# Need help planning retirement



## Flash (Nov 25, 2014)

Hello fellow members.

I need to make some decisions and I need your help.

First, I know that as soon as you qualify for OAS (minimum 10 years of living in Canada), GIS top-ups to 1531.43 (GIS+OAS, and if OAS is lower because less than 40 years in Canada, GIS increases to reach the same amount). This is the absolute minimum if one had 0 CPP, other pension, income, etc. This starts at age 65

Now, I will have just over 20 years living in Canada at age 65.

I just received a letter from the govt telling me my retirement options. With all my income from 2019, they calculated that if I take CPP at 60 I will get $92, 65 I will get $144, 70 I will get $204.

I also just signed up for provincial pension through my employer this year, and I'm 59. The pension is a DB which means I would get 2% of my best 5 years, but since I would only work a maximum 5 more years, and I would only make about 30k a year, it's not going to be too much ($250 a month?), while contributing about 4k a year for it.

Now my dilemma is, if I'm not even close to the 1531.43 that the GIS+OAS guarantees, is there any point in contributing to the pensions anymore? Since GIS+OAS kicks in at 65, I'm thinking I should take CPP at 60 so that when I am 65, CPP will be clawed back the least (since I will only be getting $92). Also, I should start drawing my work pension at 61 (minimum 2 years requirement at age 60 required to draw), and get the meager 4% at 61, since again, at 65, this pension will be clawed back the least. ---> Doing this, I will get an extra small income from age 60 to 65, instead to keep contributing to CPP/work pension (and keep these contributions in my pocket) while will get the least amount of GIS clawed back at 50% for every dollar I would get extra.

The only real factor that would make a good decision in continuing to improve my CPP and work pension until 65 would be if I decide to retire outside of Canada. CPP/work pension and OAS would still get paid (I will have over 20 years in Canada for OAS), but not GIS, meaning having a higher CPP and work pension would help significantly.

Summary:
59 year old, still planning to work until 65
From today until age 65 I will be making approximately 30k/year - This will increase CPP from current forcasted $144, and get an extra 10% from my work pension.
Just over 20 years in Canada at age 65, means OAS is at 50% and GIS top-up is increased (at $1224.67).
Every single dollar made will clawback 50% of GIS.
Thinking taking CPP at age 60 (small amount monthly, no more CPP contributions until age 65, small amount for GIS to be clawed back starting age 65)
Thinking taking out my work pension (only 4% of best 2 years, no more 4k annual contributions until age 65, small amount for GIS to be clawed back starting age 65)
Savings of about $1000 CPP contributions + $4000 work pension contributions * 5 years = $25000 worth of contributions in my pocket before age 65.

I also have a signifcant amount of stocks that pay dividends, but before 65 when OAS+GIS starts, I'm thinking of cashing all stocks out, stop worrying about economical downturns, have a big nest egg I can draw from as needed and not have the GIS clawed back even more due to dividends/capital gains if I would cash the stocks after age 65. I will also be withdrawing all my RRSP before age 65, again to avoid any GIS claw back.

I appreciate all your inputs.


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## smihaila (Apr 6, 2009)

Hi,

I'm afraid I'm not knowledgeable enough to help addressing your questions. But I found your post interesting. Considering a person that worked in Canada for 7 years, do you happen to know what the CPP / QPP eligibility would be? (The OAS part will probably be nil.)

Thank you.


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## Flash (Nov 25, 2014)

I used the CPP calculator.




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General Information - Canada.ca







srv111.services.gc.ca





So you can do your own calculations.

Doing mine, it seems if I wait until 65 for CPP and work pension, I'll get $1681 annually in CPP and $3000 annually in work pension (10% for 5 years @ 30k/year) = 4681 annually but 2340,5 will be clawed back in GIS annually
If I take CPP at 60 and work pension at 61, I'll get $1076 annually in CPP and $1200 annually in work pension = 2276 annually but 1138 will be clawed back in GIS annually

So OAS+GIS annually of
18377.16 + 4681 - 2340.5 = 20717.66 @ 65
18377 + 2276 - 1138 = 19515 @ 60 (and 61)

Difference of 1202.66 annually BUT, I have 25000 more in my pocket (no more CPP/work pension contributions), which would put me at 20.78 years ahead!! from age 65 (I'll break even at age 85 if I retire at 65).
But I'll also get pension from 60 to 64, so 1076 + 1200 * 5 = $11380 total. This puts me another 9,46 years ahead, so break even at age 95?!?!? This is provided I cash out my stocks and RRSP before age 65 to avoid further GIS clawback.

Can someone check my math?


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## smihaila (Apr 6, 2009)

Flash said:


> I used the CPP calculator.
> 
> 
> 
> ...


Thank you so much!


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## Flash (Nov 25, 2014)

No gurus can chime in on this please?


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