For those of you that are looking to calculate what this means for you, a good and free calculator out there is themeasureofaplan.com/canadian-retirement-benefits-calculator-cpp-and-oas/
@@waynetom9022 That is the problem I have. Whenever governments control how much is handed out, it gives them too much power. Forced savings is one thing. However, I would like the option to opt out if I can put the same amount into a 'locked in' private fund. The objective is still met for society. However, it takes the power out of the government's hand.
Great video as always. I never thought (growing up poor) I'd be in the position of having to pay that second tier level of CPP - so the extra $188 a yr certainly tells me I am doing ok in life.
How out of touch is a government when 68 K in Canada is considered wealthy. Vehicle luxury tax on 100k when a mid range model pick up costs 85 thousand.
It's fine for those who can afford to pay more now but for those who are on the cusp or struggling, not so much. I'm sure this model was run through Actuaries to determine how much money this brings in compared to how many will make it to retirement.
I'd like to see a line graph comparing CPP as it exists today vs. CPP 2.0 in a projection for a couple different age categories to illustrate the impact of these changes. 1.) Maybe for someone just starting out in their early/mid-twenties vs. 2.) Someone middle-aged (~43) with 20+ years paid into CPP today (me!) Assume taking CPP at ~65, and that maximum contributions were attained from ~30-60. While some are opposed to the 'government taking more money'... I'm not at all opposed to securing more guaranteed lifetime income as I am without a defined benefit pension plan.
How will your kids feel if you die before you collect a cent of CPP? I don't think their sweet $2000 survivor's benefit cheque is going to go too far vs you saving and investing this money yourself. CPP takes enough and if you were self employed, they would take 2x plus you're paying for each of your employees. Its a GDP killer for small businesses.
@@mikekovacs8981 The death benefit is 2500 and TAXABLE. CPP is only good for those that live into their 80's. For survivors it's a cruel Joke. Imagine paying in almost 200k over a lifetime and your spouse gets nothing if she is at the max herself!
@@mikekovacs8981 You raise some important points to consider. I am in fact incorporated, so am paying as both employer and employee. I make significantly more money as a business owner than I would as an employee for someone else - and am happy paying into CPP. Investing on my own doesn't buy lifetime guaranteed income like CPP. Perhaps you can beat CPP's returns on your own. I had the same thought at one point in retirement planning. You'll need to buy an inflation adjusted annuity with your returns though, as a fair comparison for guaranteed lifetime income - and those aren't cheap. Many Canadians would squander their money though... and is the purpose for the CPP. I won't leave my children's inheritence to chance as an accidental bequest either. CPP is longevity insurance for me and my wife based on what we've contributed - for our own retirements. The children will get money while we're alive through intentional giving, and some has specifically been set aside for a desired bequest - should we both croak tomorrow. While I hope to live to collect as much of it as possible, yeah - it would suck if I didn't. I won't care though, I'll be dead. If I die early - you and all the other living Canadian citizens contributing to CPP can harvest the mortality credits generated by my death, keeping my contributions invested for future generations of Canadians. My children will be fine, and so will yours.
@@mikekovacs8981It is 2500 and Trudeau takes 600 dollars in income tax lol. You are right start saving yourself because our current gov is a financial diaster. This CPP2 jut shows how mis managed our gov civil servants have taken us for a ride
You can't even FORECAST your own CPP; no way to calculate. I didn't know what I'd get until I got it! What I'd LIKE to see is it NOT being used for entitlement, disability, or any other use: pension EARNED only.
I would like to opt out of CPP. All I ask is to be returned what I personally paid in. The MPs (and MP pensioners) can take a 10% cut in pay to assist in finding since they mismanaged the money. I will cover my own finances.
I agree…would love to opt out, take my contributions and use them to invest on my own. Would rather build up a dividend paying portfolio in TFSA and RRSP accounts…
@@roadrunner4847 Like a good number of the people who consider themselves 'savy' investors- and end up broke assed and end up being carried by the country anyway. Ayn Rand comes to mind.
Do some simple calculations first (your cpp contribution data is available on myservices canada and there are several good online cpp calculators that will provide accurate future returns when you retire). I retired in 2019 (at age 53), and the MAX contribution to CPP that I have made (since 1984 when I was 18) is approximately $50K. If I start receiving CPP when I reach 65, I'll receive all of my contributions within the first 2.5 years, and will have received over $500K (indexed at 2.5% inflation) if I live until 85 (which I plan on doing...LOL). If I live to 90, that number would be over $650K. Those numbers are even higher if I wait until 70. I suspect very few people (if any) would be able to get similar return on investment if they were able to opt out of CPP.
You explain things so well, especially to those of us (me) who are not very financially literate. So grateful that I have a very good DP benefit plan (hubby as well) when we retire in about 5 years. Your videos are still very helpful and appreciated to us 😊
I wasn't aware that CRA had anything to do with decisions on CPP. Only that it collects it through the tax system for the government body responsible for CPP. So I was puzzled that CRA would make the announcement
05:40 “Increasing the max CPP by up to 50%” is not “doubling” as you said… it means if it was $100, it will now be up to $150 (not 200$). Great video though!
I was self employed for 20 years and each year I paid DOUBLE CPP…..once for me and once for the “employer”, which was me. Done by a registered accountant
@@keng9357 I'm in the same boat as @kv7654 and can you imagine the fear in me when the pandemic closed me down! If it wasn't for CERB I'd be living in a tent down by the river!
As a high income earner I doubt I’ll notice $188 over the course of a year, but as someone who was chronically unemployed for the fist decade plus of my working life, I’ll appreciate the enhancement this brings to my benefit payment in retirement.
I’ve always earned 80-100 thousand. It was always noticeable in September when these deductions were not on my check anymore. It helped cover school fees, sports fees, etc. It takes a special person to think giving the government more of your money is going to benefit you lol.
@@F_e_l it’s $188 for the entire year, not per month, and only applies to high income earners so the person within $100 of insolvency would not be hit with this increase.
I'm OK with paying more into it until I retire in 4-6 years, but will I see an increase in benefits once I start collecting? Otherwise this is just another money grab.
Yes, those of us retiring within a few years will also realize a modest increase in our CPP benefits, based on the additional contributions. Adam discussed this at 6:45
I haven't paid into CPP since 2016 when I converted from salary to dividend income from my personal corp. I trust my decision making for my retirement over the government's. I also think that this enhanced CPP is being done because the fund needs considerably more assets to match the huge pool of people who will be turning 65 in the next decade.
This is the shit that made me retire at 55. Employment Insurance and CPP max for 38 years and will get pennies on the dollar back. I can live a little meagrely and quit supporting this sick machine.
I have a lot in Pugwash, Nova Scotia; often called the beach with the warmest water north of Carolina ! (The south to north current is between P,E. I. and N.S. splitting then to a warm current in between.) John M. Hill; (may sell).
Very interesting video. I'm close to retirement, therefore, it really won't affect me. FYI - there's no such thing as Black Friday in Canada. That's a US thing centered around their Thanksgiving geared towards people queuing up at stores very early on the Friday after Thanksgiving to shop. Retailers up here use the term "Black Friday" to suck stupid consumers into thinking they're getting a deal on rubbish they don't need.
CPP is extremely well run, you will receive your CPP fully indexed no matter what happens to your stock portfolio or a market collapse. You are misled.
Adam, are you planning to weigh in on the APP debate? I think someone with your cred would add considerable value to people’s even handed understanding. Kent did a good job on his, IMO.
The APP would be good for Alberta because believe it or not Alberta has some of the highest contributions to CPP. I believe we would get as ALbertans a better return than the current CPP which if. you look at the CPPS performance the last 10 years abysmal. Any good pension shouldn’t reside with the gov as they have shown they cant manage money.
I am a Canadian citizen but was raised in the US most of my life and I worked there many years. I moved back to Canada in 08 and worked for a few years. So my CPP is extremely low which I knew it would be. But I was under the understanding that you had to work to get CPP. In your video here you said everyone in Canada gets CPP. I know many people who have never worked for such reasons as being a stay at home Mom or health reasons, etc. How do they get CPP if they haven't worked a regular type job?
So let's say I am a 55-year-old sole proprietor with full eligibility for CPP 2.0. I have a choice to make. One the one hand, I can cough up the $188 as the employer (tax-deductible), and another $188 as the employee (tax-creditable) and receive CPP 2.0 starting at age 65. For planning purposes I want to assume I'll live until age 88. Throw in an inflation rate of 3%, a marginal tax rate of 30% for both contributions and benefits, and assume that OAS clawback will not apply. What's my after-tax internal rate of return if I elect to have CPP 2.0? I suspect it's less than 5%, but you tell me. Now I also have to consider that CPP 2.0 dies when I do, with no residual to my heirs (assuming my spouse has passed, or is still living and has max CPP). On the other hand, I could opt out of CPP 2.0. It's difficult to make an informed decision without knowing the after-tax IRR under a set of reasonable assumptions.
@@tonyoostenbrink7808 Yes, Enhanced CPP is tax deductible for the employee. This is better than a tax credit. Enhanced CPP contributions is 1% up to YMPE and 4% for the slight bit above YMPE. And people also complain about the self employed portion, but that is fully tax deductible.
After seeing cpp2 written on my paycheck last month, I watched this video to get some information on what it is. $188 looks small now, but I think I'll be worried if it goes up a lot next year.
Except you don’t receive CPP if you’re out of Canada more than half the year. Hence why snow birds only leave for the cold season and then return, instead of just staying South.
Question for you! Why does the government have their mitts on old age security? When they have nothing to do with it? It’s between employees and employers! NOT the government
I have a defined benefit pension plan. My total combined pension is determined by years of service and best 5 years. My pension decreases dollar for dollar for each dollar of CPP. Now with CPP 2 I'm paying more but wont get any more after 65 . This looks like a tax to me unless my pension contributions also go down for each dollar of CPP 2 I make. No idea if they will though.
What you're apeaking to sounds like a bridge benefit. If you've paid into CPP for over 30 years, making decent money, etc, your CPP will be much higher than that defined bridge benefit you receive.
@@Broxtyit's not the bridging benefit it's that my pension is defined by years of service and best 5 years. So if I retire at 65, with 35 years of service I get 70% of my best 5 years combined pension plus cpp. I get the same total if cpp is 1300 a month or 2600 , it's just my pension plan would have to top up less. My pension is funded 50/50 employer/employee so enhanced cpp makes defined benefits cheaper so contributions should go down. I need to ensure that they are but I've noticed bigger deductions last few years. CPP is designed to replace 25% of YMPE, I'll be getting 70% of my best 5 years which will be over YMPE so my work pension will be much bigger than max CPP.
Your bridge is until 65 then your defined goes down but oas and cpp kick in and keep you at the same level. So your still getting the same with the cost of living to keep up with inflation. You will get everything you put in and more if you live to 90....some people pay in there whole life and never collect more then a year ....others take much more then the ever put in ...depends on how long you live
There is no true accounting or calculations kept by individuals back 45 years ago on how much was deducted on each pay cheque. Did anybody care ? All you knew was it was deducted and had no clue you’d pay tax on those contributions when you retired. Fast forward to today, if you planned for retirement and invested in RRSP’S and made enough to actually retire and received CPP and OAS benefits and for two consecutive years owed more than $3000.00 in taxes you’d be forced to make prepayments of taxes a year in advance on CPP & OAS benefits and anticipated gains and pay previous years income tax as well. If you fail to pay your prepayment they assessed on time a 10% penalty is added. This retirement income taxation scheme is extortion and loan sharking. The CRA is now doing your taxes for you, they are judge and jury with the data they collect, why bother filing income tax, they already have everything.
Can you do an analysis on the future value of someone's life contrubutions growing at the posted ROIs from the CPP financial statements compared to that person's prospective payout from CPP?
CPP premiums go into government coffers. As government runs deficits, CPP just goes to overspending. So, this 2.0, is needed to sustain CPP payments and increase payments with inflation.
Wrong. The government has zero access CPP contributions. The increase is required to increase benefits. Pay more, get more. Thats how its worked for 60 decades now.
Best financial decision I ever made was getting off payroll and starting my own consulting business working for the company I used to be on payroll with. You can keep your RRSPs and minimal benefits, my tax savings easily cover all that and more.
It is never a good idea for government taking more money out of each paycheck. I would rather manage these myself through maximizing my RRSP and TFSA contributions throughout my working life.
Government doesn't get this money - it is administered outside of the government. Your comment would also mean you would not be entitled to the employers 100% matching money. The CPP current designed is to replace 25% of income up to YMPE and with the enhancements move to 33%. Not sure why this is a bad thing as the plan is well funded to deliver on this promise.
Great video, thank you. I just turned 65. Is it financially better for me to delay taking CPP for 1 year and continue contributing to CPP for this year as I am still working full-time? Or am I better off starting CPP now?
Retire! And enjoy your short time you have left. Seriously, how much more would you get for sticking around one more year? I woke up one morning and realized there's more days behind me than ahead of me. Why waste it working?
If you love your job enough to be okay with missing out on this money that you paid into then by all means keep working. Otherwise I’d retire and enjoy the next stage of your life. There comes a point of diminishing returns and I think 65 is that point. Of course this depends on your own financial situation.
The question is at what point do they come out and announce that while you will still have to contribute and an increased amount yearly, that there will be no new applications for the CPP? Grandfathered in. January 01 no new application accepted and a few years later no CPP at all.
Hi Adam, not fully on topic but how was CPP calculated for people who were working prior to 1966 ( commencement of plan ) For example if some worked 27 years after the inception date and retired and took CPP at sixty and paid the max. What would CPP max out at . Thanks great channel
You should receive the post-retirement benefit which is calculated the same way as CPP, on earnings between 60 and 65 "as long as you are paying into CPP and working". I just started my CPP at 60 this year, and that's how it was explained to me. The amount is also cumulative, over that five year period "assuming you retire at 65". Whatever the final amount you receive when you stop working, you will continue to receive every year thereafter. Give Service Canada a call, there pretty good for having the information or will give you the direct number to CPP to answer the question.
I invested 65 000 in a TFSA with SunLife. It is now worth $55 000 and the advisor told me I’m getting 5% interest…..he was shocked when I called them thieves. In December I will withdraw what’s left and go elsewhere for my TFSA. I understand that I can’t withdraw the money and open another one with that money in the same year. I wonder how much more they will slide out of the account . Market conditions….uh huh….
CPP is not welfare, what you get out is what you pay in, the reason that is no longer enough is that Trudeau caused a massive spike in inflation, just wait until you see what is coming next.
Thank you for a very informative video, liked that "won't affect you". I retired at age 62, not ONE regret in '10. If you own a house, 100k+ in the bank, rrsp's and a private pension also...you're set. Unfortunately, politicians and senior civil servants have built in pension gravy trains, federal...6 years service for politicians, what a farce.
I have trouble believing anything the gov says !!!!! I’ve paid into this for 50 years & I only get 360$ per month. Like what about all the interest it has accumulated?? I can’t survive on this today 2023?
If someone already has a defined benefit pension with their employer, then why would they want/need to contribute to CPP2? If I invested that $ myself, it will be there for either myself, my wife, or my kids should I pass away. With CPP2, that $ could simply be lost to the "government pool" and it will be lost to my estate. Is that correct? Any money that is not already in my grubby little hands, is not my money at all.
Great video as always , I live in Quebec therefore the QPP is relevant for me. Can you have some future videos about the QPP and some retirement scenarios ? Thank you
I haven’t paid CPP since 2019 when I went on CPP disability (1300 monthly) and that’s a joke. I can hardly wait till next year when I have to go on my pension.
I am grateful CPP exists for people such as my son, who while earning a decent income, has no discipline to save for retirement. There are lots more like him out there.
@@albundy7623 It's well funded, so not a Ponzi scheme. At least not yet. But the max that can be withdrawn as a benefit is only about $1300 per month. And that's if you've paid the maximum contributions each year. With runaway cost of living, high taxes, etc. $1300 isn't enough. The average benefit payment is about $700 per month. Can't retire on that.
Max is 188 dollars for 2024, and the proposed amount for 2025 is 388 dollars. If it keeps on doubling, it will soon reach or surpass the standard CPP contribution.
So, I just retired (2023.07.31) and I was contributing right up until then. Can you elaborate how this will affect those of us (mentioned 6:45 in video) that recently retired.
Could you redo your "is CPP a good investment" projections using the enhanced CPP contributions from today rather than from 40 years ago to see when you run out of money. I think it was age 76 from your original video.
I waited until 7:00 to find out I won't be getting any more CPP now that I'm collecting sigh. On a side note, glad I'm retiring this year as I am BOTH an employer and employee. I have enough problems with the increase of things and now more CPP contributions for the business.
I have also contributed since the 70s but because I worked 2 or 3 jobs in the earlier years and higher incomes in later years, the amount I will be receiving is closer to the maximum. It all depends on how much you put in and not just the length of time you contribute.
I hear ya brother! My wife has worked since she was 14 years old starting in the mid 70's and never stopped. The amount of CPP she can collect at 60 is PATHETIC compared to mine.
Hi I am 61 and still contributing to CCP , plan to contribute until I retire at 67 , will this new contribute help with what I will receive or will it be the same. I paid the maximum contribution for over 30 years .
If you are contributing to the higher amount over the next six years, it will positively affect your pension amount. Only those six years will see a bump. Someone starting work at 18 today and able to hit the new maximums for most of their career will see a larger total pension due to contributing more for longer.
How is this benefit down the road, with all these uncertainty I'm not confident I can collect enough pension to survive when i retire. Not that anyone retired right now is collecting enough.
CPP 2.0 is an indication the plan has failed. I hope Alberta leaves the CPP. Quebec was smart not joining CPP at the start. CPP started in 1965 so the plan has already failed for a citizen born that year not yet old enough to collect.
@@ParallelWealth Must be incorporated to pay yourself a dividend. Sole proprietors are not exempt. Must pay both parts of CPP premiums until at least 65 and then must be drawing a CPP pension to opt out (if still working).
Next payment adjustment - July to September 2024 Based on changes in the Consumer Price Index (CPI), OAS benefits will increase by 0.7% for the July to September 2024 quarter, for an increase of 2.8% over the past year, from July 2023 to July 2024. Benefit amounts for July will be published on this page at the end of June 2024.
Thanks for this great video. I have a general question. When you log into CPP and see the amount, is that the amount you will get if you continue to pay into CPP until the age of 65? I am asking because I am 62 right now. Thanks again - Albertans need to be educated more on this. It would be interesting to know if 5 years before turning 65 how this enhancement helps them.
it is not the first video on this channel, with an intro that stated that CPP "affects all canadians". I suppose all Canda EXCEPT Québec, that has its own QPP. I suppose a reference to this, or at least mentioning the exception could better inform,
You didn't cover the fact that the CPP contributions by workers today support retirees today. It doesn't go into their CPP - which would be paid by workers when the current ones retire...
"Maybe" this is a good thing for younger people as you say BUT I am not a younger person. This will not benefit me the same way. I can't speak for anyone else but I am tired of and feel like I am going broke as I continue to pay more and more to benefit others. My solitary 5 figure income simply can not keep being sliced up "for the benefit of others"
Adam, you previously did a video showing if CPP is worthwhile, which I find it very helpful. Would CPP2 be just as worthwhile - will you be doing a video on that as well?
I have contributed the maximum CPP contributions for more than 41 years and am 65 years old. Is there any reason to continue paying into CPP or should I opt out?
@@yvonneh5334 there is an exception which can be advantageous to some people. If one is already collecting CPP, but chooses to continue to work they will be eligible for the post retirement benefit. Depending on one's situation, and assuming they are in a position where they feel they must (or want to) work anyway - the PRB could be a good reason to keep contribution - very circumstantial, but one should understand if it is, or is not, a good option for them.
@@James_48 It appears that to opt out of paying CPP contributions one must be receiving CPP payments which I am not. At least that's what form CPT30 says.☹
When you are in claw back territory you are in literally in the pound seat. I don't have a pension, paid 45 years the max allowable amount into an RRSP and I am not nearly close to the claw back threshold.
The greater the CPP income in retirement the lesser the GIS amount. It's obviously a gimmick for the govt to take more money now and save money down the road.
I noticed you don't talk about early retirement at 60 . If you retired before 65, you pay a penalty of 36% in full. Then, you get an adjustment check once the 36% is taken off. Which isn't much to live on. Thank you
The earlier you retire, between 60 and 65, the less you receive monthly from the CPP. If you delay payments until after 65, you get more, which is what I did and I don’t regret it as I still work. Many others won’t or can’t work past 65. It’s a personal strategy based on health expectations and current income.
Yeah I just got a raise and was looking forward to having a bit more money (I make over the yearly max and already pay into an employer funded pension) but now I pay more and ya maybe it will enhance my retirement but this is the Canadian government we are talking about so I’m not holding out much hope.
I would assume at tax time, if there is a CPP contribution shortfall based on total income from two separate jobs, there will be a reconciliation that takes place. This is what happens with CPP today.
@@James_48 Yes, but whose going to pay for the employer's shortfall, or which employer pays for the shortfall, or will the taxpayer (employe) foot the bill for both?
@@chm5750 I believe the employee would only pay the employee portion. I assume, just like when an individual files their taxes and there is either a shortfall in CPP, or an excess in contributions there is a reconciliation. I assume something similar happens on the corporate tax side of things.
Aren't I already drawing from my CPP while drawing CPPD? I was told that my CPPD will automatically convert to CPP at age 65, so if I want to defer until age 70, I still can?
CPP IS under funded , that's why they don't want Alberta leaving it , no money to pay out hence the increase and reluctance to show the actual fund numbers as well as coming back with what they think Alberta is entitled to when we pull out . By coming back with their numbers alone would open the door for us to leave which they obviously can not afford to have happen for the aforementioned reasons.
just hit 60 and wont take my cpp till 65, for reasons. if i die prior to collecting will my wife who is 7 years younger than me get the credit in cpp that i have accumulated? or a benefit she can collect as a survivor?
Anybody who invests usually has a diverse portfolio not all eggs into 1 basket ? I think the govt. would do much better by making the cpp a choice/voluntary. Its not right that both a worker and his employer be forced to invest x-amount of their earnings into a retirement plan they don’t like ? At the very least allow the employee to invest his 1/2 into whatever he feels is the best way while the employer must pay the cpp. Then the employee could have a second back up plan to counter any issues with the cpp in the future.
Even if you have all debt paid off before retirement the CCP is not enough to retire on. Many individuals who retired have taken on jobs to supplement their pension.
I wish they would take tax on the CPP portion while you’re working, tax entire gross income, so we don’t pay tax when we receive it. We need every penny once collecting CPP.
I paid the max for 24 of my 44 years working ! As ironworker rigger fitter welder connector ! Hugh overtime ! ALMOST ALL DISAPEARED , , DUE TO GOVERMENT CLAW BACKS AND GIVING MY X 100% for life ,,,,, she left nine months after i signed , was not allowed to change . But I swear ill outlive her , shes 5.5 years older! Until i die she gets nothing !now 75!
Any time the government takes your money, its bad. There's always naysayers, but I was taught to look after myself and my family. If those contributions were made and invested over the long term like I was taught, and passed to my children, then you don't need the government. Why is it everyone wants the government to look after them, or have greater government dependency ? For those that haven't planned, its not those who have planned problem. Plus, if our taxes were lower, and people had much more money leftover, they could further invest in themselves. But it seems in Canada, most are too encapsulated to keep up with the jones's no matter the debt burden.
Please help !!! This year in January I will be depositing $30,000 into my RRSP I have never done any investing. I am thinking of doing this with my bank at CIBC. Is this the right decision and should I be investing in stocks? Thanks
@@donnakemper3333 hi thanks for that info Like I said, I am very new to this. How would that work as I don’t live in Bc I see they have there offices there
For those of you that are looking to calculate what this means for you, a good and free calculator out there is themeasureofaplan.com/canadian-retirement-benefits-calculator-cpp-and-oas/
Employers and Employees pay for C.P.P. but sometimes Politicians try to say it is a Benifit, it is not financed by the government.
Ya..but the problem is the government controls when and how we get the money back..LOL!
@@waynetom9022 That is the problem I have. Whenever governments control how much is handed out, it gives them too much power. Forced savings is one thing. However, I would like the option to opt out if I can put the same amount into a 'locked in' private fund. The objective is still met for society. However, it takes the power out of the government's hand.
Old age pension is a government gift , Not CPP!
but it is spent by the government and if people cant see that the money is gone with this new CPP2 i dont know what else to say
An investment advisor said CPP should be paying 2-3X what we recieve now, properly managed.
Great video as always. I never thought (growing up poor) I'd be in the position of having to pay that second tier level of CPP - so the extra $188 a yr certainly tells me I am doing ok in life.
You don't seem to mind big brothers overreach?
How out of touch is a government when 68 K in Canada is considered wealthy. Vehicle luxury tax on 100k when a mid range model pick up costs 85 thousand.
Ya, no kidding!
$68K is the new middle class, if you're that lucky.
Mid range at $85k… who’s out of touch?
It's fine for those who can afford to pay more now but for those who are on the cusp or struggling, not so much. I'm sure this model was run through Actuaries to determine how much money this brings in compared to how many will make it to retirement.
I'd like to see a line graph comparing CPP as it exists today vs. CPP 2.0 in a projection for a couple different age categories to illustrate the impact of these changes.
1.) Maybe for someone just starting out in their early/mid-twenties vs.
2.) Someone middle-aged (~43) with 20+ years paid into CPP today (me!)
Assume taking CPP at ~65, and that maximum contributions were attained from ~30-60.
While some are opposed to the 'government taking more money'... I'm not at all opposed to securing more guaranteed lifetime income as I am without a defined benefit pension plan.
How will your kids feel if you die before you collect a cent of CPP? I don't think their sweet $2000 survivor's benefit cheque is going to go too far vs you saving and investing this money yourself.
CPP takes enough and if you were self employed, they would take 2x plus you're paying for each of your employees. Its a GDP killer for small businesses.
@@mikekovacs8981 The death benefit is 2500 and TAXABLE. CPP is only good for those that live into their 80's. For survivors it's a cruel Joke. Imagine paying in almost 200k over a lifetime and your spouse gets nothing if she is at the max herself!
@@mikekovacs8981 You raise some important points to consider.
I am in fact incorporated, so am paying as both employer and employee. I make significantly more money as a business owner than I would as an employee for someone else - and am happy paying into CPP. Investing on my own doesn't buy lifetime guaranteed income like CPP.
Perhaps you can beat CPP's returns on your own. I had the same thought at one point in retirement planning. You'll need to buy an inflation adjusted annuity with your returns though, as a fair comparison for guaranteed lifetime income - and those aren't cheap. Many Canadians would squander their money though... and is the purpose for the CPP.
I won't leave my children's inheritence to chance as an accidental bequest either. CPP is longevity insurance for me and my wife based on what we've contributed - for our own retirements. The children will get money while we're alive through intentional giving, and some has specifically been set aside for a desired bequest - should we both croak tomorrow. While I hope to live to collect as much of it as possible, yeah - it would suck if I didn't. I won't care though, I'll be dead. If I die early - you and all the other living Canadian citizens contributing to CPP can harvest the mortality credits generated by my death, keeping my contributions invested for future generations of Canadians. My children will be fine, and so will yours.
@@mikekovacs8981It is 2500 and Trudeau takes 600 dollars in income tax lol. You are right start saving yourself because our current gov is a financial diaster. This CPP2 jut shows how mis managed our gov civil servants have taken us for a ride
You can't even FORECAST your own CPP; no way to calculate. I didn't know what I'd get until I got it! What I'd LIKE to see is it NOT being used for entitlement, disability, or any other use: pension EARNED only.
I would like to opt out of CPP. All I ask is to be returned what I personally paid in.
The MPs (and MP pensioners) can take a 10% cut in pay to assist in finding since they mismanaged the money.
I will cover my own finances.
I agree…would love to opt out, take my contributions and use them to invest on my own. Would rather build up a dividend paying portfolio in TFSA and RRSP accounts…
It isn’t just about you it’s for those who have no way to save because of their life struggles and helps them at retirement
@@roadrunner4847 Like a good number of the people who consider themselves 'savy' investors- and end up broke assed and end up being carried by the country anyway. Ayn Rand comes to mind.
Doubt it’s much lol 😂
Do some simple calculations first (your cpp contribution data is available on myservices canada and there are several good online cpp calculators that will provide accurate future returns when you retire). I retired in 2019 (at age 53), and the MAX contribution to CPP that I have made (since 1984 when I was 18) is approximately $50K. If I start receiving CPP when I reach 65, I'll receive all of my contributions within the first 2.5 years, and will have received over $500K (indexed at 2.5% inflation) if I live until 85 (which I plan on doing...LOL). If I live to 90, that number would be over $650K. Those numbers are even higher if I wait until 70. I suspect very few people (if any) would be able to get similar return on investment if they were able to opt out of CPP.
You explain things so well, especially to those of us (me) who are not very financially literate. So grateful that I have a very good DP benefit plan (hubby as well) when we retire in about 5 years. Your videos are still very helpful and appreciated to us 😊
You are so welcome Debbie! Have a great day!
I wasn't aware that CRA had anything to do with decisions on CPP. Only that it collects it through the tax system for the government body responsible for CPP. So I was puzzled that CRA would make the announcement
right? it's Service Canada
05:40 “Increasing the max CPP by up to 50%” is not “doubling” as you said… it means if it was $100, it will now be up to $150 (not 200$).
Great video though!
I was self employed for 20 years and each year I paid DOUBLE CPP…..once for me and once for the “employer”, which was me. Done by a registered accountant
What's your point? Everyone who is self employed pays double.
A lot of self employed don’t pay as they are living for today and tomorrow is so far away
But no EI payment required
@@roadrunner4847 I am self employed and it is calculated on your income tax. I don't believe you can not pay it.
@@keng9357 I'm in the same boat as @kv7654 and can you imagine the fear in me when the pandemic closed me down! If it wasn't for CERB I'd be living in a tent down by the river!
As a high income earner I doubt I’ll notice $188 over the course of a year, but as someone who was chronically unemployed for the fist decade plus of my working life, I’ll appreciate the enhancement this brings to my benefit payment in retirement.
I’ve always earned 80-100 thousand. It was always noticeable in September when these deductions were not on my check anymore. It helped cover school fees, sports fees, etc. It takes a special person to think giving the government more of your money is going to benefit you lol.
Are you one of the higher paid propagandists?
@@albundy7623 touch grass
You are kidding me right? Sneezing at $188 a month when you read articles that families are within a $100 from insolvency.......
@@F_e_l it’s $188 for the entire year, not per month, and only applies to high income earners so the person within $100 of insolvency would not be hit with this increase.
You provide easy to understand information. Thank you for that.
You are welcome!
I'm OK with paying more into it until I retire in 4-6 years, but will I see an increase in benefits once I start collecting? Otherwise this is just another money grab.
Yes, those of us retiring within a few years will also realize a modest increase in our CPP benefits, based on the additional contributions. Adam discussed this at 6:45
I haven't paid into CPP since 2016 when I converted from salary to dividend income from my personal corp. I trust my decision making for my retirement over the government's. I also think that this enhanced CPP is being done because the fund needs considerably more assets to match the huge pool of people who will be turning 65 in the next decade.
I agree with CPP 1.0 and 2.0 for precisely the reasons you outline at 9m10sec of your presentation. Thanks for explaining the CPP changes so clearly.
I’m not happy about paying additional CPP premiums. Nothing we can do about it. I’m very close to early retirement so it doesn’t really affect me.
This is the shit that made me retire at 55. Employment Insurance and CPP max for 38 years and will get pennies on the dollar back. I can live a little meagrely and quit supporting this sick machine.
Much thanks , very informative.
I have a lot in Pugwash, Nova Scotia; often called the beach with the warmest water north of Carolina ! (The south to north current is between P,E. I. and N.S. splitting then to a warm current in between.) John M. Hill; (may sell).
Very interesting video. I'm close to retirement, therefore, it really won't affect me. FYI - there's no such thing as Black Friday in Canada. That's a US thing centered around their Thanksgiving geared towards people queuing up at stores very early on the Friday after Thanksgiving to shop. Retailers up here use the term "Black Friday" to suck stupid consumers into thinking they're getting a deal on rubbish they don't need.
I get great sale prices (ot hidden,) for my stuff in Montréal 😊
Amen. The lines have become blurred. The day after U.S. Thanksgiving, some radio stations in Canada switch over to 24/7 Christmas music. 😩
I've been working every day since I was 17 years old. Can someone tell me what happens to all my contributions if I die at 58 years old
Government wins.
It goes to your spouse or children as the named “survivor”.
@@MEdGrantonly a certain amount would go to your survivor…I think it’s like a third of what you would get…also a one time death benefit of 2500.00
When did people start believing the government could run anything successfully?
CPP is extremely well run, you will receive your CPP fully indexed no matter what happens to your stock portfolio or a market collapse. You are misled.
Thanks for the info. It's potentially investing more money for when you retire... If you live that long that is.
Adam, are you planning to weigh in on the APP debate? I think someone with your cred would add considerable value to people’s even handed understanding. Kent did a good job on his, IMO.
The APP would be good for Alberta because believe it or not Alberta has some of the highest contributions to CPP. I believe we would get as ALbertans a better return than the current CPP which if. you look at the CPPS performance the last 10 years abysmal. Any good pension shouldn’t reside with the gov as they have shown they cant manage money.
@@kennordsfan1494 where’s the SMFH emoji when you need it? Your ignorance on this matter has proven my point.
I am a Canadian citizen but was raised in the US most of my life and I worked there many years. I moved back to Canada in 08 and worked for a few years. So my CPP is extremely low which I knew it would be. But I was under the understanding that you had to work to get CPP. In your video here you said everyone in Canada gets CPP. I know many people who have never worked for such reasons as being a stay at home Mom or health reasons, etc. How do they get CPP if they haven't worked a regular type job?
A stay at home parent is entitled to half of what their partner paid into CPP.
@@eletakelley7188 Oh ok. Thank you.
So let's say I am a 55-year-old sole proprietor with full eligibility for CPP 2.0. I have a choice to make. One the one hand, I can cough up the $188 as the employer (tax-deductible), and another $188 as the employee (tax-creditable) and receive CPP 2.0 starting at age 65. For planning purposes I want to assume I'll live until age 88. Throw in an inflation rate of 3%, a marginal tax rate of 30% for both contributions and benefits, and assume that OAS clawback will not apply.
What's my after-tax internal rate of return if I elect to have CPP 2.0? I suspect it's less than 5%, but you tell me. Now I also have to consider that CPP 2.0 dies when I do, with no residual to my heirs (assuming my spouse has passed, or is still living and has max CPP). On the other hand, I could opt out of CPP 2.0.
It's difficult to make an informed decision without knowing the after-tax IRR under a set of reasonable assumptions.
Enhanced CPP is also tax-deductible for the employee. The 1% CPP enhancement up to YMPE is also tax deductible.
@@jiecut tax-deductible and not tax-creditable? tax credit worth less than tax deduction (normally)
@@tonyoostenbrink7808 Yes, Enhanced CPP is tax deductible for the employee. This is better than a tax credit. Enhanced CPP contributions is 1% up to YMPE and 4% for the slight bit above YMPE. And people also complain about the self employed portion, but that is fully tax deductible.
@@jiecut OK. Have you done any analysis of this to reduce to an IRR?
After seeing cpp2 written on my paycheck last month, I watched this video to get some information on what it is. $188 looks small now, but I think I'll be worried if it goes up a lot next year.
We need a way to opt out. Who TF is retiring in this country when everything is so expensive?
When it’s time to retire just move to a cheaper country. Your pension will go a lot farther.
Except you don’t receive CPP if you’re out of Canada more than half the year. Hence why snow birds only leave for the cold season and then return, instead of just staying South.
Question for you! Why does the government have their mitts on old age security? When they have nothing to do with it? It’s between employees and employers! NOT the government
OAS is 100% government. CPP is Employer and Employee not Government.
Ya, well why now do they care to raise CPP benefit mthly amount?
@@maryjeanjones7569well someone should get their wording right then !
I have a defined benefit pension plan. My total combined pension is determined by years of service and best 5 years. My pension decreases dollar for dollar for each dollar of CPP. Now with CPP 2 I'm paying more but wont get any more after 65 . This looks like a tax to me unless my pension contributions also go down for each dollar of CPP 2 I make. No idea if they will though.
They should. Can't see your pension admin getting away with that!
What you're apeaking to sounds like a bridge benefit. If you've paid into CPP for over 30 years, making decent money, etc, your CPP will be much higher than that defined bridge benefit you receive.
@@Broxtyit's not the bridging benefit it's that my pension is defined by years of service and best 5 years. So if I retire at 65, with 35 years of service I get 70% of my best 5 years combined pension plus cpp. I get the same total if cpp is 1300 a month or 2600 , it's just my pension plan would have to top up less. My pension is funded 50/50 employer/employee so enhanced cpp makes defined benefits cheaper so contributions should go down. I need to ensure that they are but I've noticed bigger deductions last few years.
CPP is designed to replace 25% of YMPE, I'll be getting 70% of my best 5 years which will be over YMPE so my work pension will be much bigger than max CPP.
Your bridge is until 65 then your defined goes down but oas and cpp kick in and keep you at the same level. So your still getting the same with the cost of living to keep up with inflation. You will get everything you put in and more if you live to 90....some people pay in there whole life and never collect more then a year ....others take much more then the ever put in ...depends on how long you live
There is no true accounting or calculations kept by individuals back 45 years ago on how much was deducted on each pay cheque. Did anybody care ? All you knew was it was deducted and had no clue you’d pay tax on those contributions when you retired. Fast forward to today, if you planned for retirement and invested in RRSP’S and made enough to actually retire and received CPP and OAS benefits and for two consecutive years owed more than $3000.00 in taxes you’d be forced to make prepayments of taxes a year in advance on CPP & OAS benefits and anticipated gains and pay previous years income tax as well. If you fail to pay your prepayment they assessed on time a 10% penalty is added. This retirement income taxation scheme is extortion and loan sharking. The CRA is now doing your taxes for you, they are judge and jury with the data they collect, why bother filing income tax, they already have everything.
Can you do an analysis on the future value of someone's life contrubutions growing at the posted ROIs from the CPP financial statements compared to that person's prospective payout from CPP?
Working in it. Couple weeks it will be out
CPP premiums go into government coffers. As government runs deficits, CPP just goes to overspending. So, this 2.0, is needed to sustain CPP payments and increase payments with inflation.
Wrong. The government has zero access CPP contributions. The increase is required to increase benefits. Pay more, get more. Thats how its worked for 60 decades now.
You couldn’t be more wrong!
Best financial decision I ever made was getting off payroll and starting my own consulting business working for the company I used to be on payroll with. You can keep your RRSPs and minimal benefits, my tax savings easily cover all that and more.
It is never a good idea for government taking more money out of each paycheck. I would rather manage these myself through maximizing my RRSP and TFSA contributions throughout my working life.
By that logic there should be no cpp in the first place, which would be a disaster.
CPP is indexed to inflation… guaranteed
No it’s means he’s responsible unlike you!
Government doesn't get this money - it is administered outside of the government. Your comment would also mean you would not be entitled to the employers 100% matching money. The CPP current designed is to replace 25% of income up to YMPE and with the enhancements move to 33%. Not sure why this is a bad thing as the plan is well funded to deliver on this promise.
It's hard to beat a guaranteed 100% return in the form of an employer match. I'm fine with paying more.
For those of us who have stopped working but not yet collecting cpp, is there any impact to what me might get?
No
Great video, thank you. I just turned 65. Is it financially better for me to delay taking CPP for 1 year and continue contributing to CPP for this year as I am still working full-time? Or am I better off starting CPP now?
Retire! And enjoy your short time you have left. Seriously, how much more would you get for sticking around one more year?
I woke up one morning and realized there's more days behind me than ahead of me. Why waste it working?
If you love your job enough to be okay with missing out on this money that you paid into then by all means keep working.
Otherwise I’d retire and enjoy the next stage of your life. There comes a point of diminishing returns and I think 65 is that point.
Of course this depends on your own financial situation.
The question is at what point do they come out and announce that while you will still have to contribute and an increased amount yearly, that there will be no new applications for the CPP? Grandfathered in. January 01 no new application accepted and a few years later no CPP at all.
Hi Adam, not fully on topic but how was CPP calculated for people who were working prior to 1966 ( commencement of plan )
For example if some worked 27 years after the inception date and retired and took CPP at sixty and paid the max. What would CPP max out at . Thanks great channel
I am collecting CPP but still working, and paying CPP. does this effect future payments?
me too. Sounds like....No. We are screwed.
You will get some sort of working benefit. It should be evident when you file your tax return.
You should receive the post-retirement benefit which is calculated the same way as CPP, on earnings between 60 and 65 "as long as you are paying into CPP and working". I just started my CPP at 60 this year, and that's how it was explained to me. The amount is also cumulative, over that five year period "assuming you retire at 65". Whatever the final amount you receive when you stop working, you will continue to receive every year thereafter. Give Service Canada a call, there pretty good for having the information or will give you the direct number to CPP to answer the question.
I invested 65 000 in a TFSA with SunLife. It is now worth $55 000 and the advisor told me I’m getting 5% interest…..he was shocked when I called them thieves. In December I will withdraw what’s left and go elsewhere for my TFSA. I understand that I can’t withdraw the money and open another one with that money in the same year. I wonder how much more they will slide out of the account . Market conditions….uh huh….
Thank you!
How about increased CPP income for seniors?
CPP is not welfare, what you get out is what you pay in, the reason that is no longer enough is that Trudeau caused a massive spike in inflation, just wait until you see what is coming next.
Your benefit is based on your contributions.
Thank you for a very informative video, liked that "won't affect you". I retired at age 62, not ONE regret in '10. If you own a house, 100k+ in the bank, rrsp's and a private pension also...you're set. Unfortunately, politicians and senior civil servants have built in pension gravy trains, federal...6 years service for politicians, what a farce.
I'm taking CPP BUT still work and I've had to still contribute to CPP. How does this affect me?
PRB - Post retirement benefit. We have a video on that if you search the channel
I reched my max CPP 20 years ago, and now paying $400 out of paycheck every month for CPP AND $350/m EI.
As someone who is self employed and pays both sides of the CPP it is devastating.
I have trouble believing anything the gov says !!!!! I’ve paid into this for 50 years & I only get 360$ per month. Like what about all the interest it has accumulated?? I can’t survive on this today 2023?
If someone already has a defined benefit pension with their employer, then why would they want/need to contribute to CPP2? If I invested that $ myself, it will be there for either myself, my wife, or my kids should I pass away. With CPP2, that $ could simply be lost to the "government pool" and it will be lost to my estate. Is that correct? Any money that is not already in my grubby little hands, is not my money at all.
Great video as always , I live in Quebec therefore the QPP is relevant for me. Can you have some future videos about the QPP and some retirement scenarios ?
Thank you
It's literally exactly the same.
It's the same, Qpp even actually explains your future pension earnings a little more in detail, look at your QPP contributions report.
the way pension is set up is completely unsustainable and I bet in 30 years or so the retirement age will probably be 75.
I haven’t paid CPP since 2019 when I went on CPP disability (1300 monthly) and that’s a joke. I can hardly wait till next year when I have to go on my pension.
I am grateful CPP exists for people such as my son, who while earning a decent income, has no discipline to save for retirement. There are lots more like him out there.
Sad but true. Our CPP contributions help those who can't or won't save for retirement.
The problem is that the CPP is only a supplement to other retirement investments.
Ponzi scheme
@@albundy7623 It's well funded, so not a Ponzi scheme. At least not yet. But the max that can be withdrawn as a benefit is only about $1300 per month.
And that's if you've paid the maximum contributions each year. With runaway cost of living, high taxes, etc. $1300 isn't enough. The average benefit payment is about $700 per month. Can't retire on that.
SO THE OWNIS TO RETIRE IS ON OTHERS WHO DON'T POORLY MANAGE THEIR MONEY.
How come only now is the goverment actually caring about raising CPP benefit amount?
CPP has been increased every year for the past 60 years.
Max is 188 dollars for 2024, and the proposed amount for 2025 is 388 dollars. If it keeps on doubling, it will soon reach or surpass the standard CPP contribution.
So, I just retired (2023.07.31) and I was contributing right up until then. Can you elaborate how this will affect those of us (mentioned 6:45 in video) that recently retired.
Also a graph on how cpp has kept up to cost of living!! Today
Could you redo your "is CPP a good investment" projections using the enhanced CPP contributions from today rather than from 40 years ago to see when you run out of money. I think it was age 76 from your original video.
No one I ever worked for paid my CPP, not in Horseyland. They always just gave you cash or a cheque.
I waited until 7:00 to find out I won't be getting any more CPP now that I'm collecting sigh.
On a side note, glad I'm retiring this year as I am BOTH an employer and employee. I have enough problems with the increase of things and now more CPP contributions for the business.
We in Alberta, need our own pension. What happened to the investments that were made on behalf of the CPP?
You never get out of CPP what you contribute. I have contributed to CPP since 1978 and all I get per month is $350.00.
I have also contributed since the 70s but because I worked 2 or 3 jobs in the earlier years and higher incomes in later years, the amount I will be receiving is closer to the maximum. It all depends on how much you put in and not just the length of time you contribute.
I hear ya brother! My wife has worked since she was 14 years old starting in the mid 70's and never stopped. The amount of CPP she can collect at 60 is PATHETIC compared to mine.
Same with me 35 years of working $550, while a refugee claimant person I asked he gets $700 a month, welfare they get more than a $1000 a month.
$350 per month means you made very little contributions during your life.
@@Sp-nd6uj Yup, it's what you get earning minimum wage most your life.
Hi I am 61 and still contributing to CCP , plan to contribute until I retire at 67 , will this new contribute help with what I will receive or will it be the same. I paid the maximum contribution for over 30 years .
If you are contributing to the higher amount over the next six years, it will positively affect your pension amount. Only those six years will see a bump. Someone starting work at 18 today and able to hit the new maximums for most of their career will see a larger total pension due to contributing more for longer.
When a business relies on tips to supplement the meagre wages that they pay employees they also avoid paying CPP on that extra income source.
How is this benefit down the road, with all these uncertainty I'm not confident I can collect enough pension to survive when i retire. Not that anyone retired right now is collecting enough.
CPP 2.0 is an indication the plan has failed. I hope Alberta leaves the CPP. Quebec was smart not joining CPP at the start. CPP started in 1965 so the plan has already failed for a citizen born that year not yet old enough to collect.
AS self employed, cannot opt out of CPP until age 65 as per the info on the CPT30 form
Pay yourself a dividend and you have opted out
@@ParallelWealth Must be incorporated to pay yourself a dividend. Sole proprietors are not exempt. Must pay both parts of CPP premiums until at least 65 and then must be drawing a CPP pension to opt out (if still working).
Well, this was naturally going to happen. They know Alberta is pulling out.
I hope we do. This is a bad investment!!
@@carolhemming2594 agreed.
Next payment adjustment - July to September 2024
Based on changes in the Consumer Price Index (CPI), OAS benefits will increase by 0.7% for the July to September 2024 quarter, for an increase of 2.8% over the past year, from July 2023 to July 2024.
Benefit amounts for July will be published on this page at the end of June 2024.
So with this cpp2. Does it increase your pension when you retire at 60 or is it just an increase to what you pay yearly?
Yes
Thanks for this great video. I have a general question. When you log into CPP and see the amount, is that the amount you will get if you continue to pay into CPP until the age of 65? I am asking because I am 62 right now. Thanks again - Albertans need to be educated more on this. It would be interesting to know if 5 years before turning 65 how this enhancement helps them.
That is correct
How does this work if you only make $43,000 a year?
I watched the video it gave great explanation to the amount I will pay but still don’t understand how it will affect the pension I receive?
CPP2 is supposed to help retirees in the future receive 33% of their working income compared to 25% now.
Very well explained.
Thanks Ron!
it is not the first video on this channel, with an intro that stated that CPP "affects all canadians". I suppose all Canda EXCEPT Québec, that has its own QPP. I suppose a reference to this, or at least mentioning the exception could better inform,
You didn't cover the fact that the CPP contributions by workers today support retirees today. It doesn't go into their CPP - which would be paid by workers when the current ones retire...
Not the case at all. In the US this would be true with their SS, but not in Canada
"Maybe" this is a good thing for younger people as you say BUT I am not a younger person. This will not benefit me the same way. I can't speak for anyone else but I am tired of and feel like I am going broke as I continue to pay more and more to benefit others. My solitary 5 figure income simply can not keep being sliced up "for the benefit of others"
Adam, you previously did a video showing if CPP is worthwhile, which I find it very helpful. Would CPP2 be just as worthwhile - will you be doing a video on that as well?
I have contributed the maximum CPP contributions for more than 41 years and am 65 years old. Is there any reason to continue paying into CPP or should I opt out?
You're done! Don't pay another cent into it! You probable have to opt out but if you do pay you should get it all back when you file your return
If this were me I would definitely opt out.
At age 65, you can stop paying into CPP. There is no need to continue paying, especially after 41 years of maxing out.
@@yvonneh5334 there is an exception which can be advantageous to some people. If one is already collecting CPP, but chooses to continue to work they will be eligible for the post retirement benefit. Depending on one's situation, and assuming they are in a position where they feel they must (or want to) work anyway - the PRB could be a good reason to keep contribution - very circumstantial, but one should understand if it is, or is not, a good option for them.
@@James_48 It appears that to opt out of paying CPP contributions one must be receiving CPP payments which I am not. At least that's what form CPT30 says.☹
All valid points ,but if I take CPP early am i not also loosing more . Thanks for all your time & effort !!
I took mine at 60 and have never regretted it!
I wonder how this affects military pensions (where CPP is clawed back)
When you are in claw back territory you are in literally in the pound seat. I don't have a pension, paid 45 years the max allowable amount into an RRSP and I am not nearly close to the claw back threshold.
Sole proprietors are not exempt from paying into CPP.
Since when can self employed people opt out of the CPP?
Pay dividends
The greater the CPP income in retirement the lesser the GIS amount.
It's obviously a gimmick for the govt to take more money now and save money down the road.
I noticed you don't talk about early retirement at 60 . If you retired before 65, you pay a penalty of 36% in full. Then, you get an adjustment check once the 36% is taken off. Which isn't much to live on. Thank you
The earlier you retire, between 60 and 65, the less you receive monthly from the CPP. If you delay payments until after 65, you get more, which is what I did and I don’t regret it as I still work. Many others won’t or can’t work past 65. It’s a personal strategy based on health expectations and current income.
Yeah I just got a raise and was looking forward to having a bit more money (I make over the yearly max and already pay into an employer funded pension) but now I pay more and ya maybe it will enhance my retirement but this is the Canadian government we are talking about so I’m not holding out much hope.
I have two job, separated I don't reach the threshold for the second CPP, but together I do. With that situation will I have to pay YMPE?
I would assume at tax time, if there is a CPP contribution shortfall based on total income from two separate jobs, there will be a reconciliation that takes place. This is what happens with CPP today.
Yes that makes sense, thank you @@James_48
@@James_48 Yes, but whose going to pay for the employer's shortfall, or which employer pays for the shortfall, or will the taxpayer (employe) foot the bill for both?
@@chm5750 I believe the employee would only pay the employee portion. I assume, just like when an individual files their taxes and there is either a shortfall in CPP, or an excess in contributions there is a reconciliation. I assume something similar happens on the corporate tax side of things.
It's just the first year and they will be ramping this up big time every year. Just look at the 2025 contribution which is over double.
Wish I could Opt right out.
Can I still draw or defer CPP if I'm already drawing CPPDisability until age 65?
Yes you can still defer at age 65
Aren't I already drawing from my CPP while drawing CPPD? I was told that my CPPD will automatically convert to CPP at age 65, so if I want to defer until age 70, I still can?
@@ParallelWealth ?
@@sunsetson2209 it will start automatically at 65, but you can ask them not to and delay up to 70
CPP IS under funded , that's why they don't want Alberta leaving it , no money to pay out hence the increase and reluctance to show the actual fund numbers as well as coming back with what they think Alberta is entitled to when we pull out . By coming back with their numbers alone would open the door for us to leave which they obviously can not afford to have happen for the aforementioned reasons.
Should be able to manage your own retirement fund like Australia, not have some Government bureaucrats deciding what to invest in for you.
just hit 60 and wont take my cpp till 65, for reasons. if i die prior to collecting will my wife who is 7 years younger than me get the credit in cpp that i have accumulated? or a benefit she can collect as a survivor?
Anybody who invests usually has a diverse portfolio not all eggs into 1 basket ?
I think the govt. would do much better by making the cpp a choice/voluntary. Its not right that both a worker and his employer be forced to invest x-amount of their earnings into a retirement plan they don’t like ? At the very least allow the employee to invest his 1/2 into whatever he feels is the best way while the employer must pay the cpp. Then the employee could have a second back up plan to counter any issues with the cpp in the future.
Even if you have all debt paid off before retirement the CCP is not enough to retire on. Many individuals who retired have taken on jobs to supplement their pension.
CPP is designed to repalce 25 percent of your income. It was never designed to live off of. It is there to supplement your individual savings.
I wish they would take tax on the CPP portion while you’re working, tax entire gross income, so we don’t pay tax when we receive it. We need every penny once collecting CPP.
I paid the max for 24 of my 44 years working ! As ironworker rigger fitter welder connector ! Hugh overtime ! ALMOST ALL DISAPEARED , , DUE TO GOVERMENT CLAW BACKS AND GIVING MY X 100% for life ,,,,, she left nine months after i signed , was not allowed to change . But I swear ill outlive her , shes 5.5 years older! Until i die she gets nothing !now 75!
Any time the government takes your money, its bad. There's always naysayers, but I was taught to look after myself and my family. If those contributions were made and invested over the long term like I was taught, and passed to my children, then you don't need the government. Why is it everyone wants the government to look after them, or have greater government dependency ?
For those that haven't planned, its not those who have planned problem.
Plus, if our taxes were lower, and people had much more money leftover, they could further invest in themselves. But it seems in Canada, most are too encapsulated to keep up with the jones's no matter the debt burden.
I wished they would’ve grandfathered this in. I’ll max again and not see more
Please help !!!
This year in January I will be depositing $30,000 into my RRSP
I have never done any investing. I am thinking of doing this with my bank at CIBC.
Is this the right decision and should I be investing in stocks? Thanks
Best to go through an independent investment advisor, ie the one authoring this RUclips. You will get better returns on your investment; even rrsps.
@@donnakemper3333 hi thanks for that info
Like I said, I am very new to this. How would that work as I don’t live in Bc
I see they have there offices there
Please post a link to info that says the self employed can opt out. I can't find anything on the governments website regarding this.
Take a dividend versus salary - you don't contribute to CPP on dividend income.