📈📚 Join The Investing Academy ➤ bit.ly/theinvestingacademy A lot of Canadians think that the Canada Pension Plan will provide a comfortable retirement for them, but that's not what it's designed to do. In this video, I'll discuss the major things you should be aware of to ensure you are able to prepare properly for your retirement, and the role the CPP will play. Thank you to Passiv for sponsoring today's video - passiv.com?ref=RGAMTXSUAM #stockmarket #canada #theinvestingacademy
Really enjoyed the episode, Marc. One of the issue with increasing CPP is that it essentially channels money away from people who already save on their own. More specifically, it reduces the amount they can leave to their beneficiaries. If you pass away relatively young, and the money is in your RRSP, then your estate pays the applicable taxes and the rest goes to your heirs. For money in CPP, your estate receives a small payment (I think it is $2,500 and is taxable) and the rest is gone. So for people who invest on their own without being prompted the increase in CPP is detrimental.
Hey David. Well said. To me a big problem is the loss of benefits in most cases if you die too early. It's a huge reminder of the structure of the program, which is similar to an insurance structure... everyone contributes... some get little to none, others get a lot. Certainly not perfect. - Marc
I am 67 and did plan and save..HOWEVER...in 2016 I recieved 18 tick bites giving me Lyme disease which Canada does nt recognise or treat .instead they reject, neglect and abuse patients !!.After 4 years bedridden , spending retirement savings , losing home , car and still unable to work..I am left begging people for a place to stay so I can spend my CPP on naturopath...
@@dawnadevine1618 But if you have a low mortgage rate your actually better off not to just focus on the house but to also invest your money which will give you more returns 😀
Great episode Marc. So many people are missing knowledge when it comes to CPP and they need to be informed at the youngest age possible!!!. Financial information like this is absolutely needed (and critically so) within our education system. Financial literacy is just necessary if our kids are to be productive and secure in their later years. 👍👍👍
Thanks, Derek. This info might help out some of the more mature crowd, but I'm really hoping it will educate the younger folks and get them off to a better start, and thus a better finish! - Marc
This is a great video I feel everyone in Canada should watch this video and your next video should be about how to protect your savings from inflation and preserve your buying power for your retirement
Brendan, having your dad join your channel is not only genius, but also going to save a generation of millennials who do not have the benefit of a parent to show them the way. Thank you!!!
Great if you have enough income to save but for most by the time you pay either mortgage or rent and utilities there is nothing left when average income is around 24 hundred dollars per month and rent or mortgage and utilities is 2 thousand per month and then you need food and after that there is nothing left to put away for retirement
I feel like this was a more important video than the title. I am 27 and have been saving because of this knowledge. The facts have time and time dollar cost averaging into good quality ETFs or stocks will generate income for the future
Hello Marc (and Brandon). This was a great video in providing information about CPP and its relation to retirement for the younger generation. The challenge I find with my young adult children is that they are not financially literate and not interested in these important topics when compared with other things on social media. They live in the present and not really thinking of the future. Personally, I find it fascinating (I just recently retired). I have been watching your channel for a while and I really trust the information that you both provide. Great job and future success with the channel and Academy.
Hi Benny. Thank you very much for your comment. You are so right with the challenge we have educating the younger generation in particular, but it's certainly not limited to that demographic. Overall, we as a society should do a better job of promoting financial literacy, but as you point out, we're certainly lacking in that department. Really happy you're finding value in watching our videos, and thanks for your support. - Marc
I'm a disabled veteran that gets an income replacement benefit plus other top-ups, and have received it for well over a decade now; however, CPP isn't deducted. To counteract the lack of CPP in retirement I've maximized my RRSP and TFSA. And I've managed to invest 69% of my income because I live WAY below my means. I've decided to forgo all comforts now for a better life when I'm more incapacitated due to old age. LOL, I hope I don't have a dirt nap when I start enjoying the fruits of my long-term planning!
Thank you again Mark! Videos like this are so great for the community. You are adding so much value to peoples’ lives simply through your education and experience. These are the type of lessons that hopefully can reach more people so that future generations and our society as a whole can prosper.
I am not a big fan of CPP.. but I do understand why it exists.. Marc we have tons of other problems that compound the issue of poverty.. like government overcrowding of the private sector, high cost of regulations, bloated public sector, raging inflation, population addicted to material consumption and an environment in general that discourages investment and growth.. unless we start tackling these issues, we won’t have a turnaround on the poverty issue and this needs a mindset change.. I admire and share your optimism and your efforts to educate people as the deeper we go the more efforts the individual needs to do to stay afloat
Marc, you are wise and kind. This is an extremely important video. I wish more people see it. I love love this channel. I'll consider the retirement course!
That sure would be nice for lower income earnings, but the threshold will be much lower than the $45k/$90k levels you're suggesting. It's pretty tough to scrape by for a lot of people. Thanks for watching the video. - Marc
I believe the 10% savings rule is supposed to be based on top of CPp and OAS. These benefits were put in place to subsidize one’s retirement, not completely provide it.
@@hollyclark690 haha fair I don't mean nagging constantly or anything, more just make a point of trying to make sure they have a plan. Definitely people will only do what they wanna do 🙂
Because I waited until age 70 to collect my CPP I am receiving $1,755/ Mo or $21k per year. I only contributed $40,842 over 43 years so I will get my total principal back minus interest in less than two years. I will receive $1,073,112 in CPP if I live to 100 which my Dr says is very likely. There is no way I have the skills to convert $41k into $1M. I supplemented my Retirement with my RRSP meltdown until age 70. I retired at 60. If I had known Covid was coming I would have differed my OAS in Jan 2019 as well to gain an extra 36% +. That is because I spent very little money from Jan 2020 to May 2024. I went on my 1st road trip across Canada since the pandemic just these past two months. It bothers me when people slag the CPP. It is one of the World's best managed Pension Plans. I have no fear of it running out of money in my lifetime. I will enjoy spending my extra $million$.
Many people fail to save adequately for retirement. This is not because everyone is a spendthrift. It's because the cost of living has increased exponentially (think housing), medications, food, insurance, etc. They work at jobs in which real wages have not increased to align with the cost of living. They do not have adequate benefits. They choose between taking their kids to the dentist and putting food on the table. How are they supposed to save for retirement?? Many will be working until they die, just like in the past. Extreme wealth disparity is real in Canada and elsewhere.
CPP has been bothering me for the last year + now, knowing how high cost of living has become and how low many wages are. A lot of people seem to be relying on CPP for retirement. I think there should be some basic finance taught in highschools, when I was there in 2013 there was none (Ontario). The best we had was one of our math teachers took 30 min to explain interest rates/how to use a credit card etc (she was an amazing teacher, truly cared). Half the class paid 0 attention because she said it was not in the curriculum/wont be tested on it. I fell that many countries are far ahead of us on this matter. Thank you for the distilled information and your views! Hopefully this helps more Canadians retire comfortably!
Inflation, carbon taxes, other gov. taxation, gov. debt, high interest rates, the cost of living eat away the buying power of the dollar and pretty soon you have a currency that is worthless, just look at the price of gasoline today. Hard assets to me are the only way to go.
Excellent advise. I have made my own pension plan with the help of an advisor since I don’t have one through my employer. I always say do with a little less now and your investments will give you a little more in the future when needed. With the rate or inflation lately, it definitely does make it more difficult.
Oh there are a lot retiring even before 60, but they are the lucky ones that sold properties that were worth only a 150K decades ago for a million plus.
That's like being on ODSP. All these social support programs need to start at the poverty line and add the inflation rate and work from there. People on ODSP may have additional support required. People on OW need a transit pass to facilitate job search. But it must all start at the poverty line.
we decided to take a different route by buying an income property. plan is to sell off our principal residence on retirement and move into the income property continuing to rent 2 units while being mortgage free. some investments and rrsp's but didn't start early enough!
So many friends who are now in their 50's and realizing all those "under the table" jobs over the years were not all that. No one I talked to have any real savings, emergency fund or mortgage. Many live in basement apartments and drive old cars. So sad. It's going to be catastrophic sadly. More Gen X didn't invest than I ever realized.😬
Canada pension is starvation pensions. Canadian government has money for corporate welfare and wars, but there no money for seniors and disabled Canadian
Thanks Marc. I am a new investor, was always a saver but of course had no economic education and did think that CPP was a retirement income, also that TFSA and RRSP were just the same type of account as my savings but with a fancy name. Thanks to you guys, when I started investigating about investments I have been educated, hopefully not too late! Thankfully I did buy a house so at least some equity has been built up over the last 20 years.
Raising the rates also has the effect of transferring wealth from high-income earners to lower-income earners and providing more equality throughout society. With more low income earners having more money they can spend it and this cycles back to enhancing high-income earners income.
We can make a law that you need to put money into an investment account that can not be withdrawn till 60... and avoid cpp issues and government bs management. This has been done in other developed countries.
@@beaviswealth really ? You want the government even more on your business? People have to learn to think for themselves and not rely on the government to babysit them !those f'ers aren't getting any more control over me.
Trudope just got a $ 21,000.00 raise as of April 1/2022.That is more then a seniors makes a year on CPP and OAS.I wonder what is cheaper then dog food.
Hi just a comment on the 5.7% contribution. It's a combination of employee and employer so only half is out of pocket (2.85) so need to save more than 4.3. The young folks need to hear this message because they will likely not have access to company pension benefits. I have drummed this in to my 25 year old daughter for a number of years. She is in her last year of university and had worked for the last 8 years. She has accumulated over 25k in her TFSA and learned the habit of saving 10% or more of her pay.
Hi Al. Marc is correct the 2022 CPP contribution rate is 5.7% for the employee. The employer also contributes 5.7%. The total CPP contribution rate is 11.4% up to the maximum annual pensionable earnings amount.
Hi Al. The 5.7% is both employee and employer, for a total of 11.4%. I agree the younger crowd can benefit most from understanding how this works, and hopefully it will help a few prepare for a better retirement. Thanks for supporting your daughter and it sounds like she's off to a great start. Cheers. - Marc
This is a great video. What happens if you contribute to CPP your whole life and all of sudden you pass away before you retire. Say for instance you plan to retire at 65 and you pass away at 64, what happens to all those payments you made over the last 40+ years?
@@beaviswealth It is sad that you are paying into a program your whole life and your loved ones only get $2500 out out of possible tens of thousands that you paid into the program. That is government for you :)
My daughter died and did put into CPP since young CPP issued 2,500 death benefit I wish they gave at least 20 percent monthly to her sister. Its a rip off.
Everyone in the USA are so focused on their Roth IRA and other savings types. Here in Canada young people seem oblivious about retirement and how they will support themselves when they are aged. So each province has to supplement them in order for them to survive. We need to start talking about savings for retirement in school.
Fully agree... we should be teaching far more financial skills earlier in life... it would have huge payoffs over time. Thanks for your comment. - Marc
The best part of the CPP is that it is near bond like in its payouts, it will rise with inflation, the actuaries says that the CPP will be in good shape for decades to come, and that it can be a very imoprtant and predictable part of your income. With good tax planning, it can be even more valuable to the retiree
Great video, and a good reality check. I do feel that another part of the story is fractional reserve banking and how it creates the debt that exists, the inflation that exists is also critical as a reminder because I would say a lot of people aren't conscious of it. Then there's the largest wealth transfer in history that happened during the pandemic. It wasn't by accident. People can still make it, and I say that as a person who doesn't have his retirement planned out yet (it's definitely a scary thought and reality), but it's also a fact that a lot of people cannot make it by default. If people who make less than a living wage can't invest anything, are living paycheck to paycheck, while their salaries aren't keeping up with inflation, that also creates other problems in society such as the mental health crisis, drug, alcohol, tobacco addictions, addictions to other vices.. etc. Dysfunction in the family unit where abuse starts to take place. A loss of purpose in life which demoralizes the emotional/psychological self. And of course, it all affects the moral fabric in communities and in society in general. All of this isn't by accident either. Some people may say that I'm thinking too much into it, but if you ask "why" this happens, it comes down to money and the lack of it. I mean a large number of divorces are because of financial problems of some form. People's actions in their daily life are based around money. Of course, there are people who simply waste money, but there's a component of an obsessive compulsive element to that, so it's subjective.
@@beaviswealth Even though I don't have my own retirement in order, and we are all on the journey of learning, I'm trying to connect the dots the best I can in order to make something of my retirement years. Most people out there are working jobs that they don't like, or worse, dread working just to survive. That's also a contributing factor in why people can't make it.
Pay yourself first, then your bills, and your wants should be the very last thing on your agenda. It doesn't hurt for your kids to get jobs and put themselves through school, while you get going investing for your own retirement.
Yup,I got disabled and put on cpp disability,I literally walked from Alberta to nova Scotia,looking at rent all the way,I couldn't afford rent anywhere in Canada,10 years in a tent,year round, no housing for me,no additional Benita,took me 10 years to get aish and finally get out of the woods,foods still a problem
Tax policies over the years that have made houses and condos a must for an investment vehicle is taking its toll on society. Should never have allowed only half of the capital gains subject to taxation on non primary residences especially to foreign speculators.
I wish my parents educated me about some basic money - now im older and started late I have to catch up. - for sure im going to educate my Son on the benefits
Totally agree that our society needs to improve the money skills passed down through the generations. Hopefully this type of thing will help. Thanks to you for helping your son get a head start. - Marc
Thanks Marc. CPP is for the few that had no future plans of wealth... one day at a time mentality 🤗 “Be Happy, Money grows on trees”. Thank you government 😏 If you want to be truly wealthy at 65, you must plan at age 19. First and far most a Savings for down payment on your first home. Build equity. Borrow on equity. Invest equity into business. Work hard, think smart, Survive on diversity. At 65 your tiny little CPP amount won’t matter much 😉
Gran video Marc, esa es la razón porque comencé a invertir! Siempre necesitamos dinero y yo no quiero trabajar hasta los 80! Todas las personas necesitan incrementa tus ganancias, evita demasiados gastos e invierte el dinero, podemos disfrutar ahora, por supuesto, pero tratando de ahorrar lo más posible. "Great video Marc, that's the reason because I started to invest! We need always money and I don't want to work until 80! All of the people need increase your profits, avoid too many expenses and invest the money, we can enjoy now, of course, but trying to save as much as possible."
How much you can save and invest when living expenses (shelter, food etc. )is so high. For example average rent in Vancouver for one bedroom apartment is $2000 +food +utilities+ car etc. say total around $3500.If you work for $30 per hour you making $4800 per month after deductions for tax ;medical; pension etc. you can't safe nothing and people working for minimum wage are in more worse situation. Working as emigrant for 30 years supporting kids and society, when you retiring (averaging $50,000 per year )you will get $800 working pension + $500 OAS +$200 to $400 Supplement totally around $1500 to $1700 in same time person that is born in Canada newer work when is 65 year old will get full OAS($600) and supplement of $800 or $900, totally around $1400 to $1500 + shelter .So in Canada working people paying taxes are in the worse situation when they retiring. The best solution will be if every Canadian 65 years old receive minimum pension of $1500 (people newer work receiving today )and people that work receive as bonus their working pension (average $700) plus affordable shelter and reduced cost of medication. Working people supporting this country and society deserve at list that. Canada is reach country helping everybody aboard (billions dollars) but it seems can't help own older citizens, especially people that worked at list most of life.
Why bother working hard and contributing more? The lower-income earners can actually make same amount of money that they make before retirement with the OAS (maximum monthly $687.56 age 65 to 74, and $756.32 age 75+) and GIS (maximum monthly $1,026.96 in 2023). If you're single, widowed or divorced, and your individual income is below $20,832 annually, you'd receive the maximum monthly payment of GIS. That is more than the average CPP Canadians can get and a little short of the maximum CPP of $1,306.57 in 2023. If your annual income is below $20000, it seems to me that you can live a rather comfortable retirement life. 🙂
Canadian government should provide. I have heard that retirement means homelessness. But didn't believe it until now that I am retired. Shame on government
It's crazy and terrible the way Canadian government calculate my CPP after 32 years of work I only get $480 at 60 years old. They should dont consider 30 years ago the rates per hour is $ 8.50 -10.50 hour. They calculate how much CPP you contribute. Now the minimum per hour is $16, and up.
Life expectancy is realistically longer than 80, because that statistic also accounts for younger people dying (eg. a 5 year old getting cancer, 25 year old killed in car crash, 40 year old dying of a brain aneurism etc). But when it comes to actual years of retirement we really need only look at people that reach their 60s and how likely they are to live to a certain age. I forget the numbers, but if you live to age 65 you have a very good chance of living much past 80. So it's even more important for people to plan to live long lives when they are calculating how much they will need for retirement. I hope that made sense to people.
Interesting point. Using current tables, Life expectancy from birth is actually 80, But, as you point out, if you are surviving at 60, life expectancy from that point on for males is 80.5, females 84.9. If you live to 65, it goes to 81.7 for men, 85.8 for women. Thanks for your comment. - Marc
If CPP is designed to keep us out of poverty why is it so far below the poverty line? The poverty line is a good line to draw the limit at. Anyone living below the poverty line should be raised to the poverty line plus the inflation rate and then it should be indexed.
If you're an employee, CPP contributions are mandatory. If you're self-employed, you can avoid taking salary and paying into CPP, but that has other concerns that have to be considered. - Marc
With more and more employers getting rid of, or never having pension plans available, it's tough to save for retirement, especially when good advice hard to come by. Everyone is a salesman.Even though the market still has the potential to drop,at retirement time, leaving you with nothing, mutual funds are still the best bet. Personally, I believe that lower income earners would benefit most, from the TFSA plan, mainly, because what you withdraw, from your TFSA, isn't counted as income, so nothing gets clawed back. One just has to hope that the TFSA grows into something substantial.
A TFSA can be put into a low risk market utilities GIC. The longer locked in the better. One of mine just matured after 3 years and got a 18 percent return. Now that same type of GIC is offering a lesser minimum and maximum return now for some reason; just waiting for better rates to show up. I was told to wait for the late spring or summer, as that is when rates are usually better.
@@robertmaxa6631 They do very well under locked in low risk market utilities, but the catch is a minimum of three year lock in is required. And if you want to cash in before maturity, the penalty is severe and cuts into your principle in the first two years. My second GIC matures at the end to the year and I have accrued a total of 10 percent return so far even though it's min guaranteed rate is 0.4986 and looks like it will make the maximum of 15.5 percent at maturity. Of all the GICs I have got, all exceed the minimum return guaranteed. and most of them close to the maximum return amount in the last five years. I'm not getting any new utility GICs for now, as the banks are only offering a maximum return of 10%. and a minimum guarantee of 0.01.
I would be interested in seeing a video on RDSP (Registered Disability Savings Plan) and how to make the most of it. I understand it may not be relevant to the majority of your audience. I have a child who has type 1 diabetes and qualify for this account and grant from Canadian government.
Are you saying the bottom 20% is not saving for retirement because of cpp etc? I have been in that lower 20% and it’s meeting day to day needs. I needed that $200 a month for food and rent, no room for a retirement plan, as important as I knew that was. I agree we can all do better, but it is just not always possible.
Hi Robert. Not at all. I'm sure 99% of the reason the lower income group doesn't save is because there's nothing left over at the end of the month. That's the big challenge. For those who do have room, I think it's good to encourage a higher savings rate if possible. Always appreciate your support of the channel. Thanks. - Marc
@@beaviswealth ok. There seemed to be an argument there that if the benefits were increased, the next 20% income group wouldn't save for retirement either, which made it sound like it was choice, which can easily slide into 'blaming the victim' territory, if you know what I mean. A lot of this should be taught in elementary and high school ( and at home if possible), so we have the skills to be able to act in our own interests vs being the consumer we are all trained to be, in a lot of ways. Capitalism requires consumers, but it also requires people who generate income, too.
CPP isn't meant to retire on. You should have your home paid off (if wise) and a nest egg or retirement fund. Please be wise with your money! Thankfully there are a lot of jobs available and still options for seniors in the workforce as difficult as that is to swallow. I understand everyone's situation is different but I know a lot of seniors who complain about being on CPP but never made smart financial decisions.
Good video Marc. Lots of good info. I only wish that I had started investing earlier in life and invested smarter when I did start. Gotta do the best that I can now and in the future
Contributions to CPP as a percentage of earnings are 5.7% by employees and 5.7% by employers (so 11.4%). To say that you are only contributing 5.7% is somewhat misleading. Of course you should also save on your own and/or participate in your employer's pension or savings plan if they have one. CPP is a solid DB pension plan, guaranteed by the government and inflation indexed, and personally I have chosen to defer taking my CPP until age 70 to maximize the monthly cashflow from that source. There is also OAS and if you qualify GIS (and for sure low income earners will be hard pressed to save much after paying the rent and buying necessities.)
I do not receive the max CPP benefit but other programs top off my income. My house is paid off; I do not need a car and am fine. Do not use credit cards either.
I wish I could give more information. But I double checked my CPP contribution, I still have about 20yrs, but as of now I would get 453/mo at 65. Plus the Current OAS rate of 642.25 and depending on income eligibility, GIS. This does not factor a Pension or TFSA
I will eventually retire and I have known my entire life working for almost 50 years that I would have to save more on the side and have a nest egg built up to assist me above the Canada pension plan. This is not a surprise to anyone my age folks.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
Yes. Self-employed folk must pay both the yourself/employee and employer portions of CPP premiums. The amount payable is calculated on the self-employed person's personal income tax return.
As long as you're paying yourself a salary, Denny, yes, you have to. Some business owners pay themselves via dividends, though, which are not eligible for CPP contributions. - Marc
One of the major problems is also cppd. There is no help for anything no dental medical needs. I am on disability because of medical problems. Cancer twice 5 an 3 years ago. I have mental disability chronic kidney 4
If I was on welfare I would have coverage for medical treatments that I need. It is a struggle but because having to stop work i will be in in real trouble. I was married to the military I was never able to get ahead I've worked most of my life (started age 12). It doesn't seem fair. Just venting there is no way to change my path.
If circumstances require one to work until 70, both OAS and CPP are enhaced 36 % and 42%. working couple who always paid the maximum to CPP can take home 50-60k per year in government pensions. Now is the time to figure out what the future may give you.
Cpp is a raw deal for my generation and the next. The fact is that my 5.7% contribution isn’t all entirely going to fund my future benefit. When Cpp was first implemented, past service benefits were granted to those first retirees that didn’t contribute during the entirety of their working career. So at least 1% of my contributions (2% when adding in the employer contribution) is going to find those past benefits for previous retirees. Inter-generational inequity at its finest!
That’s how it works, but the first recipients that may have benefitted the most all died off 35 years ago. I paid into CPP for over 40 years and now when I collect, it may be some of your contributions helping pay me. Thank you
What if I don't need luxury? What if I don't care about owning nice things? What if I'm happy just paying my bills and surviving? I've lived this way for most of my life. Time matters more to me than "stuff". Can I survive old age living without my own retirement fund? Is this considered "living in poverty"? If so, I can do so quite happily.
While respecting your idealistic view of retirement financing, it is far from realistic. Most people have enough income to sustain their lifestyles with little left over for retirement investing. So unique situations, like mine, places extreme burdens on retirement. I lost my job of 30 years, through no fault of my own. Then had a stroke. All of which occured when I was 50. As years went by I lived on disability cpp and my saving was wiped out. At 64, all disability income was stopped. Now I live on OAS and CPP only.
Sorry to hear of your troubles.. and thanks for sharing with our community. You are a living example of the tough challenges any of us can face unexpectedly. I wish you all the best. Take care. - Marc
Ok, CPP doesn't pay out much but you still get GIS if your income is less then ~ $19,000/year for a single person over 65, for a couple it's around $25,000.
You make it sound like people can actually AFFORD to save. But when rent takes up 60-70% of income and choosing between food and utilities takes up the rest saving is impossible. And that 60-70% is a conservative amount where I live. Homelessness is at a high because people working 2 jobs still can’t afford both food and rent and people working one job can’t afford rent alone
Hi Darlene. You're right that some people are stretched to the max and savings anything extra is next to impossible. In those cases, the OAS and GIS provide extra support. But many people are able to save, of course, and if you're in that camp, my encouragement is to in fact do so. In those cases, people can end up with more to draw from when they retire. Thanks for watching the video and for leaving your comment. - Marc
@@beaviswealth unfortunately I am not in a position to save. I was married to an abuser who sabotaged every job I got for 22 1/2 years. I finally left him when he was incarcerated for sexually abusing my daughter. A few months later my apartment building was sold and I had to move. The place I moved to ended up being condemned and I had to move to a shelter with the 2 kids still living at home. I was there 3 months before I got a place. I decided to go to college to improve my chances of getting a decent job, then ended up graduating during COVID. I haven’t been able to find a job and am stuck on Ontario Works while looking. I live alone now but my income is only $614/month. My rent is subsidized but I still can’t afford 3 meals a day. I just hope I find a job soon but it’s hard at 60 with a bad credit rating thanks to debts run up in my name during the marriage.
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A lot of Canadians think that the Canada Pension Plan will provide a comfortable retirement for them, but that's not what it's designed to do.
In this video, I'll discuss the major things you should be aware of to ensure you are able to prepare properly for your retirement, and the role the CPP will play.
Thank you to Passiv for sponsoring today's video - passiv.com?ref=RGAMTXSUAM
#stockmarket #canada #theinvestingacademy
Really enjoyed the episode, Marc. One of the issue with increasing CPP is that it essentially channels money away from people who already save on their own. More specifically, it reduces the amount they can leave to their beneficiaries. If you pass away relatively young, and the money is in your RRSP, then your estate pays the applicable taxes and the rest goes to your heirs. For money in CPP, your estate receives a small payment (I think it is $2,500 and is taxable) and the rest is gone. So for people who invest on their own without being prompted the increase in CPP is detrimental.
Hey David. Well said. To me a big problem is the loss of benefits in most cases if you die too early. It's a huge reminder of the structure of the program, which is similar to an insurance structure... everyone contributes... some get little to none, others get a lot. Certainly not perfect. - Marc
This is the kind of thing that should be taught in schools how to invest, save and not rely on things like the cpp
Hey Sean. I totally agree. Thanks for watching. - Marc
I am 67 and did plan and save..HOWEVER...in 2016 I recieved 18 tick bites giving me Lyme disease which Canada does nt recognise or treat .instead they reject, neglect and abuse patients !!.After 4 years bedridden , spending retirement savings , losing home , car and still unable to work..I am left begging people for a place to stay so I can spend my CPP on naturopath...
Pay off your house is good advice.
@@dawnadevine1618 But if you have a low mortgage rate your actually better off not to just focus on the house but to also invest your money which will give you more returns 😀
Great episode Marc. So many people are missing knowledge when it comes to CPP and they need to be informed at the youngest age possible!!!. Financial information like this is absolutely needed (and critically so) within our education system. Financial literacy is just necessary if our kids are to be productive and secure in their later years. 👍👍👍
Thanks, Derek. This info might help out some of the more mature crowd, but I'm really hoping it will educate the younger folks and get them off to a better start, and thus a better finish! - Marc
This is a great video I feel everyone in Canada should watch this video and your next video should be about how to protect your savings from inflation and preserve your buying power for your retirement
Thank you for watching, and thanks for the suggestion for a future video. Take care. - Marc
Brendan, having your dad join your channel is not only genius, but also going to save a generation of millennials who do not have the benefit of a parent to show them the way.
Thank you!!!
Thanks, Sarah. Appreciate your kind words. - Marc
Great if you have enough income to save but for most by the time you pay either mortgage or rent and utilities there is nothing left when average income is around 24 hundred dollars per month and rent or mortgage and utilities is 2 thousand per month and then you need food and after that there is nothing left to put away for retirement
I feel like this was a more important video than the title. I am 27 and have been saving because of this knowledge. The facts have time and time dollar cost averaging into good quality ETFs or stocks will generate income for the future
Hey Chris. Bravo for doing your part and being proactive. Really appreciate you watching the channel. - Marc
Hello Marc (and Brandon). This was a great video in providing information about CPP and its relation to retirement for the younger generation. The challenge I find with my young adult children is that they are not financially literate and not interested in these important topics when compared with other things on social media. They live in the present and not really thinking of the future. Personally, I find it fascinating (I just recently retired). I have been watching your channel for a while and I really trust the information that you both provide. Great job and future success with the channel and Academy.
Hi Benny. Thank you very much for your comment. You are so right with the challenge we have educating the younger generation in particular, but it's certainly not limited to that demographic. Overall, we as a society should do a better job of promoting financial literacy, but as you point out, we're certainly lacking in that department. Really happy you're finding value in watching our videos, and thanks for your support. - Marc
Ever since Marc gets involved in this channel this becomes more educational then ever before.
Thanks so much. Appreciate your comment. - Marc
I'm a disabled veteran that gets an income replacement benefit plus other top-ups, and have received it for well over a decade now; however, CPP isn't deducted. To counteract the lack of CPP in retirement I've maximized my RRSP and TFSA. And I've managed to invest 69% of my income because I live WAY below my means. I've decided to forgo all comforts now for a better life when I'm more incapacitated due to old age. LOL, I hope I don't have a dirt nap when I start enjoying the fruits of my long-term planning!
Thank you again Mark! Videos like this are so great for the community. You are adding so much value to peoples’ lives simply through your education and experience. These are the type of lessons that hopefully can reach more people so that future generations and our society as a whole can prosper.
Thank you so much for your comments, John. Thanks for supporting our channel. - Marc
Don't have any debt when you retire. That should be your goal. Once your debt free, life truly isn't that expensive or difficult.
Great goal to have and it sure helps with cash flow. Thanks. - Marc
Great video Marc. this helps a lot of people, that don't have personal savings and just rely on CPP.
Hi I need help with my cpp. Iam 64. Not 65 yet. When do I apply.
Thanks. Hopefully this will bring that to their attention and motivate some investing. - Marc
I am not a big fan of CPP.. but I do understand why it exists.. Marc we have tons of other problems that compound the issue of poverty.. like government overcrowding of the private sector, high cost of regulations, bloated public sector, raging inflation, population addicted to material consumption and an environment in general that discourages investment and growth.. unless we start tackling these issues, we won’t have a turnaround on the poverty issue and this needs a mindset change.. I admire and share your optimism and your efforts to educate people as the deeper we go the more efforts the individual needs to do to stay afloat
thanks Marc! Glad I have been contributing and have a plan through work.
Great episode! This is key knowledge that I wish i had 20 years ago.
I wish, there was Y-Tube when I was younger...Thanks for the video!
You're welcome. I agree that more access to this type of info a long time ago would have been a huge benefit! - Marc
Marc, you are wise and kind. This is an extremely important video. I wish more people see it. I love love this channel. I'll consider the retirement course!
Thank you so much.. I really appreciate your kind comment. Take care. - Marc
CPP should be a non taxable benefit for low income retirees. This threshold should be 45k for individuals & 90k for couples.
That sure would be nice for lower income earnings, but the threshold will be much lower than the $45k/$90k levels you're suggesting. It's pretty tough to scrape by for a lot of people. Thanks for watching the video. - Marc
THE MOST EYE OPENING ViDEO EVER. I am doing my part !!! Thanks to u two.. and I am doubling down lol my monthly contribution.
Hi Carol! Thanks for your comment, and keep it up! - Marc
I believe the 10% savings rule is supposed to be based on top of CPp and OAS. These benefits were put in place to subsidize one’s retirement, not completely provide it.
Always appreciate your videos Mark. I have many friends who have no pension savings and try to nag them as much as I can go get started ASAP!
Damn I try to do this to my friends and they don't want to hear it.
Good effort on the 'nagging', but ya, not everyone wants to know, right? Thanks for watching! - Marc
In my experience people will only do what they WANT to do, nagging is useless and uses up your positive energy.
@@hollyclark690 haha fair I don't mean nagging constantly or anything, more just make a point of trying to make sure they have a plan. Definitely people will only do what they wanna do 🙂
Because I waited until age 70 to collect my CPP I am receiving $1,755/ Mo or $21k per year. I only contributed $40,842 over 43 years so I will get my total principal back minus interest in less than two years. I will receive $1,073,112 in CPP if I live to 100 which my Dr says is very likely. There is no way I have the skills to convert $41k into $1M. I supplemented my Retirement with my RRSP meltdown until age 70. I retired at 60. If I had known Covid was coming I would have differed my OAS in Jan 2019 as well to gain an extra 36% +. That is because I spent very little money from Jan 2020 to May 2024. I went on my 1st road trip across Canada since the pandemic just these past two months.
It bothers me when people slag the CPP. It is one of the World's best managed Pension Plans. I have no fear of it running out of money in my lifetime. I will enjoy spending my extra $million$.
Thanks for sharing your story.
Great video we need more information about our personal finance hear in Canada especially investing for our retirement good job god bless
Thanks for watching and for taking the time to leave your comment. Cheers. - Marc
Many people fail to save adequately for retirement. This is not because everyone is a spendthrift. It's because the cost of living has increased exponentially (think housing), medications, food, insurance, etc. They work at jobs in which real wages have not increased to align with the cost of living. They do not have adequate benefits. They choose between taking their kids to the dentist and putting food on the table. How are they supposed to save for retirement?? Many will be working until they die, just like in the past. Extreme wealth disparity is real in Canada and elsewhere.
Yep. Trickle down economics has created the devaluation of earnings and the stagnation of many wages.
This is a very good video. I will be sharing with my kids. Thanks!
Thanks, so much, Grant. Appreciate that. - Marc
CPP has been bothering me for the last year + now, knowing how high cost of living has become and how low many wages are. A lot of people seem to be relying on CPP for retirement. I think there should be some basic finance taught in highschools, when I was there in 2013 there was none (Ontario). The best we had was one of our math teachers took 30 min to explain interest rates/how to use a credit card etc (she was an amazing teacher, truly cared). Half the class paid 0 attention because she said it was not in the curriculum/wont be tested on it. I fell that many countries are far ahead of us on this matter. Thank you for the distilled information and your views! Hopefully this helps more Canadians retire comfortably!
Inflation, carbon taxes, other gov. taxation, gov. debt, high interest rates, the cost of living eat away the buying power of the dollar and pretty soon you have a currency that is worthless, just look at the price of gasoline today. Hard assets to me are the only way to go.
This is why I look in amazement at these young ones deciding not to work and keeping all they make as a side hustle to travel.
True eh? I hope they learn about the long term affects of their decisions today. Take care. - Marc
Great content, thanks father & son for your efforts 🙏
Excellent advise. I have made my own pension plan with the help of an advisor since I don’t have one through my employer. I always say do with a little less now and your investments will give you a little more in the future when needed. With the rate or inflation lately, it definitely does make it more difficult.
All I know is with the Cost of living along with inflation. NO ONE IS RETIREING
Oh man.... we can agree to disagree about retiring, but that's ok! - Marc
Oh there are a lot retiring even before 60, but they are the lucky ones that sold properties that were worth only a 150K decades ago for a million plus.
That's like being on ODSP. All these social support programs need to start at the poverty line and add the inflation rate and work from there. People on ODSP may have additional support required. People on OW need a transit pass to facilitate job search. But it must all start at the poverty line.
thanks for the video marc! always appreciate the knowledge.
My pleasure, and thanks for watching, as always. - Marc
we decided to take a different route by buying an income property. plan is to sell off our principal residence on retirement and move into the income property continuing to rent 2 units while being mortgage free. some investments and rrsp's but didn't start early enough!
So many friends who are now in their 50's and realizing all those "under the table" jobs over the years were not all that. No one I talked to have any real savings, emergency fund or mortgage. Many live in basement apartments and drive old cars. So sad. It's going to be catastrophic sadly. More Gen X didn't invest than I ever realized.😬
Canada pension is starvation pensions. Canadian government has money for corporate welfare and wars, but there no money for seniors and disabled Canadian
Thanks Marc. I am a new investor, was always a saver but of course had no economic education and did think that CPP was a retirement income, also that TFSA and RRSP were just the same type of account as my savings but with a fancy name. Thanks to you guys, when I started investigating about investments I have been educated, hopefully not too late! Thankfully I did buy a house so at least some equity has been built up over the last 20 years.
You're welcome Kelley... we really appreciate your strong support of our channel and are glad you're seeing some benefit. Keep it up. - Marc
You're right Marc. Much of my money was spent on Booze , drugs and women. The rest I just wasted !
Better education is definitely needed. Thx
Classic! - Marc
Your priorities are all wrong, a more rational, proportionate approach is required-wine, women and song is the way to go
Raising the rates also has the effect of transferring wealth from high-income earners to lower-income earners and providing more equality throughout society. With more low income earners having more money they can spend it and this cycles back to enhancing high-income earners income.
We can make a law that you need to put money into an investment account that can not be withdrawn till 60... and avoid cpp issues and government bs management. This has been done in other developed countries.
I'd love that option, with investment safeguards and mandatory contributions, similar to the CPP. - Marc
More laws are not what's needed.
@@beaviswealth really ? You want the government even more on your business? People have to learn to think for themselves and not rely on the government to babysit them !those f'ers aren't getting any more control over me.
Trudope just got a $ 21,000.00 raise as of April 1/2022.That is more then a seniors makes a year on CPP and OAS.I wonder what is cheaper then dog food.
Agree wholeheartedly Marc you are amazing and I am learning so much from these videos
Thank you for watching, and I'm glad you're learning! Cheers. - Marc
Such great information !
Thanks, Magnus. Cheers. - Marc
Hi just a comment on the 5.7% contribution. It's a combination of employee and employer so only half is out of pocket (2.85) so need to save more than 4.3. The young folks need to hear this message because they will likely not have access to company pension benefits. I have drummed this in to my 25 year old daughter for a number of years. She is in her last year of university and had worked for the last 8 years. She has accumulated over 25k in her TFSA and learned the habit of saving 10% or more of her pay.
Hi Al. Marc is correct the 2022 CPP contribution rate is 5.7% for the employee. The employer also contributes 5.7%. The total CPP contribution rate is 11.4% up to the maximum annual pensionable earnings amount.
Hi Al. The 5.7% is both employee and employer, for a total of 11.4%. I agree the younger crowd can benefit most from understanding how this works, and hopefully it will help a few prepare for a better retirement. Thanks for supporting your daughter and it sounds like she's off to a great start. Cheers. - Marc
Do you know if a grandparent leave a mortgage for her grandson and he cant afford the mortgage is it better to sell?
This is a great video. What happens if you contribute to CPP your whole life and all of sudden you pass away before you retire. Say for instance you plan to retire at 65 and you pass away at 64, what happens to all those payments you made over the last 40+ years?
Your family can apply for a $2500 one time CPP Death benefit. Your spouse and children "may" be eligible for a Survivors benefit
Hi Jason. Sadly, in most cases the death benefit is all you'll get. As @jasonmcgrainger says, there are exceptions, but they aren't the norm. - Marc
@@beaviswealth It is sad that you are paying into a program your whole life and your loved ones only get $2500 out out of possible tens of thousands that you paid into the program. That is government for you :)
My daughter died and did put into CPP since young CPP issued 2,500 death benefit I wish they gave at least 20 percent monthly to her sister. Its a rip off.
Everyone in the USA are so focused on their Roth IRA and other savings types. Here in Canada young people seem oblivious about retirement and how they will support themselves when they are aged. So each province has to supplement them in order for them to survive. We need to start talking about savings for retirement in school.
Fully agree... we should be teaching far more financial skills earlier in life... it would have huge payoffs over time. Thanks for your comment. - Marc
I believe we were all the same in our youth.Life seemed to stretch out endlessly.
The best part of the CPP is that it is near bond like in its payouts, it will rise with inflation, the actuaries says that the CPP will be in good shape for decades to come, and that it can be a very imoprtant and predictable part of your income. With good tax planning, it can be even more valuable to the retiree
Hi Richard. I do agree the program is very stable and reliable. As you note.. planning is a key. Thanks. - Marc
There are very few if any work place pensions while taxes decrease to employers !
How does the CPP alleviate my poverty if I receive $168.70 and my rent is $1283? And what about food, etc.?
Are you on CPP disability?
@@rps1689 No.
@@arlenegojocco7518 Then you mustn't have been employed much or self employed. as you claim you only get 168.70.
@@rps1689 Arrived 2007. Worked from 2008-2021.
Hello! Any videos on GIA’s? Are they worth it
Great video, and a good reality check.
I do feel that another part of the story is fractional reserve banking and how it creates the debt that exists, the inflation that exists is also critical as a reminder because I would say a lot of people aren't conscious of it. Then there's the largest wealth transfer in history that happened during the pandemic. It wasn't by accident.
People can still make it, and I say that as a person who doesn't have his retirement planned out yet (it's definitely a scary thought and reality), but it's also a fact that a lot of people cannot make it by default. If people who make less than a living wage can't invest anything, are living paycheck to paycheck, while their salaries aren't keeping up with inflation, that also creates other problems in society such as the mental health crisis, drug, alcohol, tobacco addictions, addictions to other vices.. etc. Dysfunction in the family unit where abuse starts to take place. A loss of purpose in life which demoralizes the emotional/psychological self. And of course, it all affects the moral fabric in communities and in society in general. All of this isn't by accident either.
Some people may say that I'm thinking too much into it, but if you ask "why" this happens, it comes down to money and the lack of it. I mean a large number of divorces are because of financial problems of some form. People's actions in their daily life are based around money. Of course, there are people who simply waste money, but there's a component of an obsessive compulsive element to that, so it's subjective.
Very deep and insightful comment, thanks. You've highlighted so many of the problems. - Marc
@@beaviswealth Even though I don't have my own retirement in order, and we are all on the journey of learning, I'm trying to connect the dots the best I can in order to make something of my retirement years.
Most people out there are working jobs that they don't like, or worse, dread working just to survive. That's also a contributing factor in why people can't make it.
Great video and sound advice, but a lot of people can't set aside 10% of their monthly income because they are barely making ends meet each month.
Pay yourself first, then your bills, and your wants should be the very last thing on your agenda. It doesn't hurt for your kids to get jobs and put themselves through school, while you get going investing for your own retirement.
Rate of rent outruns benefits and pension. BoC is paying banks, with a few middle men taking a vig.
Yup,I got disabled and put on cpp disability,I literally walked from Alberta to nova Scotia,looking at rent all the way,I couldn't afford rent anywhere in Canada,10 years in a tent,year round, no housing for me,no additional Benita,took me 10 years to get aish and finally get out of the woods,foods still a problem
Wow... what a story. Thanks for sharing and all the best. - Marc
Real estate in Canada has destroyed the economy. There will be a retirement crisis because of this gross misallocation of resources.
Tax policies over the years that have made houses and condos a must for an investment vehicle is taking its toll on society. Should never have allowed only half of the capital gains subject to taxation on non primary residences especially to foreign speculators.
I wish my parents educated me about some basic money - now im older and started late I have to catch up. - for sure im going to educate my Son on the benefits
Totally agree that our society needs to improve the money skills passed down through the generations. Hopefully this type of thing will help. Thanks to you for helping your son get a head start. - Marc
Thanks Marc. CPP is for the few that had no future plans of wealth... one day at a time
mentality 🤗 “Be Happy, Money grows on trees”. Thank you government 😏
If you want to be truly wealthy at 65, you must plan at age 19. First and far most a Savings for down payment on your first home. Build equity. Borrow on equity. Invest equity into business. Work hard, think smart, Survive on diversity. At 65 your tiny little CPP amount won’t matter much 😉
Thank you for a great comment and superb advice. Appreciate you watching the video, and then taking the time to comment. Cheers. - Marc
Gran video Marc, esa es la razón porque comencé a invertir! Siempre necesitamos dinero y yo no quiero trabajar hasta los 80! Todas las personas necesitan incrementa tus ganancias, evita demasiados gastos e invierte el dinero, podemos disfrutar ahora, por supuesto, pero tratando de ahorrar lo más posible.
"Great video Marc, that's the reason because I started to invest! We need always money and I don't want to work until 80! All of the people need increase your profits, avoid too many expenses and invest the money, we can enjoy now, of course, but trying to save as much as possible."
Wise words, como siempre. - Marc
How much you can save and invest when living expenses (shelter, food etc. )is so high. For example average rent in Vancouver for one bedroom apartment is $2000 +food +utilities+ car etc. say total around $3500.If you work for $30 per hour you making $4800 per month after deductions for tax ;medical; pension etc. you can't safe nothing and people working for minimum wage are in more worse situation. Working as emigrant for 30 years supporting kids and society, when you retiring (averaging $50,000 per year )you will get $800 working pension + $500 OAS +$200 to $400 Supplement totally around $1500 to $1700 in same time person that is born in Canada newer work when is 65 year old will get full OAS($600) and supplement of $800 or $900, totally around $1400 to $1500 + shelter .So in Canada working people paying taxes are in the worse situation when they retiring. The best solution will be if every Canadian 65 years old receive minimum pension of $1500 (people newer work receiving today )and people that work receive as bonus their working pension (average $700) plus affordable shelter and reduced cost of medication. Working people supporting this country and society deserve at list that. Canada is reach country helping everybody aboard (billions dollars) but it seems can't help own older citizens, especially people that worked at list most of life.
The government has destroyed the Canadian economy with QE. Housing is out of control because the government wanted it to happen.
Why bother working hard and contributing more? The lower-income earners can actually make same amount of money that they make before retirement with the OAS (maximum monthly $687.56 age 65 to 74, and $756.32 age 75+) and GIS (maximum monthly $1,026.96 in 2023). If you're single, widowed or divorced, and your individual income is below $20,832 annually, you'd receive the maximum monthly payment of GIS. That is more than the average CPP Canadians can get and a little short of the maximum CPP of $1,306.57 in 2023. If your annual income is below $20000, it seems to me that you can live a rather comfortable retirement life. 🙂
We'll for one those systems might not be in place or change in 20-30 years. So best to have your own safety net.
If you have put in for 40 yrs and a 5 percent return , you would have a good monthly amt . Can i challenge the cdn govt and get my portion?
Canadian government should provide. I have heard that retirement means homelessness. But didn't believe it until now that I am retired. Shame on government
Those who are able should be responsible for themselves
Yes SHAME on them..needs to be taught in schools. Most men abandon their wives or leech off women.
thank you.
You bet, Max. Glad you found the video and thanks for watching. - Marc
I think I’ll just be working for life since my CPP is very little and I have no pension plan, I’ve always lived pay to pay. God be my helper!
All the best. Thanks for taking the time to comment. - Marc
It's crazy and terrible the way Canadian government calculate my CPP after 32 years of work I only get $480 at 60 years old. They should dont consider 30 years ago the rates per hour is $ 8.50 -10.50 hour. They calculate how much CPP you contribute. Now the minimum per hour is $16, and up.
You get penalized for collecting CPP at 60 by a 36 percent reduction.
Great info I feal sorry for people working at minimum wages.How will they ever save ?How will they ever get excited about thier futures?
Hi Bryan. Ya, it's tough out there for so many. Thanks for watching. - Marc
Life expectancy is realistically longer than 80, because that statistic also accounts for younger people dying (eg. a 5 year old getting cancer, 25 year old killed in car crash, 40 year old dying of a brain aneurism etc). But when it comes to actual years of retirement we really need only look at people that reach their 60s and how likely they are to live to a certain age. I forget the numbers, but if you live to age 65 you have a very good chance of living much past 80. So it's even more important for people to plan to live long lives when they are calculating how much they will need for retirement. I hope that made sense to people.
Interesting point. Using current tables, Life expectancy from birth is actually 80, But, as you point out, if you are surviving at 60, life expectancy from that point on for males is 80.5, females 84.9. If you live to 65, it goes to 81.7 for men, 85.8 for women. Thanks for your comment. - Marc
@@beaviswealth thanks for checking the numbers and thanks for the video :)
Why, in the name of God, is the CPP taxed ! To get a refund, I need to have at least 27% taken off for tax, what's the point ?
If CPP is designed to keep us out of poverty why is it so far below the poverty line? The poverty line is a good line to draw the limit at. Anyone living below the poverty line should be raised to the poverty line plus the inflation rate and then it should be indexed.
Is it better to contribute to CPP or just invest it to your RRSP?
If you're an employee, CPP contributions are mandatory. If you're self-employed, you can avoid taking salary and paying into CPP, but that has other concerns that have to be considered. - Marc
Marc, you have #1 twice in your timestamp description
Thanks for pointing the out, Ren. Should be all fixed up now. 👍- Marc
Thanks again for the knowledge you and you son passes on. Thanks a million$ one day lol. Much love Saskatchewan Canada 🇨🇦
Hey Chad... I appreciate your words, and thanks to you for watching our channel. Nice to have you here. - Marc
@@beaviswealth no thank your and your family for teaching us these things reguarding fiancé and trading. Ausome of you all
Great info for the young, but useless for people that are actually trying to find ways to survive on government pension.
For some one that can only save 10 a week what would be a good investment?
Comic books.
I guess I'm lucky...I have a DBP plus CPP plus OAS!
With more and more employers getting rid of, or never having pension plans available, it's tough to save for retirement, especially when good advice hard to come by. Everyone is a salesman.Even though the market still has the potential to drop,at retirement time, leaving you with nothing, mutual funds are still the best bet. Personally, I believe that lower income earners would benefit most, from the TFSA plan, mainly, because what you withdraw, from your TFSA, isn't counted as income, so nothing gets clawed back. One just has to hope that the TFSA grows into something substantial.
A TFSA can be put into a low risk market utilities GIC. The longer locked in the better. One of mine just matured after 3 years and got a 18 percent return. Now that same type of GIC is offering a lesser minimum and maximum return now for some reason; just waiting for better rates to show up. I was told to wait for the late spring or summer, as that is when rates are usually better.
@@rps1689 I've never heard of that. GIC's don't pay jack, so to speak.
@@robertmaxa6631 They do very well under locked in low risk market utilities, but the catch is a minimum of three year lock in is required. And if you want to cash in before maturity, the penalty is severe and cuts into your principle in the first two years. My second GIC matures at the end to the year and I have accrued a total of 10 percent return so far even though it's min guaranteed rate is 0.4986 and looks like it will make the maximum of 15.5 percent at maturity. Of all the GICs I have got, all exceed the minimum return guaranteed. and most of them close to the maximum return amount in the last five years. I'm not getting any new utility GICs for now, as the banks are only offering a maximum return of 10%. and a minimum guarantee of 0.01.
Thanks for your comment, Robert. Cheers. - Marc
@@rps1689 That's a very respectable return, but, it's money you can't readily access. Out of sight, out of mind I guess. Thanks for the info.
I would be interested in seeing a video on RDSP (Registered Disability Savings Plan) and how to make the most of it. I understand it may not be relevant to the majority of your audience. I have a child who has type 1 diabetes and qualify for this account and grant from Canadian government.
Go to any bank, they can help to open it. It is similar to RESP, the difference is government matches more.
Are you saying the bottom 20% is not saving for retirement because of cpp etc? I have been in that lower 20% and it’s meeting day to day needs. I needed that $200 a month for food and rent, no room for a retirement plan, as important as I knew that was. I agree we can all do better, but it is just not always possible.
Hi Robert. Not at all. I'm sure 99% of the reason the lower income group doesn't save is because there's nothing left over at the end of the month. That's the big challenge. For those who do have room, I think it's good to encourage a higher savings rate if possible. Always appreciate your support of the channel. Thanks. - Marc
@@beaviswealth ok. There seemed to be an argument there that if the benefits were increased, the next 20% income group wouldn't save for retirement either, which made it sound like it was choice, which can easily slide into 'blaming the victim' territory, if you know what I mean. A lot of this should be taught in elementary and high school ( and at home if possible), so we have the skills to be able to act in our own interests vs being the consumer we are all trained to be, in a lot of ways. Capitalism requires consumers, but it also requires people who generate income, too.
CPP isn't meant to retire on. You should have your home paid off (if wise) and a nest egg or retirement fund. Please be wise with your money! Thankfully there are a lot of jobs available and still options for seniors in the workforce as difficult as that is to swallow. I understand everyone's situation is different but I know a lot of seniors who complain about being on CPP but never made smart financial decisions.
Good video Marc. Lots of good info. I only wish that I had started investing earlier in life and invested smarter when I did start. Gotta do the best that I can now and in the future
Thanks. I think we all wish we would have started earlier, you're right. Let's work on that next generation! - Marc
Contributions to CPP as a percentage of earnings are 5.7% by employees and 5.7% by employers (so 11.4%). To say that you are only contributing 5.7% is somewhat misleading. Of course you should also save on your own and/or participate in your employer's pension or savings plan if they have one. CPP is a solid DB pension plan, guaranteed by the government and inflation indexed, and personally I have chosen to defer taking my CPP until age 70 to maximize the monthly cashflow from that source. There is also OAS and if you qualify GIS (and for sure low income earners will be hard pressed to save much after paying the rent and buying necessities.)
I do not receive the max CPP benefit but other programs top off my income. My house is paid off; I do not need a car and am fine. Do not use credit cards either.
Sounds like you've got it figured out, Dawna. Thanks for commenting. - Marc
I live in a city, Where Judy LaMarsh was from and have been in the building named after her. To see what she was able to accomplish is good
Too cool. thanks for watching! - Marc
I wish I could give more information. But I double checked my CPP contribution, I still have about 20yrs, but as of now I would get 453/mo at 65. Plus the Current OAS rate of 642.25 and depending on income eligibility, GIS. This does not factor a Pension or TFSA
I will eventually retire and I have known my entire life working for almost 50 years that I would have to save more on the side and have a nest egg built up to assist me above the Canada pension plan. This is not a surprise to anyone my age folks.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
Im in the process of becoming self employed starting my own company. Would I still be able to contribute to CPP as a sole proprietor?
Yes. Self-employed folk must pay both the yourself/employee and employer portions of CPP premiums. The amount payable is calculated on the self-employed person's personal income tax return.
As long as you're paying yourself a salary, Denny, yes, you have to. Some business owners pay themselves via dividends, though, which are not eligible for CPP contributions. - Marc
One of the major problems is also cppd. There is no help for anything no dental medical needs. I am on disability because of medical problems. Cancer twice 5 an 3 years ago. I have mental disability chronic kidney 4
And chronic pain because of my work I did.
If I was on welfare I would have coverage for medical treatments that I need. It is a struggle but because having to stop work i will be in in real trouble. I was married to the military I was never able to get ahead I've worked most of my life (started age 12). It doesn't seem fair. Just venting there is no way to change my path.
Sorry to hear of your health troubles, Katherine. All the best. - Marc
For most people living paycheck to paycheck there is no money to put away or to invest period
That is true... a lot struggle and can't save. - Marc
If circumstances require one to work until 70, both OAS and CPP are enhaced 36 % and 42%. working couple who always paid the maximum to CPP can take home 50-60k per year in government pensions. Now is the time to figure out what the future may give you.
Us soc ser was not to give you all the retirement income you will need
CPP is meant to be "pocket changes" during your retirement years. Kudos to those who think that they can survive on that.
Cpp is a raw deal for my generation and the next. The fact is that my 5.7% contribution isn’t all entirely going to fund my future benefit. When Cpp was first implemented, past service benefits were granted to those first retirees that didn’t contribute during the entirety of their working career. So at least 1% of my contributions (2% when adding in the employer contribution) is going to find those past benefits for previous retirees. Inter-generational inequity at its finest!
That’s how it works, but the first recipients that may have benefitted the most all died off 35 years ago. I paid into CPP for over 40 years and now when I collect, it may be some of your contributions helping pay me. Thank you
What if I don't need luxury? What if I don't care about owning nice things? What if I'm happy just paying my bills and surviving? I've lived this way for most of my life. Time matters more to me than "stuff". Can I survive old age living without my own retirement fund? Is this considered "living in poverty"? If so, I can do so quite happily.
Hi Neal. Without a doubt, if you're retirement goals are more modest, you'll need less income. Hope all is well. - Marc
I wish I had this info 30 years ago
Oh yes... if only we could turn back the hands of time, right? 🙂Thanks for watching. - Marc
Less than 300 dollars after tax, disgusting. My friend retired lately. She has savings, but 40 years working in canada and this is it.
Shame on government that retirees leaves on the streets. Shame
While respecting your idealistic view of retirement financing, it is far from realistic. Most people have enough income to sustain their lifestyles with little left over for retirement investing. So unique situations, like mine, places extreme burdens on retirement. I lost my job of 30 years, through no fault of my own. Then had a stroke. All of which occured when I was 50. As years went by I lived on disability cpp and my saving was wiped out. At 64, all disability income was stopped. Now I live on OAS and CPP only.
Sorry to hear of your troubles.. and thanks for sharing with our community. You are a living example of the tough challenges any of us can face unexpectedly. I wish you all the best. Take care. - Marc
Ok, CPP doesn't pay out much but you still get GIS if your income is less then ~ $19,000/year for a single person over 65, for a couple it's around $25,000.
Exactly... That's a part of the safety net for low income earners. Thanks for watching. - Marc
You make it sound like people can actually AFFORD to save. But when rent takes up 60-70% of income and choosing between food and utilities takes up the rest saving is impossible. And that 60-70% is a conservative amount where I live. Homelessness is at a high because people working 2 jobs still can’t afford both food and rent and people working one job can’t afford rent alone
Hi Darlene. You're right that some people are stretched to the max and savings anything extra is next to impossible. In those cases, the OAS and GIS provide extra support. But many people are able to save, of course, and if you're in that camp, my encouragement is to in fact do so. In those cases, people can end up with more to draw from when they retire. Thanks for watching the video and for leaving your comment. - Marc
@@beaviswealth unfortunately I am not in a position to save. I was married to an abuser who sabotaged every job I got for 22 1/2 years. I finally left him when he was incarcerated for sexually abusing my daughter. A few months later my apartment building was sold and I had to move. The place I moved to ended up being condemned and I had to move to a shelter with the 2 kids still living at home. I was there 3 months before I got a place. I decided to go to college to improve my chances of getting a decent job, then ended up graduating during COVID. I haven’t been able to find a job and am stuck on Ontario Works while looking. I live alone now but my income is only $614/month. My rent is subsidized but I still can’t afford 3 meals a day. I just hope I find a job soon but it’s hard at 60 with a bad credit rating thanks to debts run up in my name during the marriage.