What the average Canadian can expect to receive in benefits and what they'll pay in taxes at 65.
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- Опубликовано: 18 сен 2024
- Kent breaks down what the average Canadian can expect to receive from all sources of income and what they'll pay in taxes when they retire at 65. How much CPP? How much OAS? What has the average Canadian saved in their RRSP? TFSA?
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Maxing out TFSA instead of RRSP as income will be higher later then now. Wish TFSA was around when I was 18.
Another benefit of maxing out TFSA asap is that the interest can compound tax free for decades. Then you can contribute more to your RRSP
Why not do both
@@ronkennedy213depends on income really. If you’re not a high income earner,the TFSA is the best way to go. However,if you’re giving 50% of a chunk of your income to cra,then rsp should come first. And then there’s all the people who are up to their eyeballs in debt…that’s another issue altogether.
@@derekcox6531totally agree, high income fund RRSP first.
Because I invested well (or OK), the OAS is clawed back. Next year when I start collecting about 27 thousand in my RIF, and will be making about 130 thousand.....no OAS. Yea wish TFSA was a was around earlier.
I really appreciate your content. Lots of great information with amazing learning opportunities. Your channel is helping a lot of Canadians.
@@rudykatwaroo8260 thanks Rudy
Excellent review! Clear and consise.
Thank you. Great information.
@@brickman_ you’re welcome. Thanks for the comment
Thanks, Kent, good to see that Canadians can get by on relatively modest investments. May even be able to finagle some GIS if they can appear to have lower income in some years. Also, load up those TFSAs, they are a good instrument.
Good stuff!
The government really needs to make some adjustments for single retirees.
@@jovicrazed yeah, they do.
We’re starting to work with a group that focuses on that issue, so we’ll keep pushing for change
That was great info Kent. I still would like to see the breakdown for singles as some of us only have half of assets relating to your example. And seniors that are single and now retiring, get more less of these figures.
@@markust8904 I’m sorry, I don’t really understand what you’re asking for? You just want to see a single person who has less money?
This person and the situation presented was for a single average person according to the numbers presented in the video.
Kent did make a comment about a couple having double that amount if they were both exactly the same average people in Canada, right near the end of video but that was really the only number for a couple. The rest was all for a single person.
Kent, what investment type in retirement is allowing to pay minimum income taxes? Is index funds, stocks and bonds better to have than GICs? Thanks, great video, as always!
@@gordonpi8674 I’ll cover it soon
Can't imagine why anyone would have a 31k TFSA and 159k NR at age 65. Why isn't their TFSA max'd to 95k?
My question as well. Maybe they want to give money to grandkids, buy an RV and a boat, help kids with a house?
Same numbers, but tweeked to a life expectancy of 90 :)
@@johnnyv5995 yeah, I can maybe redo it for 85, 90 and 95. I need to fix the taxes too as they’re a bit higher than they should be.
Just to add. Average of 83 includes deaths of young people. The older you get,(for example 65) the stats to live to be 90 or older increase sharply
@@jimclarence5441 I think the odds at age 65 that you can reach 90 are about 1 in 6. None of my close relatives made it to 90, so I don't think I should be planning for that. As he said, the worst case if you run out of savings is you will still have CPP+OAS+GIS
@@tudvalstone Just my luck, I'm condemned to a long life as my parents lived to be 95 and 100. My ggg grandfather fathered three children starting at the age of 68. I should be fine, and if nothing else i own my house, so that's should be some money. too.
The audio sounds like when I call a friend and he or she answers their phone while on the toilet. Otherwise, informative video. 👍🇨🇦
Good vid thanks, but please can you use a directional microphone or a better one..lol I found it hard to hear..sorry
@@DcArmy9015 yeah, we’ve got to order a new mic
I get a withdrawal of ~10,500/yr from a 129k RRSP from 65 to 83 (18 yrs) before depletion (using nper function). How are you calculating this? 4.5-2.1= 2.4% not 2.6%
Here is one to think about ... DO NOT GET HURT ON THE JOB your long turn WCB gets cut badly because oooo your retired at 65 thus we will give you a working wage? Rightttttt.
YOUR CPP gets cut more than half because you have not worked for the last five years.
We should move to another Country .. then come back in as a refugee ... you will get more.
You have to base life expectancy from current age NOT birth.
@@robertross8565 yeah, you’re right.
Hey Kent - I'd love a breakdown of how CPP is calculated when someone retires early. Assume average contributions age 18-20 and MAX contributions 21-52 then retired at 52. Is it that the 8 worst years are removed? If someone collects at 60, then age 53-60 are the 8 worst, but if someone waits until 65, are there 13 "worst years" (5 extra at $0), or defers to 70, are there now 18 "worst years" (10 extra at $0) - Do all those extra $0 years affect the calculation?
CPP General dropout provision allows for 17% dropout of total contributory months. So you only will get to 8 years general dropout if you don't start CPP till age 65. Age 65 - 18 = 47 years or 564 contributory months * 17% = 96 months dropout.
You'll need 39 years with max contributions to qualify for max CPP assuming you don't have any other earnings dropout periods (like child rearing dropout or CPP disability etc).
All this information is available on the government of Canada website or you could discuss your specific situation with Doug Runchey @ DR pensions who can do specific calculations for your specific circumstances.
All time after the age of 18 to when you start drawing CPP or age 65 may impact the amount of benefit you'll receive.
Go on the CRA website and it will tell you exactly what you would get.
@@oldpostie problem being the age 52 statement of contributions and Earnings assumes you'll continue at current rates therefore it will not be overly accurate for someone at that age. A lot closer when you turn 60 but still could estimate high depending upon your earning patterns throughout your working lifetime versus current earnings.
I'd like to know this too. I'm in the same boat and wonder if I should be starting it earlier because I will have way over 8 yrs of zeros. Is it still better to delay until later, if delaying puts more zero years of contribution into the calculation? I printed some pages out to do the calculation manually, but haven't gotten around to it yet.
@@DL-bl6qp there are a number of videos out there that go over additional zero dollar years from a CPP perspective. They generally all prove out that you will always get a higher CPP lifetime benefit amount if you live to life expectancy by taking your CPP later (ie 70). As mentioned you can have Doug Runchey (a retired CPP OAS specialist) at drpensions calculate your specific scenario using your number for a small fee.
What about GIS? Also, a paid off home can help out.
@@bskinny9009 this particular person wouldn’t get GIS. Yes, being mortgage free is extremely helpful for a number of reasons.
@@K4Financial I'm wondering if one would qualify for GIS if they had a paid off home but are low income.
@@bskinny9009 probably. Depends on how low the income is.
@@K4Financial The government website says you qualify if your 65 and receiving less than $21k in CPP and OAS
Hey Kent. With regard to the non-reg income (or really cashflow in this case), did you apply the 15% tax on the entire annual “income” or just on the growth portion?
@@gameguy7205 oh, you’re right I think. I may have done it on the entire income, so the tax on that would be much lower. My mistake
I think there is a $2000 amount for something? Pensions maybe?
@@kjair1431 I discussed it near the end
Wonder why that person did not move their investments into Tfsa?
@@patassion it doesn’t specify what the other assets are, so it could potentially be real estate or something else that can’t be moved into a TFSA. Also, very few people max out their TFSAs because they just don’t get around to doing it, even though they can.
Is there anything the government is willing to do to support retiring singles? Living is already more expensive as a single and to enter retirement still having to pay more sucks.
@@oldpostie there are no proposals that I know of, but we’ll keep talking about it and if enough people help to share our messages, it will happen.
@@K4FinancialI’m not holding my breath.
There is a basic personal amount worth at least $15000
@@kjair1431 it’s already pre calculated in my scenario
That basic exemption will be baked into the average tax rate used in this scenario. You know that because there is no actual tax rate in Canada anywhere where the combined Fed and Prov rate is 9% or 6% after further tax credits.
@@DoneByD My apologies, of course you are right.
If you own your home, consider a reverse mortgage. If you don't own your home, consider working a few more years. Even in a small town, rent and utilities will take a huge bite out of that budget!
The interest people pay on reverse mortgages is absolutely obscene. My dad had one on his house. He died,the company moved in a few weeks later,threw everything from the house,into a dumpster and sold the house for whatever they could get for it. I don’t personally care that they did that because I had no dog in the fight,but reverse mortgages exist to make reverse mortgage companies more rich. Full stop.
So many more negatives than positives. That is an absolute no from me.