# Max CPP for Widows?



## RedRose

Does anyone know what the maxium CPP income one can receive if widowed?
I receive approx $500 a month right now from my deceased husbands CPP
I was wondering if it is worth to continue contributing to my CPP, or if I should start to take mine if they will allow combining them both.
I thought someone once said the max I could receive is $11K a year.
I could not find a combined CPP on the Rev Can website, low tech gal here.:biggrin:

Thanks in advance for any replies.


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## Spudd

http://www.servicecanada.gc.ca/eng/isp/cpp/survivor.shtml#cpp

•The most that can be paid to a person who is eligible for the CPP retirement pension and the CPP survivor's pension is the maximum retirement pension (which is more than the maximum survivor's pension by itself).

http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/rates.shtml - this page shows the maxium payable is $986.67/mo.


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## RedRose

Oh Thank YOU Spudd for your prompt reply.
I can now figure out how long I need to contribute to reach the maximum with the combined CPP.
Thank you again,


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## Karen

> •The most that can be paid to a person who is eligible for the CPP retirement pension and the CPP survivor's pension is the maximum retirement pension (which is more than the maximum survivor's pension by itself).
> •The total amount of combined CPP benefits paid is adjusted based on the survivor's age and other benefits received.


Note that, while the above quoted information from the Service Canada is obviously correct, that doesn't neccessarily mean that you will receive the amount you currently receive as a survivor benefit plus your own entitlement up to the maximum amount of the CPP benefit. When my husband died in 2003, I was still working, and I received a monthly survivor's benefit of $$320.01. When I took early retirement at 63, and started drawing my own Canada Pension, my surivor's benefit dropped to $194.02, and then when I turned 65 the survivor's benefit dropped to grand sum of $28.38, even though those reductions still left me slightly below the maximum CPP. I have no idea why - I don't object to it; I just was curious why. So I phoned Service Canada and asked for an explanation and was told that the formula they used was too complicated to explain! I phoned a second time and was told much the same thing.

I should have followed up on it but, because I was receiving only slightly below the maximum, I didn't bother.


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## MoneyGal

It IS complicated. The formulas are set out here, in the responses to questions 5 and 20: http://www.servicecanada.gc.ca/eng/isp/cpp/survivor.shtml#receive


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## RedRose

Thank you *MG* for the answers again. You are so patient providing great information.

*Karen,* I had heard something simliar from another widow that is why I was curious if I should keep contributing to my CPP.
I guess if I continue working I have to, but if I retired early I guess I would get a large CPP until 65 when the survivor's pension is reduced.

It sure is a struggle to figure out an income stream into retirement.


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## fraser

My understanding is that for some people, these rules are one of the reasons to take CPP early.


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## KiraFG

I'm in a similar position as Karen. I was on CPP Survivor pension and then when I turned 62, started to collect my own as well.

Karen, when you turned 65, did your total CPP amount go down or did they just adjust the proportion of what was the survivor portion and what was your own, with the total remaining the same?


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## KiraFG

I forgot to mention, my total CPP cheque (both survivor's and my own) is under the maximum.


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## Karen

Kira, I've been looking up my records to try to answer your question, but it's kind of confusing because the amounts change every year with the cost of living increase. But these are the amounts given in three letters I had from Service Canada:

January 2004 (following my husband's death): Surivor's pension only - $320.01 
August 2006 (when I retired and started receiving my own CPP): My pension - $737.69; Survivor's pension - $194.02 for a total of $931.71
May 2008 (when I turned 65): My pension - $795.92; Survivor's pension: $28.38 for a total of $824.30

So my total pension did go down by a little more than $100 and the reduction was in the survivor's benefit, but it's doesn't appear to be that straightforward. That's when I asked for the formula and was told it was too complicated. Is this more or less what happened to you too?

To complicate things further, a strange thing happened just a few weeks ago. I received two letters from Service Canada, one addressed to me as the executor of my late husband's estate and the other addressed to me personally. The purpose of both letters was to say that in a periodic review of their original calculations, they had discovered an error in the amount of CPP my husband had been receiving while he was alive and therefore they owed his estate about $3,421 and that my survivor's benefit had been based on his incorrect pension so they owed me about $1,182. My husband died in 2003; these refunds happened in 2012 - I couldn't believe it!


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## KiraFG

Karen, your situation sure is confusing. I wonder what the benefit amounts would have been if they had figured them correctly from the beginning.

I'm not 65 yet so am wondering, like RedRose, what will happen. I had heard that at 65 they recalculate and see from CPP's website that the way the survivor's portion is calculated no longer is based on a flat rate plus percentage but just on a percentage.

You got me curious enough that I called CPP and spoke to someone who did a lot of typing in the background and came up with an estimate for me. Apparently my own CPP will go up when I turn 65 and my survivor's portion will go down but overall my benefit will increase. I don't know why my own benefit would go up (not considering any cost-of-living increases) but this is good news. I thought that once you choose to take CPP early (in my case, at 60), that your benefit is permanently reduced. Maybe this isn't the case. I'll be receiving an estimate letter in a week or so.


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## Karen

I've wondered the same thing, Kira - what would have happened if the benefits had been calculated correctly when my husband first started getting his CPP. I guess I'll never know. I also have no idea why yours will go up and mine went down at 65. I see what they mean about it's being complicated!

By the way, the extra spouses's pension I received this year only applied to the years after my husband died until I retired and started taking my own pension. It did not affect my current pension.


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## KiraFG

I've been thinking about the discussion I had with the CPP lady and did some more research. It doesn't seem correct that my own CPP that I started taking at 60 with a 30% reduction would go up by over $100 when I turn 65. I found several places that seem to indicate that the reduction for taking CPP early is a permanent reduction. I think that the numbers she gave me were for if I were just starting my own CPP at 65.

The survivor's portion, however, IS recalculated. While the survivor is under 65 it's calculated as a flat amount (which changes every year, for 2012 it's $173.82) plus 37.5% of what the deceased spouse would have gotten at 65. Once the survivor turns 65 it's calculated as a straight 60% of what the deceased spouse would have gotten at 65. 

I expect that my total combined benefit will decrease when I turn 65 in three years by approximately $50.


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## Karen

Well you got more information from them than I did. You didn't say how far away from being 65, but if it's quite soon, please let us know how it turns out.


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## KiraFG

I won't turn 65 until December 2014. I'll bookmark this thread and come back in early 2015 to post an update.


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## Karen

Thanks!


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## RedRose

I will turn 65yrs December 2013

I called service Canada this is what I was told:

(I receive $503 survivors pension right now)

If I apply now to start in June 2012 with the combo of CPP, $371 survivors pension and my CPP $392 = $764

If I wait until age 65yrs, $358 and $420 = $779

I think I am better to continue receiving the $503 until I am 65 right and build my CPP
What do you number crunchers think?
I see stars with all this stuff.


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## KiraFG

Rose, It sounds from your previous post that you are still working and contributing to CPP. In my case I wasn't working in Canada when I turned 60 and I would have lost money if I had waited to 65 because five more years of zero contributions would have lowered the amount of my own CPP at 65 vs 60 and therefore, my total would have been less.

If it were me I would start in June 2012. Here's why. **Disclaimer - I'm not a professional, this is just based on what I've figured out.

The difference between $503 and $764 for 19 months is $4959. If you start in June 2012, in December 2013 you will have collected an extra $4959.
The difference between $764 and $779 is $15. 4959 divided by 15 is 330.
It would take 330 months or 27 years to reach the point where waiting until December 2013 will get you more than starting in June 2012. You'll be 92 years old before waiting would have been better.

There's another factor - the cost of living increase. Last year it was 2.8%. You'll get the same increase percentage no matter when you start, but the actual increase amount would be a bit more if it's based on a higher number to start. On a $15 difference it won't amount to much. $15 times 12 is $180 a year, times 2.8% is $5.04.

And a further factor is the potential income tax on a higher amount of income. Your income would be up by $1827 in 2012 and by around $3200 in 2013. Will this be significant?

I think all things considered you would come out better to start now. Please get other peoples' opinions - as I said before, I'm not a professional at this and I certainly could be overlooking something.


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## KiraFG

Rose, have you decided yet when to take your own CPP?


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## RedRose

*Thank you KiraFG* for following up. Yes, I did apply online so all is in now for May so I guess I will be hearing from them in due time.

Thank you for your clear thinking on this one. I was wowed with your calculations and started to take action right away.
Thanks again,

Rose


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## KiraFG

Glad I was able to help.


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## RedRose

I finally got my first CPP cheque deposited yesterday. They did a recalculation and it comes to $744.47
So I am happy to be a kept woman. LOL!
I am still working very part time and will be contributing a little I guess until I retire, which could be beyond 65.

I am now trying to focus on some DIY investing with TDW. I have a lump sum sitting in a savings account making 1.25% right now. I want to buy some dividend paying stocks and such. I am reading Money Sense right now. I also read Money Gal's book Nest Egg. I thought mostly Banks, some energy and maybe a potash. Learning as I go.

Thank you again for your calculations on this complex CPP query, now it is all settled with a clearer mind than mine.
Cheers!

Rose


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## KiraFG

Good news! I think you made the right decision both mathematically and based on the bird in the hand rules.


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## KiraFG

Well, it's February of 2015 now. I received my first recalculated CPP payment last week and as I promised, am reporting back.

I turned 65 in December of 2014 so the new calculation took effect as of the end of January 2015.

CPP had estimated that it would be $611 for my own and $258.04 survivor's for a total of $869.98.

Dogger's estimate was $592.30 for my own and $290.47 for survivor's for a total of $882.77

What I actually got was $628.44 for my own and $265.05 for survivor's for a total of $893.49. 

I was getting $961.89 in 2014, so I am now getting $68.40 less. Offsetting this, I now get OAS as well - 37/40 of the full amount because of when I moved to the U.S.

The money (converted to U.S. dollars) arrives in my U.S. bank account on the third to last day of the month as two separate deposits, one for CPP and the other for OAS.

I am pleased. Not rich, but pleased.


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## PrairieGal

That was good of you to come back and report, Kira. I don't understand why they reduce the Survivor's Pension at age 65. I guess maybe it is because of OAS, as you mentioned, but the two things are separate. 

Has anyone ever collected the Allowance for the Survivor (age 60-64)?

I get a Survivor's CPP pension now of $415. My husband worked right up until he died at age 64, and never collected any CPP. Seems to me that leaves a lot of money on the table, and CPP is benefitting. Anyway, I guess those are the rules. 

I have a few years to go until I reach age 60, so I still have time to figure this all out. It sure is complicated.


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## Dogger1953

PrairieGal said:


> That was good of you to come back and report, Kira. I don't understand why they reduce the Survivor's Pension at age 65. I guess maybe it is because of OAS, as you mentioned, but the two things are separate.
> 
> Has anyone ever collected the Allowance for the Survivor (age 60-64)?
> 
> I get a Survivor's CPP pension now of $415. My husband worked right up until he died at age 64, and never collected any CPP. Seems to me that leaves a lot of money on the table, and CPP is benefitting. Anyway, I guess those are the rules.
> 
> I have a few years to go until I reach age 60, so I still have time to figure this all out. It sure is complicated.


PrairieGal - They don't necessarily reduce your CPP survivor's pension at age 65, but it is always recalculated then. Under age 65, the survivor's pension is 37.5% of your husband's "calculated retirement pension" plus a flat-rate benefit ($181.75 for 2015). At age 65, the percentage increases to 60%, but you lose the flat-rate portion. For you this conversion would make the over-65 survivor's pension approx. $373.20. Unfortunately, this is where the complexity starts due to the "combined benefit rules" which will reduce this amount even further if you're also receiving your own CPP retirement pension.

Here's a link to an article that I wrote that you might find useful: http://retirehappy.ca/cpp-survivor-benefits/


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## Hpross

*Husband passed before age 60 what will I receive re CPP & OAP at 60*

Hello,
My husband passed away before turning 60 years of age, as his window (also under the age of 60) I received a lump sum death benefit and a monthly survivor benefit. I am now 57 and am planning on retiring at age 60 what will I receive from my husbands OAP & CPP?


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## Dogger1953

Hpross said:


> Hello,
> My husband passed away before turning 60 years of age, as his window (also under the age of 60) I received a lump sum death benefit and a monthly survivor benefit. I am now 57 and am planning on retiring at age 60 what will I receive from my husbands OAP & CPP?


It sounds like you're already receiving his CPP survivor's pension, but that amount will be reduced when it's combined with your own CPP retirement pension. It will also be recalculated when you turn 65. I'd need details on the amounts of your current survivor's pension and your estimated CPP retirement pension, and I'd prefer to do that offline.

You don't actually receive any of his OAS, but you could be eligible for an OAS "Allowance for a Survivor" when you turn age 60, if your annual income is under $23,256.


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