. These are the numbers it's giving me:

at 60, you could receive $704.76 per month
at 65, you could receive $1,101.19 per month
at 70, you could receive $1,563.69 per month

How do I figure out what my CPP is worth if I stop working at an age earlier than 60? I realize 60 is the earliest I can collect it, and that delaying collecting it increases how much I will get each month.

I'm working on establishing what sort of income I will have at various ages of retirement so having a formula to calculate different age scenarios would extremely useful.

I found the retirement income calculator on the GOC website but it gives me the same results as the ones I posted above. I hope to stop working by the time I'm 50 but that's flexible. If I did continue to work it would consulting/contract work that likely wouldn't involve CPP contributions or it would be part time at some sort of low wage job so it likely wouldn't impact my CPP that much.

Thanks for any help you can share!


----------



## Dogger1953

fourtwenty said:


> I've been working on my (early) retirement plans. I refer to it as "stop working" rather than retiring because I might still work here or there, doing something I enjoy. When I go see what sort of CPP I will qualify for, their website shows my work history and contributions. I'm 45, have been contributing since I was 18 with maximum contributions since 2002. For the estimated amounts, does this # assume I continue contributing the maximum amount until I hit the ages shown below? I have to assume so but they don't make it clear in their website. These are the numbers it's giving me:
> 
> at 60, you could receive $704.76 per month
> at 65, you could receive $1,101.19 per month
> at 70, you could receive $1,563.69 per month
> 
> How do I figure out what my CPP is worth if I stop working at an age earlier than 60? I realize 60 is the earliest I can collect it, and that delaying collecting it increases how much I will get each month.
> 
> I'm working on establishing what sort of income I will have at various ages of retirement so having a formula to calculate different age scenarios would extremely useful.
> 
> I found the retirement income calculator on the GOC website but it gives me the same results as the ones I posted above. I hope to stop working by the time I'm 50 but that's flexible. If I did continue to work it would consulting/contract work that likely wouldn't involve CPP contributions or it would be part time at some sort of low wage job so it likely wouldn't impact my CPP that much.
> 
> Thanks for any help you can share!


Hi 420 - Ignoring the enhanced CPP changes, the closest thing to the truth is that for your CPP to remain at $1,101.19 (in 2021 dollars) when you turn age 65, you would have to have average earnings at 91.5% of the YMPE for 16.6 years out of the next 20 years. If you can figure out why that is true, you should be able to play with lots of different scenarios.


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## Retiredguy

newfoundlander61 said:


> Thanks kindly, last question is how far ahead should I apply with my DOB being in June. I will do it via online which I am guessing will be faster than mailing in forums.


I applied online about 9 months prior to my requested start date which was 65 plus 7 months. I checked my online account 4 days after I had applied and it showed I had been approved and the correct start month. About 7 months later , after I had applied, I received a letter confirming. My cpp then appeared in my account on the proper date.


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## Mukhang pera

Master dogger1953,

I was asked this question by someone whose spouse died recently: 

"We got married after his retirement age, would that affect my claim as surviving spouse, because I read somewhere that if you get married after retirement age, the spouse will not be entitled to a survivor's pension." 

I have never heard of a survivor's benefit being denied in such a scenario and I see nothing on the government website about CPP that support that view. But perhaps it's one of those rules that's so open and notorious that few of us ever need to ask about it. I am sure you know. Your answer would be appreciated.

I don't think it matters, but the query came from someone who married the spouse in 2012 and separated in 2016. They were still spouses at the date of death. The deceased spouse had been married and divorced before (prior to 2012).


----------



## Dogger1953

Mukhang pera said:


> Master dogger1953,
> 
> I was asked this question by someone whose spouse died recently:
> 
> "We got married after his retirement age, would that affect my claim as surviving spouse, because I read somewhere that if you get married after retirement age, the spouse will not be entitled to a survivor's pension."
> 
> I have never heard of a survivor's benefit being denied in such a scenario and I see nothing on the government website about CPP that support that view. But perhaps it's one of those rules that's so open and notorious that few of us ever need to ask about it. I am sure you know. Your answer would be appreciated.
> 
> I don't think it matters, but the query came from someone who married the spouse in 2012 and separated in 2016. They were still spouses at the date of death. The deceased spouse had been married and divorced before (prior to 2012).


Hi MP - Good question! That type of restriction is not uncommon in many DB plans, but it is not a factor for a CPP survivor's pension. As long as they were still legally married and as long as the deceased wasn't living in a valid common-law relationship at the time of death, she should be eligible for the CPP survivor's pension.


----------



## Mukhang pera

Thanks so much for your prompt and helpful reply Dogger!

I had never heard of the survivor's pension being denied on the basis of age at date of marriage, etc., but I thought it prudent to check with few before sounding too confident in giving a reply. You have helped a lot.


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## newfoundlander61

I got a question, my plan is to apply to start receiving CPP this year in July. My plan is to apply online which is faster a couple of months before. When I check online it shows my CPP Contibution Statement up to the end of 2020. *My question is *"do the contributions deducted made from my paychecks starting Jan this year up to the end of the month prior to my CPP starting, get get factored into the monthly payment amount."Currently is shows a payment of $600 ( I am applying early for a variety of reasons and am aware of the reduction in payment by not waiting until later).


----------



## BC Eddie

newfoundlander61 said:


> I got a question, my plan is to apply to start receiving CPP this year in July. My plan is to apply online which is faster a couple of months before. When I check online it shows my CPP Contibution Statement up to the end of 2020. *My question is *"do the contributions deducted made from my paychecks starting Jan this year up to the end of the month prior to my CPP starting, get get factored into the monthly payment amount."Currently is shows a payment of $600 ( I am applying early for a variety of reasons and am aware of the reduction in payment by not waiting until later).


From my experience you better not delay any longer in applying as there has been at times, over a year delay in when payments actually start.


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## newfoundlander61

I was going by the info posted at the website "7 to 14 days for online applications, tt could take longer to process your application if Service Canada does not have a complete application."


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## Dogger1953

newfoundlander61 said:


> I got a question, my plan is to apply to start receiving CPP this year in July. My plan is to apply online which is faster a couple of months before. When I check online it shows my CPP Contibution Statement up to the end of 2020. *My question is *"do the contributions deducted made from my paychecks starting Jan this year up to the end of the month prior to my CPP starting, get get factored into the monthly payment amount."Currently is shows a payment of $600 ( I am applying early for a variety of reasons and am aware of the reduction in payment by not waiting until later).


Hi Nfld'er - The answer is sortof, but not until a later date, since your 2021 earnings will not normally be known to Service Canada until your 2021 income tax return has been assessed by CRA. Once your 2021 earnings are posted to your CPP record, Service Canada will do a recalculation to see if they increase the amount of your CPP or not. The way that it actually works is that your total earnings for the whole year of 2021 will be attributed to your CPP retirement pension, unless the total earnings exceeds 6/12ths of the YMPE, in which case 6/12ths of the YMPE will be used towards your regular CPP retirement pension calculation and any excess will be used towards a PRB.


----------



## peterk

Trying to understand my wife returning to work - Part time or full time - during the CRDO 7 year period after having kids.

She made >YMPE for ~10 years prior to having children.

Let's say she make <YMPE from now on, working part time. Are all the CPP payments collected by her employer actually providing any CPP benefit at retirement while working during the qualifying CRDO period? Or are all of these years "dropped out" and her/employer contributions mean nothing until _after_ the CRDO expires when the youngest kid is >7?? I hope that's not the case...

Same question for if she makes >YMPE during the CRDO qualifying period. Any different? Surely those contributions still count for something?


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## Dogger1953

Hi peterk - Those earnings can certainly never hurt her, but whether they help her at all will depend on whether those earnings are above or below her lifetime average earnings (relative to the YMPE) whenever she applies for a CPP benefit. If they are above her lifetime average, they will stay in the calculation to increase her CPP benefit, but if they are lower than her lifetime average, they will be dropped out and in effect mean nothing.


----------



## peterk

Dogger1953 said:


> Hi peterk - Those earnings can certainly never hurt her, but whether they help her at all will depend on whether those earnings are above or below her lifetime average earnings (relative to the YMPE) whenever she applies for a CPP benefit. If they are above her lifetime average, they will stay in the calculation to increase her CPP benefit, but if they are lower than her lifetime average, they will be dropped out and in effect mean nothing.


Thanks Dogger! Sorry for the newbie questions, I wasn't understanding that right. I've done a bit more reading now too.

Sounds like the answer is "it's complicated".

So in the situation where she works for 10 years at >YMPE and then the next 30 years at a partial YMPE, it sounds like the total lifetime average will be "very close" to the CRDO years, or slightly higher.

Mainly I'm just trying to understand her "true" tax rate while going back to work. The effects of: 1) Basic personal amount transfer to spouse, 2) child care, 3) CCB clawback, 4) CPP contributions wasted - means an awfully high "tax rate" for that moderate 2nd income of hers.

Thanks!


----------



## saskstu

Question for Dogger.

Are there any benefits to Pension sharing of CPP? I'm 66 and been collecting full CPP for a few years and my wife just started collecting a partial pension this year. I'm in the 26% tax bracket while she is in the 15%.


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## Dogger1953

saskstu said:


> Question for Dogger.
> 
> Are there any benefits to Pension sharing of CPP? I'm 66 and been collecting full CPP for a few years and my wife just started collecting a partial pension this year. I'm in the 26% tax bracket while she is in the 15%.


Hi Saskstu - Yes, you might be able to save some taxes collectively if you both apply for CPP pension sharing. The actual amount that gets shared depends on how long you two have lived together during your joint contributory period, so you can't choose a dollar amount or a set percentage to share.


----------



## saskstu

Dogger1953 said:


> Hi Saskstu - Yes, you might be able to save some taxes collectively if you both apply for CPP pension sharing. The actual amount that gets shared depends on how long you two have lived together during your joint contributory period, so you can't choose a dollar amount or a set percentage to share.


Thank you. Just found the paperwork I received in 2014 when I began collecting. We’ve been together for 48 years. High school sweeties still together.


----------



## Dogger1953

saskstu said:


> Thank you. Just found the paperwork I received in 2014 when I began collecting. We’ve been together for 48 years. High school sweeties still together.


Congratulations!! It should work out to be pretty much a 50/50 split then.


----------



## crooked beat

Hi:

It was suggested I ask this question in this thread:


"When to start CPP when you retire at age 55?

Worked part time from age 16 to age 23.5. Contributed to CPP based on part time wages.
Then worked full time from age 23.5 to age 55.25. Contributed the max CPP each of those years.

There will therefore be quite a few years of non contribution before I start to collect CPP.

I am thinking delaying until absolutely necessary is still the correct procedure?"

Thank you!


----------



## Dogger1953

crooked beat said:


> Hi:
> 
> It was suggested I ask this question in this thread:
> 
> 
> "When to start CPP when you retire at age 55?
> 
> Worked part time from age 16 to age 23.5. Contributed to CPP based on part time wages.
> Then worked full time from age 23.5 to age 55.25. Contributed the max CPP each of those years.
> 
> There will therefore be quite a few years of non contribution before I start to collect CPP.
> 
> I am thinking delaying until absolutely necessary is still the correct procedure?"
> 
> Thank you!


Hi CB - You've provided almost enough info to tell you the correct date to start your CPP, but it would also be helpful to know your date of death. Seriously, without knowing that one date, it's all guesswork. My best advice is to make sure that you fully understand what your actual CPP choices are and how those numbers fit into your overall financial retirement plan. The best decision then is probably whatever feels right to you.


----------



## Kilbarry20

There were some rule changes, beginning in say 2011 under Harper. Before that and according to the CPP rules at the time, there was less incentive to waiting longer post 60 years of age. In addition, you could not collect CPP AND continue to work at the same time!

Harper changed those parameters, which turned out to be perfect for my wife & I. Neither of us, were making an outstanding salary at the time, but we were going to each be obtaining a defined and indexed pension- mine full (35 years), hers less.

I attended a course on Retirement, including a CPP & OAP presentation. For US, especially given the fact my Dad passed at 51, we wanted to extract every cent early. By my calculations at the time, I would have needed to get to 76 years of age, before that decision proved financially incorrect. I still have 6 more to go, to hit that barrier! 😂

In any case, each person needs to evaluate under the circumstances of the day, to determine what is best for him/her. You might have thought that some options- like mine, were made incorrectly at the time. Not necessarily the case, as you can see.

Here’s another example. My BIL held off getting his OAP, because it was going to get clawed back. He died at 71 this January. Ya never know.


----------



## Dogger1953

Kilbarry20 said:


> There were some rule changes, beginning in say 2011 under Harper. Before that and according to the CPP rules at the time, there was less incentive to waiting longer post 60 years of age. In addition, you could not collect CPP AND continue to work at the same time!
> 
> Harper changed those parameters, which turned out to be perfect for my wife & I. Neither of us, were making an outstanding salary at the time, but we were going to each be obtaining a defined and indexed pension- mine full (35 years), hers less.
> 
> I attended a course on Retirement, including a CPP & OAP presentation. For US, especially given the fact my Dad passed at 51, we wanted to extract every cent early. By my calculations at the time, I would have needed to get to 76 years of age, before that decision proved financially incorrect. I still have 6 more to go, to hit that barrier! 😂
> 
> In any case, each person needs to evaluate under the circumstances of the day, to determine what is best for him/her. You might have thought that some options- like mine, were made incorrectly at the time. Not necessarily the case, as you can see.
> 
> Here’s another example. My BIL held off getting his OAP, because it was going to get clawed back. He died at 71 this January. Ya never know.


Hi Kilbary - Wise words indeed! And sorry to hear about your BIL. I guess if he was in the 100% clawback threshold it wouldn't have made any difference what he did about his OAS, but if he was in something less than the 100% clawback area, he might have been further ahead if he had applied earlier.


----------



## martik777

Any news on whether Trudeau's promised 25% increase to the CPP survivors Benefit has been passed into law?


----------



## Dogger1953

martik777 said:


> Any news on whether Trudeau's promised 25% increase to the CPP survivors Benefit has been passed into law?


I understand that this increase is still in their plans, but I haven't seen anything even close to legislation yet.


----------



## couchy441

I'm a Canadian who worked in Canada most of his life. I have also worked in the U.S. for 8 years under the TN (NAFTA) work permit and paid into Social Security during that time. Since I believe I do not qualify for the minimum (10 years, 40 credits) to get the Social Security benefits, can I use those 8 years towards my CPP?


----------



## Dogger1953

No, you can't do that, but you may be able to qualify for US benefits under the Canada/USA agreement: United-States - Pensions and Benefits - Canada.ca


----------



## couchy441

Dogger1953 said:


> No, you can't do that, but you may be able to qualify for US benefits under the Canada/USA agreement: United-States - Pensions and Benefits - Canada.ca


Ok. My next question is that it appears that I don't have the 40 credits (10 years of employment) towards Social Security that would normally allow me to draw a Social Security pension, are you saying that I may still be able to draw a portion even though I fall short of that mandatory requirement because of the treaty?


----------



## Dogger1953

Yes, that is exactly the purpose of the Canada/USA social security agreement.


----------



## dl30

I have a corporation and just want to pay myself the maximum salary to claim full CPP. What is the difference between Maximum contributory earnings ($58,100) and Maximum annual pensionable earnings ($61,600)?

It looks like the difference is simply the CPP basic exemption amount - $3500.

So bottom line, to hit the max CPP contribution and no more, should I pay myself $61,600 or $58,100 in salary for 2021?


----------



## Dogger1953

Your salary should be $61,600.


----------



## BC Eddie

couchy441 said:


> Ok. My next question is that it appears that I don't have the 40 credits (10 years of employment) towards Social Security that would normally allow me to draw a Social Security pension, are you saying that I may still be able to draw a portion even though I fall short of that mandatory requirement because of the treaty?


Just as an FYI my wife and I worked in the US for just over 6 years. She acquired 28 credits and I picked up 16. She now gets about $600 CAD US Social Security a month and I get $275CAD. Of course payment amounts are also impacted by how much Social Security taxes were paid in.


----------



## newfoundlander61

I start receiving CPP this past summer ($596 is the monthly payment) and was thinking if it would be a good idea to have some tax deducted from the monthly payment. We normally get back a couple of thousand each year mainly due to charitable donations so would it make an difference in having taxes deducted per month say starting this Jan for next years. If it is advisable to do so, and is a form for this available by logging into My Service Canada and sending it electronically. Thanks for any info.


----------



## Dogger1953

newfoundlander61 said:


> I start receiving CPP this past summer ($596 is the monthly payment) and was thinking if it would be a good idea to have some tax deducted from the monthly payment. We normally get back a couple of thousand each year mainly due to charitable donations so would it make an difference in having taxes deducted per month say starting this Jan for next years. If it is advisable to do so, and is a form for this available by logging into My Service Canada and sending it electronically. Thanks for any info.


I have no particular expertise with the question that you're asking, but if you're currently receiving a refund each year I wonder why you might want to have any additional taxes deducted and thereby possibly increase your refund. If you do decide that's what you want to do though, you should be able to do so online at your My Service Canada Account.


----------



## Plugging Along

newfoundlander61 said:


> I start receiving CPP this past summer ($596 is the monthly payment) and was thinking if it would be a good idea to have some tax deducted from the monthly payment. We normally get back a couple of thousand each year mainly due to charitable donations so would it make an difference in having taxes deducted per month say starting this Jan for next years. If it is advisable to do so, and is a form for this available by logging into My Service Canada and sending it electronically. Thanks for any info.


From strictly a financial standpoint, you the pay the least amount of taxes possible during the year, and have to PAY when you file. Reason being is you get to keep that money for you until the very end. However, this assumes that you manage your finances well, and a larger tax bill at tax season is easy for you to cover. 

Psychologically it always feels better to get the money back on the returns (I prefer it), but i have to remember that it was my money I lent the government interest free.

Just pay what CRA sets up for your tax installments. Don't increase them.


----------



## Retiredguy

Looking to confirm my own thoughts and potential advice I would give.

Situation. A 60 yr old man working FT earning near minimum wage.... about 16 hr. He is single and does not own any real estate so rents month to month. I don't know for sure but believe he does not have any other assets. Earlier in his life he tells me for many years (30 +) he owned his own business as a contractor to the cruise industry and did OK. I asked him if he paid into CPP and he replied that his accountant always made sure he did The work he did was eventually taken "in house" and he also suffered some health issues which combined has landed him in the situation he is now. 

Given his situation I'm thinking that GIS is very likely on the horizon at 65 therefore he should start his age 60 reduced CPP now as CPP is considered income and will reduce his GIS ... and he could certainly use the extra income now.

Comments. Other considerations, agree, disagree....


----------



## Retiredguy

Plugging Along said:


> From strictly a financial standpoint, you the pay the least amount of taxes possible during the year, and have to PAY when you file. Reason being is you get to keep that money for you until the very end. However, this assumes that you manage your finances well, and a larger tax bill at tax season is easy for you to cover.
> 
> Psychologically it always feels better to get the money back on the returns (I prefer it), but i have to remember that it was my money I lent the government interest free.
> 
> Just pay what CRA sets up for your tax installments. Don't increase them.


Both my wife and I usually have to pay more at tax time but not so much that we are required to pay installments. I have a DB pension which deducts tax monthly, CPP and investment income. To try and keep up with taxes owing but not overpay I have 50% (soon to be 60%) taken off our CPP. The amount can be adjusted by logging into one's online Service Canada CPP account.


----------



## OptsyEagle

Retiredguy said:


> Looking to confirm my own thoughts and potential advice I would give.
> 
> Situation. A 60 yr old man working FT earning near minimum wage.... about 16 hr. He is single and does not own any real estate so rents month to month. I don't know for sure but believe he does not have any other assets. Earlier in his life he tells me for many years (30 +) he owned his own business as a contractor to the cruise industry and did OK. I asked him if he paid into CPP and he replied that his accountant always made sure he did The work he did was eventually taken "in house" and he also suffered some health issues which combined has landed him in the situation he is now.
> 
> Given his situation I'm thinking that GIS is very likely on the horizon at 65 therefore he should start his age 60 reduced CPP now as CPP is considered income and will reduce his GIS ... and he could certainly use the extra income now.
> 
> Comments. Other considerations, agree, disagree....


I am a little confused. You say the man is working "FT" and then you say "about 16hrs". I am assuming FT meant full time but what is the 16 hours.

The reason I ask is that is important to know what is he living on now? The bottom line is that, as you state, 50% of all the extra CPP he earns by waiting until he is older to collect is taken from him in reduced GIS. On the surface that would point a person in the direction of taking CPP now. That said, he will still earn less at 65 if he takes his CPP early then he will if he waits, even accounting for GIS reductions.

So, if he is taking money from investments to live now, which allows him to not take CPP early, then I would suggest he stop doing that and apply for early CPP right away. If he is living just fine with the income he earns and does not need the CPP, then delaying it would help out a lot when he is fully retired and not working. It kind of depends on how he is living now. Where is his money to live coming from?


----------



## Retiredguy

OptsyEagle said:


> I am a little confused. You say the man is working "FT" and then you say "about 16hrs". I am assuming FT meant full time but what is the 16 hours.
> 
> The reason I ask is that is important to know what is he living on now? The bottom line is that, as you state, 50% of all the extra CPP he earns by waiting until he is older to collect is taken from him in reduced GIS. On the surface that would point a person in the direction of taking CPP now. That said, he will still earn less at 65 if he takes his CPP early then he will if he waits, even accounting for GIS reductions.
> 
> So, if he is taking money from investments to live now, so as to not take CPP, then I would suggest he stop doing that and apply for early CPP. If he is living just fine with the income he earns and does not need the CPP, then delaying it would help out a lot when he is fully retired and not working.


About *$*16 hr


----------



## OptsyEagle

OK. So that dollar sign was an important omission.

So, is the $16 per hour covering his expenses or is he supplementing his lifestyle with saved money? The answer to that will answer the question, in my opinion. If he is OK with his earnings, then he should probably delay CPP and if he supplements it with savings, he should apply right away.


----------



## Retiredguy

OptsyEagle said:


> OK. So that dollar sign was an important omission.
> 
> So, is the $16 per hour covering his expenses or is he supplementing his lifestyle with saved money? The answer to that will answer the question, in my opinion. If he is OK with his earnings, then he should probably delay CPP and if he supplements it with savings, he should apply right away.


As indicated in my post I don't know about any other assets/ income he may have, but my presumption is none I do know he's paying 1200 a month rent, doesn't own a vehicle and uses public transport. I don't know him well. He works at a place I frequent and I've just engaged him in discussion but haven't suggested anything about starting his CPP. The sense I got was that he will wait till 65 to start it. 
Thanks for your post.


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## Dogger1953

I agree with all of the points that OE raised.


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## Retiredguy

OAS question, regarding deceased seniors who never applied for it.

At age 65 with a minimum 10 years in Canada people become entitled to OAS and I understand that if a OAS entitled person applies after age 65 that they can receive it retroactively to age 65, or the date when they became eligible, but only up to a maximum 11 months prior to the date of application.

I have read that that where a OAS entitled person dies at age, (lets say as example, age 73) and has never applied for it, that their estate can apply and receive OAS retroactively up to 11 months prior to the month of application. 

Further, I understand from reading that the amount received would be reported on a "Rights and Things" tax filing by the estate, as an amount which the deceased was entitled, but had not received as of the date of death. 

Dogger or anyone can you confirm this is correct? Has anyone here ever acted as an executor, made the application and received it retroactively?


----------



## Dogger1953

Retiredguy said:


> OAS question, regarding deceased seniors who never applied for it.
> 
> At age 65 with a minimum 10 years in Canada people become entitled to OAS and I understand that if a OAS entitled person applies after age 65 that they can receive it retroactively to age 65, or the date when they became eligible, but only up to a maximum 11 months prior to the date of application.
> 
> I have read that that where a OAS entitled person dies at age, (lets say as example, age 73) and has never applied for it, that their estate can apply and receive OAS retroactively up to 11 months prior to the month of application.
> 
> Further, I understand from reading that the amount received would be reported on a "Rights and Things" tax filing by the estate, as an amount which the deceased was entitled, but had not received as of the date of death.
> 
> Dogger or anyone can you confirm this is correct? Has anyone here ever acted as an executor, made the application and received it retroactively?


I can confirm that the Estate can indeed apply for OAS for someone that hadn't applied prior to their death. The Estate must apply within one year of death, and the application will be deemed to have been received on the date of death, thus the 11 month retroactive period would be from the date of death not necessarily the actual date of the application.

I know nothing about how this retroactive amount is reported or taxed.


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## Retiredguy

Dogger1953 said:


> I can confirm that the Estate can indeed apply for OAS for someone that hadn't applied prior to their death. The Estate must apply within one year of death, and the application will be deemed to have been received on the date of death, thus the 11 month retroactive period would be from the date of death not necessarily the actual date of the application.
> 
> I know nothing about how this retroactive amount is reported or taxed.


Thanks Dogger. Expert info as always.


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## martik777

CPP increase for 2022 is only 2.7% with inflation at 4.7% Why is the calculation not like OAS which tracks CPI in the current year?


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## Dogger1953

martik777 said:


> CPP increase for 2022 is only 2.7% with inflation at 4.7% Why is the calculation not like OAS which tracks CPI in the current year?


I don't really have an answer for the why type of questions.


----------



## OptsyEagle

martik777 said:


> CPP increase for 2022 is only 2.7% with inflation at 4.7% Why is the calculation not like OAS which tracks CPI in the current year?


Because CPP payments are not based on the current year but the average of the last 5 years. So although inflation in the last year was quite high the change of the 5 year moving averages of YMPE was considerably less.


----------



## Dogger1953

OptsyEagle said:


> Because CPP payments are not based on the current year but the average of the last 5 years. So although inflation in the last year was quite high the change of the 5 year moving averages of YMPE was considerably less.


That's not quite the answer that Martik was looking, and it's actually false. The 5-year average actually increased by a little over 3.3% from $57,780 in 2021 to $59,700 in 2022. That YMPE average only affects benefits starting in 2022 though, whereas benefits in pay in 2021 are indexed according to CPI increases, as is OAS. The difference though is that OAS is indexed four times each year whereas CPP is only indexed once each January. And the indexing is based on the 12-month average CPI ending with Oct 2021 compared to the same average ending with 2020.


----------



## OptsyEagle

Dogger1953 said:


> That's not quite the answer that Martik was looking, and it's actually false. The 5-year average actually increased by a little over 3.3% from $57,780 in 2021 to $59,700 in 2022. That YMPE average only affects benefits starting in 2022 though, whereas benefits in pay in 2021 are indexed according to CPI increases, as is OAS. The difference though is that OAS is indexed four times each year whereas CPP is only indexed once each January. And the indexing is based on the 12-month average CPI ending with Oct 2021 compared to the same average ending with 2020.


OK. Good to know.

So from what you are saying, they take the annual inflation increase for each month in 2021, when compared to the corresponding month in 2020, and then average those 12 numbers to come up with a 2.7% increase for CPP for the following year.

Is that how it works when one is collecting CPP?


----------



## Dogger1953

OptsyEagle said:


> OK. Good to know.
> 
> So from what you are saying, they take the annual inflation increase for each month in 2021, when compared to the corresponding month in 2020, and then average those 12 numbers to come up with a 2.7% increase for CPP for the following year.
> 
> Is that how it works when one is collecting CPP?


Not exactly. They don't do any type of month-to-month comparison. They average the CPI value for the 12-month period of Nov 2020 thru Oct 2021 and divide that average by the average CPI value for the 12-month period of Nov 2019 thru Oct 2020 to come up with the 2.7%. Here's a link with the formula:





Canada Pension Plan amounts and the Consumer price index - Canada.ca


Canada Pension Plan Amounts and the Consumer Price Index




www.canada.ca





And Yes, that's the way that CPP benefits are indexed after they are in pay. Before they go into pay, the earnings are indexed based on wage increases as measured by the YMPE. After they go into pay, the benefit amounts are indexed based on price increases as measured by the CPI.


----------



## OptsyEagle

Thanks for the explanation. 

Looking closer at that formula it would appear to me that the lost 2.0% that martik was concerned about would get added to the increase a pensioner will get next year, even if inflation is zero over 2022. The discrepancy he is alluding to seems to be coming from him using an inflation rate for all of 2021 (Jan to Dec), but CPP really using CPI from approximately June 2020 to May 2021, when one considers that CPP is averaging the two respective years and not going from January to December.


----------



## Dogger1953

OptsyEagle said:


> Thanks for the explanation.
> 
> Looking closer at that formula it would appear to me that the lost 2.0% that martik was concerned about would get added to the increase a pensioner will get next year, even if inflation is zero over 2022. The discrepancy he is alluding to seems to be coming from him using an inflation rate for all of 2021 (Jan to Dec), but CPP really using CPI from approximately June 2020 to May 2021, when one considers that CPP is averaging the two respective years and not going from January to December.


That's a good observation and conclusion.


----------



## peterk

With the YMPE increasing with the enhanced CPP, how are corporate and/or public pension payout calculations going to be impacted?

My pension is 1% up to YMPE and 1.6% above YMPE. Am I going to still be entitled to this based on the old YMPE system? They've been taking a P.A. based on the old YMPE, afterall.. My early pension doesn't start for 20 more years, unreduced 25 years. Nobody is even going to remember there was an old, unenhanced pension by then!


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## Dogger1953

peterk said:


> With the YMPE increasing with the enhanced CPP, how are corporate and/or public pension payout calculations going to be impacted?
> 
> My pension is 1% up to YMPE and 1.6% above YMPE. Am I going to still be entitled to this based on the old YMPE system? They've been taking a P.A. based on the old YMPE, afterall.. My early pension doesn't start for 20 more years, unreduced 25 years. Nobody is even going to remember there was an old, unenhanced pension by then!


The YMPE isn't increasing under the enhanced CPP. What they're doing is creating a new ceiling above the YMPE known as the YAMPE (Year's Additional Maximum Pensionable Earnings), so I don't see that there will be any impact on any other pensions.


----------



## peterk

Ah, excellent! Thanks Dogger that's great to know.


----------



## Dufresne

@Dogger1953 If I may ask a question please.

I'm coming up on age 58, with a plan to draw CPP retirement income at age 62.5. As a small biz owner, I've drawn salary way above YMPE since age 26. Due to changing circumstances, I have the option to collect Dividends exclusively (No further CPP contributions) or go to a mix of salary/div comp.model. How much am i giving up in CPP benefits, if I elect to draw dividends exclusively until retirement? I'd love to save the EE and ER CPP contributions going forward.
I appreciate you lending your expertise here.


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## Dogger1953

Hi Dufresne - It would cost you $90 if you want an exact calculation, but my best guess is that your CPP retirement pension will be about $100 less at age 62.5 if you don't make any further CPP contributions. That guess is probably accurate within about +/- $50.


----------



## Curl

Hi Dogger, I am asking this question on behalf of my parents. My father is turning 71 at the end of the summer while my mom will turn 59. My father contributed to at least 30 years to his CPP while my mom has contributed around 10 years. Since the beginning of the pandemic, she is currently not working.

When he turns 71, he will retire, receive his employer’s pension and continue working part-time. After his death, his employer’s pension will be transferred to my mother. My father will start requesting his CPP as he just realized he is eligible for it. However, what do you suggest my mom does? The money is currently not needed, our focus is to make sure she will be taken care of when he passes away.

1)Should she wait until the age of 70, or should she start claiming at 60 because she wont be working between 60-70?

2) Should they do pension sharing? What is the benefit?

3) Did I forget something that we should take into account?

Much appreciated.


----------



## Dogger1953

Curl said:


> Hi Dogger, I am asking this question on behalf of my parents. My father is turning 71 at the end of the summer while my mom will turn 59. My father contributed to at least 30 years to his CPP while my mom has contributed around 10 years. Since the beginning of the pandemic, she is currently not working.
> 
> When he turns 71, he will retire, receive his employer’s pension and continue working part-time. After his death, his employer’s pension will be transferred to my mother. My father will start requesting his CPP as he just realized he is eligible for it. However, what do you suggest my mom does? The money is currently not needed, our focus is to make sure she will be taken care of when he passes away.
> 
> 1)Should she wait until the age of 70, or should she start claiming at 60 because she wont be working between 60-70?
> 
> 2) Should they do pension sharing? What is the benefit?
> 
> 3) Did I forget something that we should take into account?
> 
> Much appreciated.


1) The fact that she's not going to be working between age 60 and 65 is definitely a factor that favours taking it at age 60, but it's not the only factor and shouldn't by itself be enough of a reason. Not working between age 65 and 70 doesn't mean much, because her "calculated CPP won't decrease any more during those years.

2) They can only do pension-sharing if she applies for her own CPP, so that could be another factor in favour of applying early. The only benefit is tax-savings, and this would only be the case if your father's taxable income was in a higher tax bracket than your mother's, prior to pension-sharing.

3) Life expectancy, survivor benefits, other income sources, expenses etc...


----------



## Retiredguy

This is doggers thread so I respectfully add 

You should ensure your father asks for his CPP to be retroactive to his 70th birthday. If he just realized he's eligible for it he likely doesn't know it can be retro active for up to 11 months prior to the date of application. Since, from your post it seems your parents may not be aware of certain things I'd double check that his pension continues to your mother after his death. That may well be the case but it might be at a reduced amount. 
Given the way a CPP survivor pension is calculated there may be merit to your mother not starting her CPP until age 70. If Dad dies and Mum has not started hers she will get 60% of his calculated age 65 amount. If Mum has started hers then she is guaranteed to get less than 60% of his and possibly significantly less. 

BTW - Is your Dad collecting OAS - (Old Age Security)?


----------



## Dogger1953

Retiredguy said:


> ain things I'd double check that his pension continues to





Retiredguy said:


> This is doggers thread so I respectfully add
> 
> You should ensure your father asks for his CPP to be retroactive to his 70th birthday. If he just realized he's eligible for it he likely doesn't know it can be retro active for up to 11 months prior to the date of application. Since, from your post it seems your parents may not be aware of certain things I'd double check that his pension continues to your mother after his death. That may well be the case but it might be at a reduced amount.
> Given the way a CPP survivor pension is calculated there may be merit to your mother not starting her CPP until age 70. If Dad dies and Mum has not started hers she will get 60% of his calculated age 65 amount. If Mum has started hers then she is guaranteed to get less than 60% of his and possibly significantly less.
> 
> BTW - Is your Dad collecting OAS - (Old Age Security)?


These are all very good points to add and everyone should feel free to respond. Thanks!


----------



## Curl

Dogger1953 said:


> 1) The fact that she's not going to be working between age 60 and 65 is definitely a factor that favours taking it at age 60, but it's not the only factor and shouldn't by itself be enough of a reason. Not working between age 65 and 70 doesn't mean much, because her "calculated CPP won't decrease any more during those years.
> 
> 2) They can only do pension-sharing if she applies for her own CPP, so that could be another factor in favour of applying early. The only benefit is tax-savings, and this would only be the case if your father's taxable income was in a higher tax bracket than your mother's, prior to pension-sharing.
> 
> 3) Life expectancy, survivor benefits, other income sources, expenses etc...





Retiredguy said:


> This is doggers thread so I respectfully add
> 
> You should ensure your father asks for his CPP to be retroactive to his 70th birthday. If he just realized he's eligible for it he likely doesn't know it can be retro active for up to 11 months prior to the date of application. Since, from your post it seems your parents may not be aware of certain things I'd double check that his pension continues to your mother after his death. That may well be the case but it might be at a reduced amount.
> Given the way a CPP survivor pension is calculated there may be merit to your mother not starting her CPP until age 70. If Dad dies and Mum has not started hers she will get 60% of his calculated age 65 amount. If Mum has started hers then she is guaranteed to get less than 60% of his and possibly significantly less.
> 
> BTW - Is your Dad collecting OAS - (Old Age Security)?


Thank you for both of your response.

We will definitely double check for his pension and thank you, we will ask for a retro-active for the 11 months prior.

Good to know, they will need to take both aspects into account for when she turns 60 and they will have to decide on what to do (claim at 60 for pension-sharing VS 60% of his calculated age 65 amount). His income has always been higher than hers and the accountant would income split at the time of their tax filling.

My father has not collected OAS. His income is currently around 100 000$. Should he claim it or is it more beneficial in the long run for my mother if he doesn’t collect it?


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## Retiredguy

He definitely should claim his OAS immediately. It is also retroactive up to max 11 months prior to application. He should only back date it to the month following his 70th B/day. Provided he has 40 years in Canada before age 65 he will get the max age 65 amount (if he has less years its prorated) plus 36% because he's starting it at 70 so about $870 a month. However OAS does get clawed back when income hits about 80,000 at the rate of 15% so he will have some claw back if his income is 100,000, but he will still get a lot (about 7500 yr) and as his income will likely drop when he retires the claw back amount will also drop. His OAS has nothing to do with your Mum claiming anything, but where possible income should be shifted to her to reduce his income and the clawback and to be income tax efficient. When he starts his work pension up to 50% can be split with her.

I see Dad has made 30 years of CPP contributions so they've been here a while but OAS is based on years in Canada after age 18. How many years in Canada? That info is needed to be more accurate.


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## Curl

Retiredguy said:


> He definitely should claim his OAS immediately. It is also retroactive up to max 11 months prior to application. He should only back date it to the month following his 70th B/day. Provided he has 40 years in Canada before age 65 he will get the max age 65 amount (if he has less years its prorated) plus 36% because he's starting it at 70 so about $870 a month. However OAS does get clawed back when income hits about 80,000 at the rate of 15% so he will have some claw back if his income is 100,000, but he will still get a lot (about 7500 yr) and as his income will likely drop when he retires the claw back amount will also drop. His OAS has nothing to do with your Mum claiming anything, but where possible income should be shifted to her to reduce his income and the clawback and to be income tax efficient. When he starts his work pension up to 50% can be split with her.
> 
> I see Dad has made 30 years of CPP contributions so they've been here a while but OAS is based on years in Canada after age 18. How many years in Canada? That info is needed to be more accurate.


Dad has 34 years and Mom, will have the 40 years by 65


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## Retiredguy

Curl said:


> Dad has 34 years and Mom, will have the 40 years by 65


Ok Mom at 65 with a full 40 yrs in Canada will be eligible for the full OAS. As Dad only has 34 years at 65 but has not yet claimed OAS I think that he has 2 options at this point as he's near age 71.

1). Claim 34/40 of the age 65 amount (642.25) plus 36% *or*
2). Claim 40/40 of the age 65 amount.

It appears to me that option 1 would be best however I suggest you engage dogger and pay his modest fee to determine the best option and optimal time for Dad to start OAS.

Give dogger the month and year Dad landed in Canada and his date of birth.


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## GGuy

Hi Dogger, 

I am 60 and fully retired. I worked for 33 years.

I recently spoke to a financial adviser who recommended I start collecting my CPP immediately. He said that the CPP forecasted amounts shown on My Service Canada account assumes that I will continue to work to age 65 and therefore still be contributing. So since I will actually no longer be contributing my CPP will not increase by the amounts shown. Do you agree?

My Service Canada account shows the following.

If you choose to start your CPP retirement pension:

*next month*, you could receive*$817.48* per month
*at 65*, you could receive*$1,177.93* per month
*at 70*, you could receive*$1,672.66* per month

I realise there are other factors to consider when making the decision on when to start taking CPP but to start with I'm trying to make sure I have accurate data.


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## dogger1953_5493

GGuy said:


> Hi Dogger,
> 
> I am 60 and fully retired. I worked for 33 years.
> 
> I recently spoke to a financial adviser who recommended I start collecting my CPP immediately. He said that the CPP forecasted amounts shown on My Service Canada account assumes that I will continue to work to age 65 and therefore still be contributing. So since I will actually no longer be contributing my CPP will not increase by the amounts shown. Do you agree?
> 
> My Service Canada account shows the following.
> 
> If you choose to start your CPP retirement pension:
> 
> *next month*, you could receive*$817.48* per month
> *at 65*, you could receive*$1,177.93* per month
> *at 70*, you could receive*$1,672.66* per month
> 
> I realise there are other factors to consider when making the decision on when to start taking CPP but to start with I'm trying to make sure I have accurate data.


Hi GGuy - I agree that the estimate will be too high in your situation, and your actual CPP at age 65 will be closer to $1,070 (in 2022 dollars).


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## GGuy

dogger1953_5493 said:


> Hi GGuy - I agree that the estimate will be too high in your situation, and your actual CPP at age 65 will be closer to $1,070 (in 2022 dollars).


Thanks Dogger. Appreciate your response. 

I think I'll take their advice and start CPP now.


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## james4beach

A question for @dogger1953_5493 or @Dogger1953

I'm still about 30 years away from collecting CPP. When I log into My Service Canada, there are CPP estimates, such as: If you start taking CPP at 70, you could receive $700 per month

These figures are changing as I'm still working and paying in. My question is, from the standpoint of doing my retirement planning, do these "Estimated Monthly CPP Benefits" have any meaning? Are they useful?

One interpretation might be: great, I'm looking at $700/month, *presumably inflation-adjusted into the future*, when I eventually collect CPP.

Another interpretation might be: there's too much uncertainty about CPP management and government policy, or maybe even their inflation adjustment policy. Maybe these estimates are useless for looking ahead 30 years. Could a period of high inflation, like we're having now, trim back the CPP payouts in real dollars?

I'm curious what you think. These CPP estimates are starting to look substantial, and I'm wondering if I should take them seriously and whether they will keep up with inflation. I feel like a lot can happen in 30 years, including government policy changes perhaps.


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## Dogger1953

james4beach said:


> A question for @dogger1953_5493 or @Dogger1953
> 
> I'm still about 30 years away from collecting CPP. When I log into My Service Canada, there are CPP estimates, such as: If you start taking CPP at 70, you could receive $700 per month
> 
> These figures are changing as I'm still working and paying in. My question is, from the standpoint of doing my retirement planning, do these "Estimated Monthly CPP Benefits" have any meaning? Are they useful?
> 
> One interpretation might be: great, I'm looking at $700/month, *presumably inflation-adjusted into the future*, when I eventually collect CPP.
> 
> Another interpretation might be: there's too much uncertainty about CPP management and government policy, or maybe even their inflation adjustment policy. Maybe these estimates are useless for looking ahead 30 years. Could a period of high inflation, like we're having now, trim back the CPP payouts in real dollars?
> 
> I'm curious what you think. These CPP estimates are starting to look substantial, and I'm wondering if I should take them seriously and whether they will keep up with inflation. I feel like a lot can happen in 30 years, including government policy changes perhaps.


Hi James - Unfortunately, the estimate is virtually useless for someone your age. You're correct that the actual amount will be increased based on the 5-year average YMPE ending with the year that you start receiving CPP. Because of the way that the estimate is calculated though, if you don't make any further CPP contributions that amount could decrease to as low as about $330 at age 70 (in 2022 dollars) or if you make maximum contributions until age 70 it could increase to as much as $2,350 (again in 2022 dollars but including 30 year of the enhanced CPP).


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## james4beach

Dogger1953 said:


> Hi James - Unfortunately, the estimate is virtually useless for someone your age. You're correct that the actual amount will be increased based on the 5-year average YMPE ending with the year that you start receiving CPP. Because of the way that the estimate is calculated though, if you don't make any further CPP contributions that amount could decrease to as low as about $330 at age 70 (in 2022 dollars) or if you make maximum contributions until age 70 it could increase to as much as $2,350 (again in 2022 dollars but including 30 year of the enhanced CPP).


Thanks, this is great to know. I'm disappointed to hear that there is so much uncertainty... as you say, the estimate is virtually useless at my age. That's too bad.

Can you comment on the inflation aspect, though? Does the CPP have a history of keeping up with inflation, or does high inflation work against us people who are paying into it?


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## Dogger1953

james4beach said:


> Thanks, this is great to know. I'm disappointed to hear that there is so much uncertainty... as you say, the estimate is virtually useless at my age. That's too bad.
> 
> Can you comment on the inflation aspect, though? Does the CPP have a history of keeping up with inflation, or does high inflation work against us people who are paying into it?


CPP increases for someone who hasn't started receiving their CPP yet is based on increases to the YMPE, which is indexed to the "average industrial wage in Canada". I don't know how well the AIW keeps pace with inflation.


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## james4beach

Dogger1953 said:


> CPP increases for someone who hasn't started receiving their CPP yet is based on increases to the YMPE, which is indexed to the "average industrial wage in Canada". I don't know how well the AIW keeps pace with inflation.


Thanks, I appreciate your responses and help. This is very interesting!


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## gardner

james4beach said:


> I'm disappointed to hear that there is so much uncertainty.


I realise this is an older thread now, but I just read it today.

I don't think there is much uncertainty in how the CPP system works or whether it will track inflation to a reasonable but not exact degree. The uncertainty in the predictive model is almost all about what you the CPP contributor might do between now and retirement, and though the CPP estimator doesn't have a clue, you might well.

The YMPE's you have accumulated so far are in the bag and you will get pension credit for those that you can calculate right now. Since you are a highly paid professional and as long as you stay in your career, it is likely your income is such to max out a YMPE in 4 or 5 months at most -- ie: almost any year you choose to work in will add a YMPE and the sliding scale of how much you have to earn to achieve YMPE will likely not matter for you. So you can count those YMPEs as you intend to carry on working and calculate the CPP value too.

Uncertainty might come where you might decide on a retirement pastime like working for a pub or boatbuilder or something and earn partial YMPEs down the line. But that could only raise your estimated CPP.


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## james4beach

gardner said:


> The YMPE's you have accumulated so far are in the bag and you will get pension credit for those that you can calculate right now. Since you are a highly paid professional and as long as you stay in your career,


Thanks, this is helpful info. I think I see what you mean.

I have been winding down my career, after about 25 years of work I was planning to not work so much any more. What I'm really trying to figure out is how much CPP is "in the bag" as I may not earn many CPP credits going forward. For example as I shift to more part time or occasional work, I won't be gaining CPP credits as before.

For example, if I just retired and stopped working today, how much CPP could I get in retirement? That's why I was wondering if the $700/month estimate means much.

Or does $700/month extrapolate my current trend and assume I keep earning as much as I did previously?

Question for you and @Dogger1953 ... based on that "5-year average YMPE", does this mean I can game the system by resuming work only in the final years right before I collect CPP, to boost the YMPE up? For example, don't work at all until age 65, then take a job to boost income from 65-70 perhaps?


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## Spudd

james4beach said:


> Thanks, this is helpful info. I think I see what you mean.
> 
> I have been winding down my career, after about 25 years of work I was planning to not work so much any more. What I'm really trying to figure out is how much CPP is "in the bag" as I may not earn many CPP credits going forward. For example as I shift to more part time or occasional work, I won't be gaining CPP credits as before.
> 
> For example, if I just retired and stopped working today, how much CPP could I get in retirement? That's why I was wondering if the $700/month estimate means much.
> 
> Or does $700/month extrapolate my current trend and assume I keep earning as much as I did previously?
> 
> Question for you and @Dogger1953 ... based on that "5-year average YMPE", does this mean I can game the system by resuming work only in the final years right before I collect CPP, to boost the YMPE up? For example, don't work at all until age 65, then take a job to boost income from 65-70 perhaps?


Here's a useful site that shows you how to calculate it: 
How to calculate your CPP retirement pension - Retire Happy 

The YMPE is set by the government, you working won't affect it.


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## Dogger1953

james4beach said:


> Thanks, this is helpful info. I think I see what you mean.
> 
> I have been winding down my career, after about 25 years of work I was planning to not work so much any more. What I'm really trying to figure out is how much CPP is "in the bag" as I may not earn many CPP credits going forward. For example as I shift to more part time or occasional work, I won't be gaining CPP credits as before.
> 
> For example, if I just retired and stopped working today, how much CPP could I get in retirement? That's why I was wondering if the $700/month estimate means much.
> 
> Or does $700/month extrapolate my current trend and assume I keep earning as much as I did previously?
> 
> Question for you and @Dogger1953 ... based on that "5-year average YMPE", does this mean I can game the system by resuming work only in the final years right before I collect CPP, to boost the YMPE up? For example, don't work at all until age 65, then take a job to boost income from 65-70 perhaps?


Hi j4b - You can't/don't have to "game the system", because the 5-year average YMPE that is used ends with the year that your CPP benefit starts, not the year that you last worked.


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## dubmac

Hi Dogger.
I have 2 questions. I read an article that explained that in January of each year, CPP "resets" (maybe recalibrate is a better word) the monthly amount that CPP will pay out to recipients. I have a December birthday, and I plan to begin taking CPP within 4 years. If, for example, I plan to take CPP in December 2025, does it make sense to wait until January 2026 to benefit from any monthly increase the CPP will (or may not) implement?
Also, with inflation going up (I heard 8.1% this month), does CPP adjust its payout in response to higher inflation?
Thanks


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## Dogger1953

dubmac said:


> Hi Dogger.
> I have 2 questions. I read an article that explained that in January of each year, CPP "resets" (maybe recalibrate is a better word) the monthly amount that CPP will pay out to recipients. I have a December birthday, and I plan to begin taking CPP within 4 years. If, for example, I plan to take CPP in December 2025, does it make sense to wait until January 2026 to benefit from any monthly increase the CPP will (or may not) implement?
> Also, with inflation going up (I heard 8.1% this month), does CPP adjust its payout in response to higher inflation?
> Thanks


Hi dubmac - This is a very good question, but I don't have a good answer for you yet. This is because the answer will depend on exactly what the CPI increase is for CPP purposes from 2022 to 2023 and what the 2023 YMPE is (or mare accurately, what the average YMPE is for the 5 years ending with 2023.
This is because if you wait to take your CPP until January 2023, the amount of your CPP is "indexed" according to wage increases as measured by the YMPE, whereas if you take your CPP in December 2022 it will be indexed according to price increases as measured by the CPI.
Using last year as an example, if you were eligible for the maximum base CPP of $1,203.75 in December 2021, it would have been increased by 2.7% to an amount of $1,236.25 effective January 2022 according to the CPI increase. If instead you had waited until January 2022, you would have been eligible for the maximum base CPP of $1,243.75 plus the age-adjustment increase of 0.7% for deferring one month past age 65 for a total of $1,252.46. The "breakeven" period would be about 6.2 years.
Unfortunately, the relevant CPI and YMPE numbers aren't always released in time for someone to make this decision properly in advance, but the raw data is available before then and I do my best to communicate those numbers as widely as possible.


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## dubmac

thanks dogger.
so...using last year as the example, do I conclude that it would be more advantageous to wait until January 2023 rather than December 2022?..(to the tune of around $30 more per month?)


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## Dogger1953

dubmac said:


> thanks dogger.
> so...using last year as the example, do I conclude that it would be more advantageous to wait until January 2023 rather than December 2022?..(to the tune of around $30 more per month?)


Hi dubmac - That depends. How long are you going to live?


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## Retiredguy

In the years leading up to my 65th I was monitoring the ympe and planned to wait until the January after my 65th (2019) to take advantage of the trend of the YMPE increasing faster than the CPI. As luck would have it, it didn't that year. LOL!.


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## Tayls77

Hi Dogger, I have followed this thread for the past few years and I am still confused. I am working on my drawdown strategies and when Ii start CPP figures prominently into that decision.
I am 58 but retired just after my 56th birthday. I paid Max CPP for 32 years and then 4 years when I was younger at less than full. I lived and worked in the US for a two years so paid no CPP then.
My question is because i stopped working so early, will my estimated benefit decrease each year? I had planned on waiting until I was 70 to start the benefit but I am wondering now if I should take it at 60? Thanks for all the help you have been providing.


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## Dogger1953

Tayls77 said:


> Hi Dogger, I have followed this thread for the past few years and I am still confused. I am working on my drawdown strategies and when Ii start CPP figures prominently into that decision.
> I am 58 but retired just after my 56th birthday. I paid Max CPP for 32 years and then 4 years when I was younger at less than full. I lived and worked in the US for a two years so paid no CPP then.
> My question is because i stopped working so early, will my estimated benefit decrease each year? I had planned on waiting until I was 70 to start the benefit but I am wondering now if I should take it at 60? Thanks for all the help you have been providing.


Hi Tayls - Just to clarify, the actual amount of your CPP won't decrease if you defer taking your CPP, because the increase in the age-adjustment factor for waiting will always exceed any decrease caused by the extra years of zero earnings (my larger slice of a smaller pie analogy). The amount of your actual CPP will decrease from the amount indicated on your CPP statement of contributions (SOC) and/or on the My Service Canada Account website however, because those estimates mimic what you would receive if you maintained the same average lifetime earnings right up to age 65.

If you want more accurate estimates than what Service Canada is providing by these two methods, email me at [email protected]


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## Tayls77

Dogger1953 said:


> Hi Tayls - Just to clarify, the actual amount of your CPP won't decrease if you defer taking your CPP, because the increase in the age-adjustment factor for waiting will always exceed any decrease caused by the extra years of zero earnings (my larger slice of a smaller pie analogy). The amount of your actual CPP will decrease from the amount indicated on your CPP statement of contributions (SOC) and/or on the My Service Canada Account website however, because those estimates mimic what you would receive if you maintained the same average lifetime earnings right up to age 65.
> 
> If you want more accurate estimates than what Service Canada is providing by these two methods, email me at [email protected]


Thanks Dogger, I just jumped on the link to your web site. Your rates are very reasonable. I think I will wait until I hit 59 and then send you all the up to date info and have you do the cals for me for 60-65-70. I am doing a little consulting so paying a little bit of CPP each year as a result of that, so I might as well have you do it with the total numbers. Cheers.


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## indexxx

I have a question about retiring early. My best friend hates her job, and is thinking of retiring at age 60. Her idea is to live on her resources (some inheritance, and she owns a very cheap condo in a tiny town that she will move into) until age 65, and start claiming CPP at that time. She thinks she will get full CPP for her years worked even though she retired early, meaning she will not lose the 7.2% per year. Her logic is that she is not actually starting it until age 65. Is she correct? And yes, I know she probably should just work right through, but she's unwilling to do that and does not listen to other's advice. Thank you for your answers.


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## Dogger1953

indexxx said:


> I have a question about retiring early. My best friend hates her job, and is thinking of retiring at age 60. Her idea is to live on her resources (some inheritance, and she owns a very cheap condo in a tiny town that she will move into) until age 65, and start claiming CPP at that time. She thinks she will get full CPP for her years worked even though she retired early, meaning she will not lose the 7.2% per year. Her logic is that she is not actually starting it until age 65. Is she correct? And yes, I know she probably should just work right through, but she's unwilling to do that and does not listen to other's advice. Thank you for your answers.


There are two issues at play here. The amount of your CPP retirement pension is based on your average lifetime earnings calculated at the time your CPP starts (and allowing for certain "dropout provisions") and secondly it depends on your age at that time. It's true that your friend will avoid the 36% decrease that would apply if she started receiving her CPP at age 60 (5 years at 7.2% each year), but by adding 5 years of zero earnings she may reduce her average lifetime earnings (or she may be able to drop them all out) and thereby decrease her "calculated CPP". I refer to this situation as waiting to receive a larger slice of a smaller pie. What your friend should do is to get someone to do some calculations for her, to determine what her CPP will actually be at age 60 versus age 65 (and possibly some in-between choices).


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## londoncalling

I know your question was intended for Dogger and you mentioned she is not taking the advice to stay employed. Just to clarify, has she been presented the option of working somewhere else, in a different field, with less stress? If she hates work period it is a no go and she will see a reduction in CPP. However, this can be mitigated from contributions from other employment.


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## indexxx

Thank you for the quick replies. Yes, she is counting on the fact that she will have worked 40 years without needing the last five, so she would drop those out. And londoncalling- she 'may' consider doing something else for that time period, however if she moves before 65, she would be moving to a town with almost no economy/job opportunities.


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## OldIsNotGold

I have a questions that I searched for information about yet couldn't find any clear answer, please help:

1.) My home country has Social Security Agreement with Canada and if I move there Canada will deposit my OAS and
CPP to my bank there. But if I move to a third country,
a) would it be still deposited to my account in the third country? 
b.) how it works if this third country doesn't have SS Agreement with Canada?
c.) would the tax deduction amount be the same, if not receiving any other income?
d.) some pensioners have 75-78% tax deduction, and that worries me, what percentage tax from my income of 
OAS = $500 and CPP = $500? (Approx.)

Thank you in advance


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## Dogger1953

OldIsNotGold said:


> I have a questions that I searched for information about yet couldn't find any clear answer, please help:
> 
> 1.) My home country has Social Security Agreement with Canada and if I move there Canada will deposit my OAS and
> CPP to my bank there. But if I move to a third country,
> a) would it be still deposited to my account in the third country?
> b.) how it works if this third country doesn't have SS Agreement with Canada?
> c.) would the tax deduction amount be the same, if not receiving any other income?
> d.) some pensioners have 75-78% tax deduction, and that worries me, what percentage tax from my income of
> OAS = $500 and CPP = $500? (Approx.)
> 
> Thank you in advance





OldIsNotGold said:


> I have a questions that I searched for information about yet couldn't find any clear answer, please help:
> 
> 1.) My home country has Social Security Agreement with Canada and if I move there Canada will deposit my OAS and
> CPP to my bank there. But if I move to a third country,
> a) would it be still deposited to my account in the third country?
> b.) how it works if this third country doesn't have SS Agreement with Canada?
> c.) would the tax deduction amount be the same, if not receiving any other income?
> d.) some pensioners have 75-78% tax deduction, and that worries me, what percentage tax from my income of
> OAS = $500 and CPP = $500? (Approx.)
> 
> Thank you in advance


Hi ONG - Sorry, but I have no expertise regarding direct deposit rules when you're living outside Canada or regarding taxation outside Canada.


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## Eclectic21

OldIsNotGold said:


> ... But if I move to a third country,
> a) would it be still deposited to my account in the third country?


I would think it would depend on the banking system in the third country.
If you haven't already, take a look to see if the third country is on DD participating countries list.





Direct deposit for individuals with a foreign bank account - Direct deposit - Receiver General for Canada - PSPC - Canada.ca


Direct deposit information for Canadians with a foreign bank account, including how to enrol in payments or change information on file




www.tpsgc-pwgsc.gc.ca








OldIsNotGold said:


> b.) how it works if this third country doesn't have SS Agreement with Canada?


My understanding is that the SS agreement typically helps those who because of working in another country would fall short of qualifying for one or both country's SS program as well as those who would otherwise have to pay into both country's SS program for the same income.

I don't see how the third country will have any relevance, without working in said country. I'm not an expert though. The part I have read about is losing GIS when out of country more than six months and that OAS requires twenty years of Canadian residence to be paid to a non-resident.









What Happens To Your CPP and OAS if You Retire Outside Canada?


Many Canadians are choosing to live in another country during retirement. So what happens to your government pensions if you decide to permanently…




langfordfinancial.ca






No idea on the tax front.


Cheers


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## dubmac

Interesting article here - may, however, be behind a paywall.









Thanks to a rare event, deferring CPP until age 70 may no longer always be the best option


Someone who is age 69 in 2022 and who was waiting until 70 to start his CPP, is much better off starting it this year instead




www.theglobeandmail.com





Apparently, inflation (caused by covid), without matching wage inflation, has made the decision to take CPP later less attractive. An interesting read by Vettesse.


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## Dogger1953

dubmac said:


> Interesting article here - may, however, be behind a paywall.
> 
> 
> 
> 
> 
> 
> 
> 
> 
> Thanks to a rare event, deferring CPP until age 70 may no longer always be the best option
> 
> 
> Someone who is age 69 in 2022 and who was waiting until 70 to start his CPP, is much better off starting it this year instead
> 
> 
> 
> 
> www.theglobeandmail.com
> 
> 
> 
> 
> 
> Apparently, inflation (caused by covid), without matching wage inflation, has made the decision to take CPP later less attractive. An interesting read by Vettesse.


Hi Dubmac - I would prefer to wait until the actual CPI and YMPE values are known before taking any action, but I suspect that the article is fairly accurate.


----------

