My 2cents is stop working as soon as you can , don’t work anymore then you have to and Take what ever you can as soon as you can . I seen so many people die within a couple years of retirement after staying late because their going to live forever and there’s never enough money. Or your going to end up in some home that’s taking 75% of your pension while you share a room with someone who never worked a day in his life. Enjoy your retirement as soon as you can .
I took it at 60, because it allowed me to afford to work 4 days (32 hours) per week instead of 5 days(40 hours), right up until I retired at 64 due to COVID layoffs. Constant 3-day weekends makes for a much better work/life balance.
@@smorgdonkey ... and beyond. Retirement improved my quality of life much more. Note: I took CPP at 60, but because I was still working and paying into it, my CPP income was steadily increasing during those 4 years.
I plan on retiring next year at 50 years old. But not in Canada because our cost of living is ridiculous. I will live in Asia at a cost of 1500 CAD a month 3x less than Canada.
Good, you can go back to China and retire there. Don't come back to Canada that will make the air quality in Canada better with less 2 people breathing here 😄
Assuming you can retire at 60, the most critical factor is how much more "useful" the money is from 60-70 versus 70-80. I had an acquaintance tell me that his 60th birthday was awesome since he still felt really fit and ready to really enjoy retirement, he also said his 70th birthday was _completely_ different, with age really starting to become "noticeable". He was still very able-bodied at 72, but he said there is absolutely no comparison to 62! Past 60, age-related effects are an *exponential* curve, so don't kid yourself into thinking that 40-60 is _at all_ the same as 60-80.
I agree with that. There’s life span and health span to consider in retirement. Average retirement life span is about 28 years. How many of those are active years?
I took my CPP @ 62. Reason: I am still working and am forced to pay CPP premiums until 65...with no increase my future CPP benefit! If I don't collect, I send about ~$20K in premiums out the window by age 65. Collecting ($10,245 in 2022) gives me needed income now, and allows me to start building the post-retirement benefit (PRB) which generated an additional $710 annually in 2022 and maybe up to $1500 annually by age 65 which offsets a good chunk of the original penalty. The overall penalty averages out to about ~$1500/yr if I live to 80 and my wife collects the survivor benefit for 5 more years. Worth it.
I once read about taking early CPP and it was put this way: They took an example of twins. Both earned pretty much the same throughout their lives and both had about equal net worth. One took early pension and the other did not. The one who did not take it early took 13 years to receive the amount the other did. Take it early since we don't know how long we've got.
The example I posted above shows the growth of the roughly 40 K at 3, 4 and 5 percent. which is left to grow and added to the running sum of money collected after 65. You can see the 3 percent rate breaks even at 76, the 4 percent breaks even at almost 79 and 5 percent always exceeds. Add to that any possibility of growth if that money is in the market or ETF and its easy to see that investing the 60-65 money will outperform... Now I'm using some rough and probably incorrect assumptions about the 60 and 65 year old pension rates... Use your own values to confirm.
I think the decision is case by case .. life expectancy is one piece .. retirement timing .. need for the money (semi-retirement) .. taxes (if there’s enough RRSP contribution room) .. RRSP performance (if I contribute all CPP that I receive before retirement, how much more / month will I be able to take out after retirement) .. etc
Hi I'm thinking about taking my CPP early as well and will continue to work til I'm 63 at the same job which I have been working in for 36 years and paying max amount for most of those years - I had children and had an industrial accident so my contributions were less those years. I was told my CPP now would be around $850 pm. Since I had my work place accident and collect WCB for 1 day a week, my earnings at my job are less and they increased the yearly earnings for max amount I no longer pay max amount into CPP. I missed it by $400. last year and $1200. in 2021. I still collect over the minimum amount to pay max with my WCB and my job but WCB doesnt pay into CPP. Yup I got screwed. So my question to you is how much did it affect your CPP between age 60 and 63 when you retired? Did you continue to pay max amount and how much of a difference did those 3 years make when they calculated the 3 extra years into your CPP when you retired at 63? Sorry to be so long winded.
Excellent advice, I started collecting at 61.5 , at age 64 I sold my company money in the bank two months later Cancer ,chemo ,radiation , surgery ,today I am 68 o. ..k I am not going to make it to 85 plus at 85 one don’t need as much as in his sixties on top most people are afraid to spend the worry about their grand children . I have seen interviews on Tv when people are getting extra help from government and they are passing it to their grand children who are running around with a thousand dollar cell phones . I am not giving advice but I also don’t want to listen to complaints about pensions.
David . in my opinion , taking CPP at 60 does not incur a reduction ( of 36% ) on the total amount showing at the end of the graph . in fact , the word “reduction” here is misleading , simply because you do not talk about the PRESENT VALUE of money . Please look at your graph at minute 5:27 and see what happens between age 60 and 73 , and all the money cashed in during those 13 crucial years . Crucial because money has a lot more value in that timeline than in the future . Also , the person who started getting money at age 60 did just that : started getting money !! and 5 or 10 years more than their counterparts . That is a lot of money compared to no money at all till age 65 or 70 . Not to forget , with age , quality of life also deteriorates , there is no way around that .. much like the purchasing power of money .. Who cares about the total amount received by the end of the graph which depicts the end of one’s lifetime , providing the individual actually lives that long and does not get hit by a bus , besides all the other probability and statistical challenges or negative odds that the individual is facing . I say live your life now . It would be interesting to see a graph that shows how misleading statistical graphs can be . This is my opinion . I am not an accountant or a professional financial planner , but I believe it is important to clearly explain to your audience the present value of money , the ever diluting purchasing power of currency , the trailing lagging index that our government portrays as the ultimate solution to inflation ( CPP GIS OAS ) . At this rate , many Canadian pensioners will never be able to make ends meet because the real purchasing power of money needed for say food , accommodation , energy is much much lower than any graph based on statistics and theory presents . just saying Thank you for your attention
I don’t have much of a pension so I’m using rsp’s from 61 - 65 , taking as much out as possible to keep me in the lowest tax bracket. From age 65 - 69 I’m going to collect my small pension, oas and gis, using a little from my tfsa to supplement (tfsa is not considered income so it won’t affect my gis amount), then at 70 I will shift to the highest payout of all with my cpp. Cpp increases 8% per year by not taking it, great return on your money.
Another bigger factor is COL. I had 2 live in a high renyt area 2 retauin employment BUT when I retired 2 Elliot Lake ON, I reduced my COL by 400%, hence, a huge "raise"! Plus, lower stress, finasncial/economic/stress. PLUS, I just happened 2 retire 2 "God's country" a yr b4 covid hit!
My philosophy is take CPP early if you really need the money to make ends meet,, or take it early if you DON'T need the money and you want to invest it or play with it. If you're not sure, wait and take it later.
Another think that is never discussed is the survivor benefit with CPP. I was 60 and my wife was 59. She had breast cancer and would probably die. I phoned SC and discussed my options knowing my wife was going to die in the next few months. In simple numbers if I took CPP at 60, 65, & 70 I'd get $600/$1000/$1400 per month assuming my wife would also get her max CPP since she was fully paid up. Since it was pretty sure my wife was going to pass and I would get a survivor benefit which would be about 40% of her CPP. So I figured at 65 I'd get $1400 per month. But the agent told me at 65 there is a max benefit payout of $1100 (round numbers) so the this all I'd get and the govt would keep the rest. So taking CPP at 60 made more sense because I'd get my $600 plus the 40% death benefit and even then, they would still claw back $25 per month. So if either of you and your spouse is terminal take the pension early. I asked why that max payout number isn't published but didn't get an answer - because they didn't really want people to know about the claw back.
My husband passed at 52. I didn't know anything about CPP but got the survivor benefit. I work full-time as well. He worked from 18 years old, and I get approximately $680/mth. This $680 actually costs me more in tax than I get, but when I asked about stopping it for now, I was told if I stop it, I lose it. I cannot restart it later if I cancel it now that I've already started taking it.
Another reason (and the one which I took early CPP for) is that I knew I will definitely be a GIS recipient at age 65 due to lower income over my years of work. Right now I have a situation that allows me to live 'ok' on this lower CPP amount and I know that at 65, both the full OAS and a certain amount of tax free GIS will apply. The lower my CPP plus OAS is at 65, the greater the amount of tax free GIS I will receive. (I knew this from others in similar situations and searched and searched until I found this on a financial website to be true....so decided to go this way. So far, so good! Am 61)
PLEASE - if you are in you late 40’s - go to a good advisor. It could be to your advantage to take you benefits early - but I doubt it. There are 50 scenarios! Think about just this one: it is pretty standard knowledge that ya if you are 30 or so, medical science will give you excellent chance to live to 100. If you retire and take benefits at age 60 - your CPP would be about $600/mo. But you would live another 40 years. From age 60 to age 90 (for example) with inflation @ 3% - your $600 would be worth just about $300! If you are living to 100, keep paying into CPP. At age 70, your CPP will be over $1400/mo. @age 90, it will still be worth about $1100! Like I said - see an advisor!
Saw too many people during covid that got the virus, got complications from it beit stress or health and passed before the age of 60 didn't even have opportunity to apply. Take it early if you can.
I am retiring at 58yo and my wife will retire at 62yo. We both have Derived Benefit Pensions. Women in her family live to 95-100yo, there is no history on my side of the family. In my retirement at 58yo till 60yo I will get $4200/month while My wife will be making $92,000/year over those 2 years while still working. Wondering if I should take my CPP at 60yo since I have no family history of longevity? By my calculation if I take CPP at 60yo I will make $4200/mo Pension, $770/mo CPP and about $600/mo OAS for $5500/month or $67,000/year. My wife in retirement will get $3,000/mo Pension, $770/mo CPP and about $600 OAS for $4370/month or $52440/year. Total income will be $120,000/year. We will both be under the OAS clawback amount. We will also still both be under the OAS clawback amount if we took CPP at 65yo. Is having an uncertain family longevity on my side of the family a good enough reason to take CPP at 60yo? or should I wait till 65yo so if I die after that my will will get more money? We will have our home paid for and our vehicles when we retire.
Great detail, thanks. Doesn't sound like taking early or late is based on needing it. You could calculate the total income vs total tax to see which way is better for you. A financial plan does that easily for you.
Another consideration might be if your spouse is 65 and you are (at age 60) eligible to collect the GIS allowance between 60 and 65. This is something that is rarely discussed. Great video!
@@femalecrusader8389 Not GIS per say, but whats called "the gis allowance". Your older spouse needs to be 65 and collecting GIS and OAS. You as the younger spouse between the ages of 60 and 64 may be eligible for the "allowance" if your combined incomes are below a certain amount. It seems to be hard to find information on this as i suppose not many couples are 5 years apart in age? Anyway hope this helps and for more info, look into the "GIS Allowance" for spouses between the age of 60 and 64. At age 65 you would then look at possibly qualifying for your own GIS.
One problem with taking benefits early is…..if your have an accident or a debilitating disease, before 65 you cannot apply for a disability pension. This happened to a guy I worked with. He started taking his CCP at 60, but developed a severe blood disorder at 61. He applied for a disability pension but was denied……because he was already receiving his CCP.
@@sharona7428 I think the disability pension was a little more, but by taking his CCP early it was less than it would have been had he been able to draw the DP and let his CCP mature.
I was working and then suffered a stroke in 2019 at age 58. My private insurance plan provided Long Term disability required that after a year I had to apply for CCP Disability. I So I currently receive private health insurance benefit and CCP Disability monthly am not back at work due to disability from stroke . Very important for income tax reasons to get your doctor to verify your disability to Revenue Canada Agency.
I was working and then suffered a stroke in 2019 at age 58. My private insurance plan provided Long Term disability required that after a year I had to apply for CCP Disability. I So I currently receive private health insurance benefit and CCP Disability monthly am not back at work due to disability from stroke . Very important for income tax reasons to get your doctor to verify your disability to Revenue Canada Agency.
The break even age (assuming I have the contribution room in my RRSP and earn 7.5% return before and after retirement) is age 93 .. if I live an average life (age 86) the fund I created ($152,470) will pay me out at about $200 a month more between 70 and 86 than the max CPP payment .. food for thought
What if you retire with pension that provides a bridging benefit until 65? Then at 65 you can start collecting full CPP benefit of approx $ 1200 and your pension is only reduced by no longer getting the bridging benefit.
Take it early as you are not accounting for cost of living raises I took mine at 50 it was 1k it has climbed to almost 1300 now at 55 so your friggen doesn't add up ,u loose very little if you plan and die then you get zero .best early
None of these retirement benefits videos address taking the benefits at 60 but still working and paying into them until your ready to fully retire? What would be the advantages and disadvantages of doing that?
Hi Vincent, receiving and contributing to CPP will enhance your benefit. It’s not a significant adjustment although the cumulative amount is, given you live to an old age. The disadvantage is the increased taxation. You have employment income plus government benefits! A financial plan may provide withdrawals strategies that may result in a better outcome.
Nice video, but I would ask that you explore the growth of pension benefits accumulated between early and late start.. and factor in the compounded interest over the interim years. Notably, if you can afford to delay the pension start date, then you can afford to save 100 percent of what you would collect if you start early. By my math, this is a win win for an early start as the pensioner is the winner over both a long life or early death. At least the pensioner would have had a chance to collect something if he dies early and not risk collecting nothing if he waited. If they live longer than the cross over, then start drawing down the difference from the growth balance from collecting early. If you were to collect $40k over a 5 year period then invest in a simple GIC at 5 percent, it will be around $100K by the cross over date, which moves the cross over date out significantly. If I put all my pension collected from 60-65 while still working, into a tax free savings account, and the same amount into an RSP, the tax is deferred on the boosted income while still working. But the best part is the growth of the money in a TFSA is tax free forever.
@@cornstar1253 Show me your math... to your point about inflation... I would rather get the more valuable dollars today than the deflated dollars later. Govt lies about actual inflation and lag behind in actual buying power when adjusting for future inflation.
Show your actual math turning 40k into a 100k please. The dates you collect the 40K by and each year getting 5% in this simple gic you speak of.. Considering currently they aren’t at 5% so please start with that, the name of the bank that you think will be giving 5% in the year that it takes for you to collect this 40k that you think you’ll have.
Am I wrong about thinking that the numbers are incorrect? For each year you delay, the amount goes up 8.4%, but isn't the amount adjusted for inflation too? Let's assume inflation adjustment is 2% and at 65, the CPP benefit is $1000. So if you delay 1 year, isn't the benefit now $1020? And the 8.4% increase is now on $1020?
one consideration that i havent seen discussed yet ( as im new to this ) is the opportunity cost with respect to investing the $$ should you decide to take CPP early. For example, if you took CPP at 60, but invested the $$ because you dont actually need it, youd have that $$ to invest in RRSP's to reduce your taxable income and hopefully make you some profit as well. your thoughts ?
The idea sounds good although it really depends on what your tax rate is now? Do you have a financial plan or advisor helping you keep your tax rate low in retirement. Many retirees are in a low tax bracket already.
As CPP is fully indexed to inflation and also increases by 7 to 8 percent each year you delay taking benefits between 60 and 70, I don't think opportunity costs are big factor here.
Thanks for the response. One consideration I’m looking at is the fact that having too much in my riff and liff will result in a potential clawback when it comes time to collect OAS. The other issue is that I will be required to withdraw a certain amount when I reach 72. Also, there’s no guarantee on the performance of my investments whereas the CPP is a guaranteed income and is adjusted to inflation as you said. So this appears to point in the direction of taking larger Riff and Liff withdrawals now and waiting on CPP. Makes sense ?
I'm 70 years old took my pension @ 60 and retired do you think at 86 you are going to do a lot of traveling you have only so many good years left, money at your later years how much do you need.
@Aaron Wealth Management : They interviewed a bunch of people on their deathbed. They were all old but their number one regret was working too hard. Only a fool would work past 60 or a broke ass. In some rare cases, they are workaholics and just cannot retire.
I was told that if take CPP at 60 it remain that way for ever, and there will be no increase. But What if you still working part time and still contributing.
Hi Romeo, working while receiving CPP doesn't reduce your CPP benefit. In fact, possibly increase it. www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-post-retirement/eligibility.html
I am a dual citizen with an American military pension working on a provincial pension. By the time I'm in my early 60s I will have two more pensions from two countries with a total of 4. The tax accountant stuff isn't so fun though 🤣
I some questions: I am widowed. Am receiving widowers pension. And i decided to get my early CPP at 61 yrs old. And am still working permanent full-time still contributing CPP as a compulsory deduction from my work. My question is if i retire at the age of 65. Is my monthly CPP will increase at my to top rates since am still contributing my CPP at work
Embarking on this new chapter of retirement in Canada? Remember, proactive financial planning is the key to unlocking a secure and fulfilling future. Instead of solely relying on CPP, OAS, and GIS, consider staying invested with a trusted financial advisor. They can guide you towards strategic investments, ensuring your retirement is not just stable but prosperous. Take control of your financial destiny and embrace the retirement you've always envisioned!
Love the videos and expert, technical advice! I have a question that I’m not sure was addressed in the videos or comments. ( if it was I apologize for not picking up on it..). I have a Canadian Armed Forces pension that I’ve been drawing since 2017. I’m indexed. I’m also in a second mini career but retiring completely in 2025. My Army pension has a Bridge benefit that gets clawed back when I hit 65 earlier if I opt to take CPP at 60. I’m currently considering waiting to 70 but perhaps 65 is the better option. I think if I take CPP at 65 the Bridge benefit loss is almost cancelled out or equalized by the CPP benefit I’ll get. But waiting the 5 years might be better if I can eat the drop in my pension for the 5 years. Do you have general advice for those of us with a bridge benefit? Thank you Aaron!
If you worked at least 10 years legally and contributed to c.p.p in Canada you can collect your c.p.p beginning at age 60. It does not matter if you are living in Canada or India.
Thanks for creating the video, there’s allot of information there and even more in many of the comments. I turned 60 last Nov. and decided not to apply for my CPP for several reasons but mainly because I did not need the extra money at this time. I have a great pension, a few RRSP soon maturing and a good chunk of money in my savings. Question 1 - Should I wait until I am 65 to begin receive it? On another note, my wife turns 60 this coming Nov. she also receives a fairly good pension but less than half of mine because she decided to retire early before reaching her full pension age and magic retirement number. We share equally our income and expenses (she has access to mine and I have access to hers) and we spend most of our winter where it is a much warmer climate than back home in Northern Ontario (I wish our Canadian $ was worth more, LOL). My 2nd question is because her pension is less, should my wife apply for her CPP at age 60? It is important to note that her family line has a very good life longevity in its history! 😂 Thanking you in advance for your advice.
Hi Rick, Thanks for watching and for your questions. A financial plan will answer your questions. While I don't have your exact details an area of concern is a possible clawback of your OAS. Feel welcome to call me. Here's a link to my online calendar: calendly.com/aaronwealthmanagement/discovery
Thank you for this video and the information. I'll be 59 this Aug. and currently on med. leave from my employer. Despite having 3 doctors submitting documentation to our SunLife work insurance as to my medical situation I've been declined STD (short-term disability). We've already been in consultation with lawyers and that's going forward. However, I'm now considering the age 60 CPP option just down the road as it's doubtful at this point whether I'll be able to return to work. Fortunately I'm able to draw on E.I. med benefit payments - but that's only good for 26 wks...and then I go into the twilight zone. I've worked all my life and now find myself unsure of the future due to health reasons.
Thank you for your comment and valuable insights. Your situation is more common than you think. In fact about 55% of people retire earlier than expected due to medical reasons and about 25% retire earlier to care for a spouse. Hope everything works out in your favour.
@@AaronWealthManagement I'll be 60 in May. I had to stop working in 2012 due to various chronic health issues. Thankfully I got Persons With Disabilities in British Columbia. What happens to the $1410 from them I get every month if I start CPP at 60? Times are tough and I'm alone. Thank-you very much.
@@ChristMySolidRock1963 It is very tough for everyone that lives alone. I am still working but cannot save anything, rents, food, gas, everything is too expensive…. One day, if I survive to get retired (now 56), I cannot live in Canada with these disgraceful amounts they give to people as “pensions”.
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So if one is single, decided not to take it until 70, wife has passed, I die 2 days before I turn 70, what happens to all the money I contributed for 54 years.
So, i have worked so far 38 years. My 30 and out is end of this year. I'll be 60 this nov. Laid off now till April. Last 3 bad years,lay-offs, GM. Auto worker. I maxed out my payment for 27 years. 6 really low years, and 2022 to 2004 off no work. ? If I decided to delay my cpp for a few years and live off Rrsp and pension. Will I gain more or lose more in cpp payments because i won't be paying into cpp in 2025. I going to retire. CRA says 800 now at 60. Thanks. Vince
I applied last year and I have been overseas so I didn’t see the letter of acceptance, calling them from here is a nightmare, I paid cpp through the years but I was a self employed musician, what could get you rejected for your pension at 60. I believe when I played the Olympics in Calgary for the opening ceremonies with Ian Tyson I paid CPP, there were other jobs too through the years, my question is did I pay enough to even expect the minimum?
Hi Jim, thanks for your comment and for watching the video. If you work while receiving your CPP retirement pension and are under age 70, you can still make CPP contributions. Each year you contribute to the CPP will result in a post-retirement benefit and increase your retirement income. Here's the link to CRA: www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-post-retirement/eligibility.html
Thank you for sharing. I would like to know should I consult with the bank financial advisors or accountant for my CPP information? For example, I have company pension if I take earlier retirement but will my CPP deduction because I have company pension. Thank you for your response.
Great question. I haven’t experienced anything like that. Many employers are dealing with having knowledgeable employees since Covid. A lot of new employees everywhere you go. Question, how long have you been working in Canada after age 18?
Take it while its there folks. Any big sum of money is NOT safe from the gubberment PERIOD. I basicly considered it another tax at my job. I am too young to ever see it. It is a house of cards. I would be taking the lump sum every time.
Re CPP - I am 61 and divorced, I have already accumulated enough credits to receive the maximum monthly benefit at 65 (approx. $1,250 at 65) minus the credits I will need to give to my ex wife which may bring me down to say $900 \month. If I continue to work and pay CPP can I accumulate additional credits so I could possibly get the $1,250/mth even after giving my ex some of the credits?
For many years I worked in Canada. Now I am in Europe. I am over 65 years old. I am trying to find my record of total number of my employment there. And Projected estimate of what I will get. Also the link about how sign on to My Service Canada pages. I have spend days to get record of my employment and what I am entitled to. Please help with clear instruction if you could.
Just call service Canada and provide personal information such as your social security number and they will look up your account and provide you information about your cpp and O.A.S entitlement.
Maybe I missed it, but the cummulative 60 line is the minimum, and the cumulative 70 line is the maximum with 65 not quite the middle. So the plot would be better represented with colored areas showing where your CPP could be if you deferred to say 62 and 6 months or 66 and 3 months, because your circumstances required it. There is also no discussion about those with indexed pensions and bridge amounts vs savings only retirees, where pulling CPP leaves their capital intact a few more years, etc.
I think the comment about married people living longer and the exact percentage in the graph is mistaken. Men do live longer by having a good women by their side, but the graph is the percentage that one of you lives to that particular age. Also: I am not totally sure, but was reading that there is a reason to take CPP early if you retire early and don't have a full number of years paying into the system. I think the number of years counted changes if you take CPP early so you have less 0 years in the average. feel free to correct this if you know better.
Hi Sean, thanks for your comments and insight. In the video, I mention the decision to take CPP early depends on your personal situation. As for longevity, there is a significant amount of data behind why people live longer when in a committed relationship such as marriage. The power of love is amazing, isn't it?
I am getting pwd check for last 3yrs. I have not worked and don’t plant to again I’m 59. I want to get my CPP at age 60 but will it come off my pwd check? Is CPP like an income where i can make 15 k a yr with out my pwd check being touched? Appreciate your help
Yeah this was a good video I still need to formulate some more questions on 56 and a very poor saver but my taxes are up-to-date and I’ve paid everything to the max but I’m looking to want to retire out of the country I have a wife in Indonesia and like I said I’m 56 right now I’m in limbo because I’m taking care of my 90-year-old mother I’m just waiting for her to do her thing and then I figure I haveFour years to crush it and get out of Dodge
Great question. I'd need more detail about your situation, timeline, risk tolerance & goals. Here's a link to my calendar. calendly.com/aaronwealthmanagement/discovery
I do think that people worry far too much about OAS clawback. If you have over $129,000 a year in retirement income (almost $11,000 a month, double that for a couple) and your OAS is entirely clawed back then I would say you have little to worry about financially in your retirement. It seems like the OAS tail wagging the retirement dog to me. Of course planning your retirement finances is never a bad idea and if you can reduce the amount of OAS claw back why not but realistically, if you are in clawback territory, is some portion of the $600/month that OAS pays really going to affect your finances appreciably?
Ok, Where do I start...first thanks for your comment. As a planner, I have to respect every dollar that my client is eligible to receive. My responsibility is to uncover opportunities and reveal potential problems. It's up to my client to choose if they want to take action on my advice. It's easy to think, why would someone with a large investment account care about being ineligible to receive $7421 annually (OAS)? But they do. That also might explain why they have done so well. A good question to consider is, if your advisor didn't see a clawback coming, what else have they overlooked? There are literally dozens of ways people can save, stretch, earn and avoid on their way to financial success. Great question and again thanks for commenting. Let me know of any video requests you might have.
@@AaronWealthManagement I agree that people do worry about OAS clawback when perhaps it's immaterial to their standard of living in retirement (which was kind of my point). I do know that when you've spent years and years of watching every penny "saving for the future" it's a hard habit to break when that future actually arrives. I guess I see some people that focus on avoiding OAS clawback to the detriment of enjoying their retirement, keeping their retirement income lower than it needs to be just to avoid it. Avoiding OAS clawback is kind of like trying to figure out how to dodge probate fees. Sure minimize it if you can but there's no need to go overboard, in the overall scheme of things it's not worth losing sleep over. Heck, I have a 7 figure investment account myself achieved through decades of scrimping, saving, and investing for the long term and between my wife and myself we don't come close to OAS clawback territory in retirement. We would have to have over $13,000/month of retirement income between us to lose even a single dollar to OAS clawback. It seems to me that if you are fortunate enough to be subject to OAS clawback you should count your blessings and move on. By the way... We've delayed CPP & OAS to age 70 for the longer term derisking of our retirement income stream. Who knows if that will pay off but at the end of the day I figure it's about peace of mind--it's not always all about the money.
I collect a survivor pension also like you. I took CPP at 60, both pensions combined get me $900 monthly I continued to work and I invest the $900 each month into my RRSP and TFSA. The main reason is that being single my pension will die with me and my estate will get a $2500 death benefit So by taking it early every dollar of CPP has been invested, accumulated growth and increased the value of my estate.
Great question and thanks for watching the video. The answer is found by answering a few questions. Do you need the extra income? What is your family history around longevity? That’s how I would begin approaching answering your question. Then the next step is how does the extra income affect your tax rate.
Hi Ray, if you really want to increase your estate value have you looked into life insurance? It multiplies the value of your money higher than any other asset class.
Hi Glen, thanks for watching the video and your comment. Here are a few questions for you. Is your pension reduced when receiving CPP? If not, do you need the additional income? Do you expect a longer life expectancy? Will your income be high enough to cause a clawback? Hope that helps. Let me know if I there is anything I can help with.
@@AaronWealthManagement Thanks Aaron... my defined pension is not effected by outside income. I will lose my bridge benefit with my OAS at 65. No clawback - But I hope to be at that income margin someday LoL!!! I do not need the CPP at 60,. But would like to use it for investment purposes medium risk=inflation beater
Yes take it at 60. At 60 CPP considers best 35 years , at 65 its your best 39 years . So if you retired at 56 you would be adding a bunch of zeros between 60 and 65. You may qualify for the maximum at 60 ( minus penalty) and be far from maximum at 65. Im in the exact same situation
As each person's circumstances are different, I would say having a written financial plan is the first step. The plan details at what age to start receiving CPP, which retirement accounts to drawdown on and when. Taking CPP early is usually a decision based on needing income. Occasionally retirees will take CPP early to mitigate clawbacks although in my experience its been the need for income or a low family mortality history.
@@bl9531 See @Practical Tactical response in this thread... he makes very good points that I totally agree with --- here's a snippet of his thread "...explore the growth of pension benefits accumulated between early and late start.. and factor in the compounded interest over the interim years. Notably, if you can afford to delay the pension start date, then you can afford to save 100 percent of what you would collect if you start early. By my math, this is a win win for an early start as the pensioner is the winner over both a long life or early death. At least the pensioner would have had a chance to collect something if he dies early and not risk collecting nothing if he waited..."
With this title I thought you were going to do an analysis because of inflation... the real inflation which is I guess at least double the government 6% fake number. Doesn't this have an effect on what age we take the CCP ?
High inflation certainly cuts into a tight budget. During these times it's a good strategy to have 1-2 years of cash on-hand in laddered GICs while the economy is resetting and inflation slowly returning to a reasonable number.
Great stuff. I wish we had guys like you and the internet when I was in my 20s back in the 80s. Even then, the youngsters today will ignore financial planning just like most of us did. Sigh…youth is wasted on the young.
Housing costs as a percentage of income have more than doubled since you were in your 20s. They have no money left over to invest. Most members of rhe next generation will never own homes unless they inherit them.
When I run the financial plan, sometimes the client is better off financially taking it early. Everyone's situation is different. Another consideration is a history of early death rates in a family.
Hello David - I enjoyed the video - Is it safe to say, if you DONT need the money, deferral is always the best option? I know life expectancy is important, OAS clawback etc. This always seems to be the 'classic gamble' scenario, so since you cannot predict lifespan, health, defer if you have money, seems to be the defining variable, and therefore if you dont need it wait as long as you can?
Great insight and thank you for your comment. If you don't need the money, then delaying until at least 65 is best. There are other ways to mitigate a clawback on OAS if you start planning for the scenario ahead of time.
Hi David, thanks for the very informative video. Taking CPP at the age of 60 in this video is assuming one works until the age of 60, correct? It would be interesting to know, for someone leaving the work force after 20 years, at the age of 55, would there be any benefit from delaying CPP until the age of 65? Thank you.
Hi Bob, this is a common question. Have a look at my video on CPP Breakeven timestamp of 22:25 where I do a live walk-through of CRA's website to calculate an estimated income. On the 2nd tab of the CRA website is the Canada Pension calculation. You can manually enter your income data showing you having zero income at 55. Let me know if that helps. I can always work on a financial plan for you. Great question and thanks for commenting.
I'm in Canada for 8 years now, I've been hearing that I have to be in Canada and contributed with the CPP. I'm now 66 y/o, Is it okay to claim CPP now how will it affect for I have contributed only for 8 years. Please advise and thanks.
I don't want to work one day more than I have to! Freedom is priceless!
My 2cents is stop working as soon as you can , don’t work anymore then you have to and Take what ever you can as soon as you can . I seen so many people die within a couple years of retirement after staying late because their going to live forever and there’s never enough money. Or your going to end up in some home that’s taking 75% of your pension while you share a room with someone who never worked a day in his life. Enjoy your retirement as soon as you can .
I took it at 60, because it allowed me to afford to work 4 days (32 hours) per week instead of 5 days(40 hours), right up until I retired at 64 due to COVID layoffs. Constant 3-day weekends makes for a much better work/life balance.
I like your strategy Shaw. It's about the quality of living. We can't get back time.
So...your quality of life improved for 4 years.
@@smorgdonkey ... and beyond. Retirement improved my quality of life much more.
Note: I took CPP at 60, but because I was still working and paying into it, my CPP income was steadily increasing during those 4 years.
@@dbcanada good that it worked out for you.
Lucky to have a job that allowed you a shortened week.
I plan on retiring next year at 50 years old. But not in Canada because our cost of living is ridiculous. I will live in Asia at a cost of 1500 CAD a month 3x less than Canada.
Good, you can go back to China and retire there. Don't come back to Canada that will make the air quality in Canada better with less 2 people breathing here 😄
Assuming you can retire at 60, the most critical factor is how much more "useful" the money is from 60-70 versus 70-80. I had an acquaintance tell me that his 60th birthday was awesome since he still felt really fit and ready to really enjoy retirement, he also said his 70th birthday was _completely_ different, with age really starting to become "noticeable". He was still very able-bodied at 72, but he said there is absolutely no comparison to 62! Past 60, age-related effects are an *exponential* curve, so don't kid yourself into thinking that 40-60 is _at all_ the same as 60-80.
I agree with that. There’s life span and health span to consider in retirement. Average retirement life span is about 28 years. How many of those are active years?
I took it early and it goes straight into a tax free savings account. Our financial guy said we would be farther ahead when I get to 65.
I took my CPP @ 62. Reason: I am still working and am forced to pay CPP premiums until 65...with no increase my future CPP benefit! If I don't collect, I send about ~$20K in premiums out the window by age 65. Collecting ($10,245 in 2022) gives me needed income now, and allows me to start building the post-retirement benefit (PRB) which generated an additional $710 annually in 2022 and maybe up to $1500 annually by age 65 which offsets a good chunk of the original penalty. The overall penalty averages out to about ~$1500/yr if I live to 80 and my wife collects the survivor benefit for 5 more years. Worth it.
I once read about taking early CPP and it was put this way: They took an example of twins. Both earned pretty much the same throughout their lives and both had about equal net worth. One took early pension and the other did not. The one who did not take it early took 13 years to receive the amount the other did. Take it early since we don't know how long we've got.
Take it early if you are single.
Plus we want to use it when we are likely healthier and can still travel etc
The example I posted above shows the growth of the roughly 40 K at 3, 4 and 5 percent. which is left to grow and added to the running sum of money collected after 65. You can see the 3 percent rate breaks even at 76, the 4 percent breaks even at almost 79 and 5 percent always exceeds. Add to that any possibility of growth if that money is in the market or ETF and its easy to see that investing the 60-65 money will outperform... Now I'm using some rough and probably incorrect assumptions about the 60 and 65 year old pension rates... Use your own values to confirm.
I think the decision is case by case .. life expectancy is one piece .. retirement timing .. need for the money (semi-retirement) .. taxes (if there’s enough RRSP contribution room) .. RRSP performance (if I contribute all CPP that I receive before retirement, how much more / month will I be able to take out after retirement) .. etc
What does "took 13 years to receive.." mean? As opposed to what?
I took it at 60, I wanted to invest it myself. I continued to contribute for a couple years, and I retired at 63. My CPP is at $884 now.
Hi I'm thinking about taking my CPP early as well and will continue to work til I'm 63 at the same job which I have been working in for 36 years and paying max amount for most of those years - I had children and had an industrial accident so my contributions were less those years. I was told my CPP now would be around $850 pm. Since I had my work place accident and collect WCB for 1 day a week, my earnings at my job are less and they increased the yearly earnings for max amount I no longer pay max amount into CPP. I missed it by $400. last year and $1200. in 2021. I still collect over the minimum amount to pay max with my WCB and my job but WCB doesnt pay into CPP. Yup I got screwed. So my question to you is how much did it affect your CPP between age 60 and 63 when you retired? Did you continue to pay max amount and how much of a difference did those 3 years make when they calculated the 3 extra years into your CPP when you retired at 63? Sorry to be so long winded.
Excellent advice, I started collecting at 61.5 , at age 64 I sold my company money in the bank two months later Cancer ,chemo ,radiation , surgery ,today I am 68 o. ..k I am not going to make it to 85 plus at 85 one don’t need as much as in his sixties on top most people are afraid to spend the worry about their grand children . I have seen interviews on Tv when people are getting extra help from government and they are passing it to their grand children who are running around with a thousand dollar cell phones . I am not giving advice but I also don’t want to listen to complaints about pensions.
David . in my opinion , taking CPP at 60 does not incur a reduction ( of 36% ) on the total amount showing at the end of the graph . in fact , the word “reduction” here is misleading , simply because you do not talk about the PRESENT VALUE of money . Please look at your graph at minute 5:27 and see what happens between age 60 and 73 , and all the money cashed in during those 13 crucial years . Crucial because money has a lot more value in that timeline than in the future . Also , the person who started getting money at age 60 did just that : started getting money !! and 5 or 10 years more than their counterparts . That is a lot of money compared to no money at all till age 65 or 70 . Not to forget , with age , quality of life also deteriorates , there is no way around that .. much like the purchasing power of money .. Who cares about the total amount received by the end of the graph which depicts the end of one’s lifetime , providing the individual actually lives that long and does not get hit by a bus , besides all the other probability and statistical challenges or negative odds that the individual is facing .
I say live your life now .
It would be interesting to see a graph that shows how misleading statistical graphs can be .
This is my opinion . I am not an accountant or a professional financial planner , but I believe it is important to clearly explain to your audience the present value of money , the ever diluting purchasing power of currency , the trailing lagging index that our government portrays as the ultimate solution to inflation ( CPP GIS OAS ) . At this rate , many Canadian pensioners will never be able to make ends meet because the real purchasing power of money needed for say food , accommodation , energy is much much lower than any graph based on statistics and theory presents . just saying
Thank you for your attention
Thanks for sharing. It's great hearing different opinions.
@@AaronWealthManagement the feeling is mutual David . I see yours as being “a different opinion” too 😉
@@AaronWealthManagement David you still did not explain to your audience the present value of money
@@vaskenderboghossian8061 Didn't we speak on the phone today?
@@AaronWealthManagement David we have never spoken .. ( nice one though .. )
Best to take it early, increase your quality of life and enjoy it while you are still healthy. Who knows whats down the road after 60
I don’t have much of a pension so I’m using rsp’s from 61 - 65 , taking as much out as possible to keep me in the lowest tax bracket.
From age 65 - 69 I’m going to collect my small pension, oas and gis, using a little from my tfsa to supplement (tfsa is not considered income so it won’t affect my gis amount), then at 70 I will shift to the highest payout of all with my cpp.
Cpp increases 8% per year by not taking it, great return on your money.
best bang fir a buck.. really liked ur strategy
Another bigger factor is COL. I had 2 live in a high renyt area 2 retauin employment BUT when I retired 2 Elliot Lake ON, I reduced my COL by 400%, hence, a huge "raise"! Plus, lower stress, finasncial/economic/stress. PLUS, I just happened 2 retire 2 "God's country" a yr b4 covid hit!
His completely RIGHT
My philosophy is take CPP early if you really need the money to make ends meet,, or take it early if you DON'T need the money and you want to invest it or play with it. If you're not sure, wait and take it later.
Real inflation in Canada is 12 percent! If you wait you are paid in debased currency. The government rate is a cruel joke.
Another think that is never discussed is the survivor benefit with CPP. I was 60 and my wife was 59. She had breast cancer and would probably die. I phoned SC and discussed my options knowing my wife was going to die in the next few months. In simple numbers if I took CPP at 60, 65, & 70 I'd get $600/$1000/$1400 per month assuming my wife would also get her max CPP since she was fully paid up. Since it was pretty sure my wife was going to pass and I would get a survivor benefit which would be about 40% of her CPP. So I figured at 65 I'd get $1400 per month. But the agent told me at 65 there is a max benefit payout of $1100 (round numbers) so the this all I'd get and the govt would keep the rest. So taking CPP at 60 made more sense because I'd get my $600 plus the 40% death benefit and even then, they would still claw back $25 per month.
So if either of you and your spouse is terminal take the pension early. I asked why that max payout number isn't published but didn't get an answer - because they didn't really want people to know about the claw back.
My husband passed at 52. I didn't know anything about CPP but got the survivor benefit. I work full-time as well. He worked from 18 years old, and I get approximately $680/mth. This $680 actually costs me more in tax than I get, but when I asked about stopping it for now, I was told if I stop it, I lose it. I cannot restart it later if I cancel it now that I've already started taking it.
Or you took Level income option on your DB pension and it drops at 65, need at least the CPP at 65 to maintain same income.
Another reason (and the one which I took early CPP for) is that I knew I will definitely be a GIS recipient at age 65 due to lower income over my years of work. Right now I have a situation that allows me to live 'ok' on this lower CPP amount and I know that at 65, both the full OAS and a certain amount of tax free GIS will apply. The lower my CPP plus OAS is at 65, the greater the amount of tax free GIS I will receive. (I knew this from others in similar situations and searched and searched until I found this on a financial website to be true....so decided to go this way. So far, so good! Am 61)
PLEASE - if you are in you late 40’s - go to a good advisor. It could be to your advantage to take you benefits early - but I doubt it. There are 50 scenarios! Think about just this one: it is pretty standard knowledge that ya if you are 30 or so, medical science will give you excellent chance to live to 100. If you retire and take benefits at age 60 - your CPP would be about $600/mo. But you would live another 40 years. From age 60 to age 90 (for example) with inflation @ 3% - your $600 would be worth just about $300! If you are living to 100, keep paying into CPP. At age 70, your CPP will be over $1400/mo. @age 90, it will still be worth about $1100! Like I said - see an advisor!
We’ll said Gordon.
Is it not that c.p.p has an increase every year with the cost of living. So it would not stay at $600.00 per month.
Saw too many people during covid that got the virus, got complications from it beit stress or health and passed before the age of 60 didn't even have opportunity to apply. Take it early if you can.
Covid took my business away, so i applied at 62.
I am retiring at 58yo and my wife will retire at 62yo. We both have Derived Benefit Pensions. Women in her family live to 95-100yo, there is no history on my side of the family. In my retirement at 58yo till 60yo I will get $4200/month while My wife will be making $92,000/year over those 2 years while still working. Wondering if I should take my CPP at 60yo since I have no family history of longevity? By my calculation if I take CPP at 60yo I will make $4200/mo Pension, $770/mo CPP and about $600/mo OAS for $5500/month or $67,000/year. My wife in retirement will get $3,000/mo Pension, $770/mo CPP and about $600 OAS for $4370/month or $52440/year. Total income will be $120,000/year. We will both be under the OAS clawback amount. We will also still both be under the OAS clawback amount if we took CPP at 65yo. Is having an uncertain family longevity on my side of the family a good enough reason to take CPP at 60yo? or should I wait till 65yo so if I die after that my will will get more money? We will have our home paid for and our vehicles when we retire.
Great detail, thanks. Doesn't sound like taking early or late is based on needing it. You could calculate the total income vs total tax to see which way is better for you. A financial plan does that easily for you.
Another consideration might be if your spouse is 65 and you are (at age 60) eligible to collect the GIS allowance between 60 and 65. This is something that is rarely discussed. Great video!
The spouse that is 60 can receive CPP & GIC?
@@femalecrusader8389 Not GIS per say, but whats called "the gis allowance". Your older spouse needs to be 65 and collecting GIS and OAS. You as the younger spouse between the ages of 60 and 64 may be eligible for the "allowance" if your combined incomes are below a certain amount. It seems to be hard to find information on this as i suppose not many couples are 5 years apart in age? Anyway hope this helps and for more info, look into the "GIS Allowance" for spouses between the age of 60 and 64. At age 65 you would then look at possibly qualifying for your own GIS.
@@dansmith6508 Thank you, that is helpful.
One problem with taking benefits early is…..if your have an accident or a debilitating disease, before 65 you cannot apply for a disability pension. This happened to a guy I worked with. He started taking his CCP at 60, but developed a severe blood disorder at 61. He applied for a disability pension but was denied……because he was already receiving his CCP.
Which 1 was more
@@sharona7428 I think the disability pension was a little more, but by taking his CCP early it was less than it would have been had he been able to draw the DP and let his CCP mature.
That's why you need life insurance with disability benefit
I was working and then suffered a stroke in 2019 at age 58. My private insurance plan provided Long Term disability required that after a year I had to apply for CCP Disability. I So I currently receive private health insurance benefit and CCP Disability monthly am not back at work due to disability from stroke . Very important for income tax reasons to get your doctor to verify your disability to Revenue Canada Agency.
I was working and then suffered a stroke in 2019 at age 58. My private insurance plan provided Long Term disability required that after a year I had to apply for CCP Disability. I So I currently receive private health insurance benefit and CCP Disability monthly am not back at work due to disability from stroke . Very important for income tax reasons to get your doctor to verify your disability to Revenue Canada Agency.
The break even age (assuming I have the contribution room in my RRSP and earn 7.5% return before and after retirement) is age 93 .. if I live an average life (age 86) the fund I created ($152,470) will pay me out at about $200 a month more between 70 and 86 than the max CPP payment .. food for thought
What if you retire with pension that provides a bridging benefit until 65?
Then at 65 you can start collecting full CPP benefit of approx $ 1200 and your pension is only reduced by no longer getting the bridging benefit.
Thank you very good information
It’s better to get it at 60 so you can qualify for GIS when your turn 65 which is not taxable.
Take it early as you are not accounting for cost of living raises I took mine at 50 it was 1k it has climbed to almost 1300 now at 55 so your friggen doesn't add up ,u loose very little if you plan and die then you get zero .best early
None of these retirement benefits videos address taking the benefits at 60 but still working and paying into them until your ready to fully retire? What would be the advantages and disadvantages of doing that?
Hi Vincent, receiving and contributing to CPP will enhance your benefit. It’s not a significant adjustment although the cumulative amount is, given you live to an old age. The disadvantage is the increased taxation. You have employment income plus government benefits! A financial plan may provide withdrawals strategies that may result in a better outcome.
Nice video, but I would ask that you explore the growth of pension benefits accumulated between early and late start.. and factor in the compounded interest over the interim years. Notably, if you can afford to delay the pension start date, then you can afford to save 100 percent of what you would collect if you start early.
By my math, this is a win win for an early start as the pensioner is the winner over both a long life or early death. At least the pensioner would have had a chance to collect something if he dies early and not risk collecting nothing if he waited.
If they live longer than the cross over, then start drawing down the difference from the growth balance from collecting early. If you were to collect $40k over a 5 year period then invest in a simple GIC at 5 percent, it will be around $100K by the cross over date, which moves the cross over date out significantly.
If I put all my pension collected from 60-65 while still working, into a tax free savings account, and the same amount into an RSP, the tax is deferred on the boosted income while still working. But the best part is the growth of the money in a TFSA is tax free forever.
@@barrys7515 So you missed the point huh... LOL... It about collecting as much as possible BEFORE YOU DIE.
@@barrys7515 Now I get it. You don't actually have a point. Enough already.
Inflation will easily negate the benefits.
@@cornstar1253 Show me your math... to your point about inflation... I would rather get the more valuable dollars today than the deflated dollars later. Govt lies about actual inflation and lag behind in actual buying power when adjusting for future inflation.
Show your actual math turning 40k into a 100k please.
The dates you collect the 40K by and each year getting 5% in this simple gic you speak of..
Considering currently they aren’t at 5% so please start with that, the name of the bank that you think will be giving 5% in the year that it takes for you to collect this 40k that you think you’ll have.
Am I wrong about thinking that the numbers are incorrect? For each year you delay, the amount goes up 8.4%, but isn't the amount adjusted for inflation too? Let's assume inflation adjustment is 2% and at 65, the CPP benefit is $1000. So if you delay 1 year, isn't the benefit now $1020? And the 8.4% increase is now on $1020?
The CPI adjustment is not static and I think you're missing the point of the video. The $20 is inconsequential.
Do you really live longer if you are married or does it just seem longer?
😂
🤣
Golden globe award for that one😁😅😂👍
lol.... fist bump
one consideration that i havent seen discussed yet ( as im new to this ) is the opportunity cost with respect to investing the $$ should you decide to take CPP early. For example, if you took CPP at 60, but invested the $$ because you dont actually need it, youd have that $$ to invest in RRSP's to reduce your taxable income and hopefully make you some profit as well. your thoughts ?
The idea sounds good although it really depends on what your tax rate is now? Do you have a financial plan or advisor helping you keep your tax rate low in retirement. Many retirees are in a low tax bracket already.
As CPP is fully indexed to inflation and also increases by 7 to 8 percent each year you delay taking benefits between 60 and 70, I don't think opportunity costs are big factor here.
Thanks for the response. One consideration I’m looking at is the fact that having too much in my riff and liff will result in a potential clawback when it comes time to collect OAS. The other issue is that I will be required to withdraw a certain amount when I reach 72. Also, there’s no guarantee on the performance of my investments whereas the CPP is a guaranteed income and is adjusted to inflation as you said. So this appears to point in the direction of taking larger Riff and Liff withdrawals now and waiting on CPP. Makes sense ?
I'm 70 years old took my pension @ 60 and retired do you think at 86 you are going to do a lot of traveling you have only so many good years left, money at your later years how much do you need.
Unless you are financially inept, you should be 100% retired at 60 with other sources of income plus the pittance from CPP and OAP.
Hi Waren, thanks for watching and for your comments. Some people love what they do. It's not work for them, a labour of love if you will.
@Aaron Wealth Management : They interviewed a bunch of people on their deathbed. They were all old but their number one regret was working too hard. Only a fool would work past 60 or a broke ass. In some rare cases, they are workaholics and just cannot retire.
Thank you
I was told that if take CPP at 60 it remain that way for ever, and there will be no increase. But What if you still working part time and still contributing.
Hi Romeo, working while receiving CPP doesn't reduce your CPP benefit. In fact, possibly increase it. www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-post-retirement/eligibility.html
CPP is inflation adjusted although not 7% inflation as we have seen
I am a dual citizen with an American military pension working on a provincial pension. By the time I'm in my early 60s I will have two more pensions from two countries with a total of 4. The tax accountant stuff isn't so fun though 🤣
I some questions:
I am widowed. Am receiving widowers pension. And i decided to get my early CPP at 61 yrs old. And am still working permanent full-time still contributing CPP as a compulsory deduction from my work. My question is if i retire at the age of 65. Is my monthly CPP will increase at my to top rates since am still contributing my CPP at work
Embarking on this new chapter of retirement in Canada? Remember, proactive financial planning is the key to unlocking a secure and fulfilling future. Instead of solely relying on CPP, OAS, and GIS, consider staying invested with a trusted financial advisor. They can guide you towards strategic investments, ensuring your retirement is not just stable but prosperous. Take control of your financial destiny and embrace the retirement you've always envisioned!
I've only invested into savings and stocks. I don't like RRSPs.
Love the videos and expert, technical advice! I have a question that I’m not sure was addressed in the videos or comments. ( if it was I apologize for not picking up on it..). I have a Canadian Armed Forces pension that I’ve been drawing since 2017. I’m indexed. I’m also in a second mini career but retiring completely in 2025. My Army pension has a Bridge benefit that gets clawed back when I hit 65 earlier if I opt to take CPP at 60. I’m currently considering waiting to 70 but perhaps 65 is the better option. I think if I take CPP at 65 the Bridge benefit loss is almost cancelled out or equalized by the CPP benefit I’ll get. But waiting the 5 years might be better if I can eat the drop in my pension for the 5 years. Do you have general advice for those of us with a bridge benefit? Thank you Aaron!
Respected sir. I'm from india. I worked in Canada from 1981 till 1993. Now I'm living in india since then. I'm 63 now Am I eligible for cpp benefits
Nope. If you have residence outside of the country the Canadian government will not pay you Jack.
If you worked at least 10 years legally and contributed to c.p.p in Canada you can collect your c.p.p beginning at age 60. It does not matter if you are living in Canada or India.
Also there are tax agreements with the Canadian government and about 50 countries. If India is not on that list, you will pay tax on that cpp.
Thanks for creating the video, there’s allot of information there and even more in many of the comments. I turned 60 last Nov. and decided not to apply for my CPP for several reasons but mainly because I did not need the extra money at this time. I have a great pension, a few RRSP soon maturing and a good chunk of money in my savings. Question 1 - Should I wait until I am 65 to begin receive it? On another note, my wife turns 60 this coming Nov. she also receives a fairly good pension but less than half of mine because she decided to retire early before reaching her full pension age and magic retirement number. We share equally our income and expenses (she has access to mine and I have access to hers) and we spend most of our winter where it is a much warmer climate than back home in Northern Ontario (I wish our Canadian $ was worth more, LOL). My 2nd question is because her pension is less, should my wife apply for her CPP at age 60? It is important to note that her family line has a very good life longevity in its history! 😂 Thanking you in advance for your advice.
Hi Rick, Thanks for watching and for your questions. A financial plan will answer your questions. While I don't have your exact details an area of concern is a possible clawback of your OAS. Feel welcome to call me. Here's a link to my online calendar: calendly.com/aaronwealthmanagement/discovery
Thank you for this video and the information. I'll be 59 this Aug. and currently on med. leave from my employer. Despite having 3 doctors submitting documentation to our SunLife work insurance as to my medical situation I've been declined STD (short-term disability). We've already been in consultation with lawyers and that's going forward. However, I'm now considering the age 60 CPP option just down the road as it's doubtful at this point whether I'll be able to return to work. Fortunately I'm able to draw on E.I. med benefit payments - but that's only good for 26 wks...and then I go into the twilight zone. I've worked all my life and now find myself unsure of the future due to health reasons.
Thank you for your comment and valuable insights. Your situation is more common than you think. In fact about 55% of people retire earlier than expected due to medical reasons and about 25% retire earlier to care for a spouse. Hope everything works out in your favour.
@@AaronWealthManagement Thanks, much appreciated. Stayin' optimistic and taking it day by day. Appreciate the information you share. 😊
@@AaronWealthManagement I'll be 60 in May. I had to stop working in 2012 due to various chronic health issues. Thankfully I got Persons With Disabilities in British Columbia. What happens to the $1410 from them I get every month if I start CPP at 60? Times are tough and I'm alone. Thank-you very much.
@@ChristMySolidRock1963 It is very tough for everyone that lives alone. I am still working but cannot save anything, rents, food, gas, everything is too expensive…. One day, if I survive to get retired (now 56), I cannot live in Canada with these disgraceful amounts they give to people as “pensions”.
@@Kathy007s - GOSPEL (The Good News of Salvation) -
Acts 16:30b-31: Sirs, what must I do to be saved? And they said, BELIEVE on THE LORD JESUS CHRIST, and THOU SHALT BE SAVED, and thy house.
I Corinthians 15:3-4: For I delivered unto you first of all that which I also received, how that CHRIST DIED FOR OUR SINS according to the scriptures; And that HE WAS BURIED, and that HE ROSE AGAIN THE THIRD DAY according to the scriptures:
- ETERNAL SECURITY -
John's Gospel 5:24 - Verily, verily, I say unto you, he that heareth my word, and BELIEVETH ON HIM THAT SENT ME, HATH EVERLASTING LIFE, and SHALL NOT COME INTO CONDEMNATION; but IS PASSED FROM DEATH UNTO LIFE.
1 John 5:13 - These things have I written unto you that BELIEVE ON THE NAME OF THE SON OF GOD; that YE MAY KNOW THAT YE HAVE ETERNAL LIFE, and that ye may BELIEVE ON THE NAME OF THE SON OF GOD (God who is my Saviour).
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that's all good, but I am in line to get only $200 per month with my CPP. One of the disadvantages of being self-employed at minimum wage.
Same amount for a housewife 😞
Same I only got 232.oo at age 62 worked all my life now can't get oas till 70
Iam 63 and I live in China for 13 years, am I entiltled to get a canadian pesnsion
So if one is single, decided not to take it until 70, wife has passed, I die 2 days before I turn 70, what happens to all the money I contributed for 54 years.
donated to the Trudeau Foundation.
Gonzo. There is no minimum payout for CPP.
@@hongbinweiJustin Trudeau Castro u mean😂 the son of Fidel Castro who sold Canadians to CCP
Another reason to take it early. I think the best explanation was the ones with the twins.
So, i have worked so far 38 years. My 30 and out is end of this year. I'll be 60 this nov. Laid off now till April. Last 3 bad years,lay-offs, GM. Auto worker.
I maxed out my payment for 27 years. 6 really low years, and 2022 to 2004 off no work.
? If I decided to delay my cpp for a few years and live off Rrsp and pension. Will I gain more or lose more in cpp payments because i won't be paying into cpp in 2025. I going to retire. CRA says 800 now at 60.
Thanks. Vince
I applied last year and I have been overseas so I didn’t see the letter of acceptance, calling them from here is a nightmare, I paid cpp through the years but I was a self employed musician, what could get you rejected for your pension at 60. I believe when I played the Olympics in Calgary for the opening ceremonies with Ian Tyson I paid CPP, there were other jobs too through the years, my question is did I pay enough to even expect the minimum?
Sounds like you’ve made at least $3,500 in T4 income over the years. It’s a pain I know but keep trying to reach them.
What is the difference between the CAF or public service and non CAF
-what about taking it and still paying into it im still employed
Hi Jim, thanks for your comment and for watching the video. If you work while receiving your CPP retirement pension and are under age 70, you can still make CPP contributions. Each year you contribute to the CPP will result in a post-retirement benefit and increase your retirement income.
Here's the link to CRA: www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-post-retirement/eligibility.html
Thank you for sharing. I would like to know should I consult with the bank financial advisors or accountant for my CPP information? For example, I have company pension if I take earlier retirement but will my CPP deduction because I have company pension. Thank you for your response.
Thanks for your video. I remember clearly calling Service Canada. They told me I could not collect CPP before 65 y/o. Do they blatantly lie?
Great question. I haven’t experienced anything like that. Many employers are dealing with having knowledgeable employees since Covid. A lot of new employees everywhere you go. Question, how long have you been working in Canada after age 18?
@@AaronWealthManagement 40 years. Actually, she did not ask me any questions, she just answered my question saying "no, you can't before 65 y/o".
@@AaronWealthManagement All my life.
Are you sure you called CPP, OAS isn’t accessible until 65…
@@woman5918 yes
Correct me if I'm wrong. Your CPP is based on your income over the years. Not everyone gets the money you are showing it will vary.
That’s correct.
Open a binance account, but Tron and Dogecoin to get rich and retire.
Just wondering if this also apply to the QPP (Quebec)... Always have to be different here :(
The best way is donnot pay or pay minimum CPP, then you have everything under your own control.
What about taking it at 60 and putting it in tax free savings for five years
Take it while its there folks.
Any big sum of money is NOT safe from the gubberment PERIOD.
I basicly considered it another tax at my job.
I am too young to ever see it.
It is a house of cards. I would be taking the lump sum every time.
I received an Alberta pension from work. Will I have to do the income tax every year? Please let me know. Thank you
Re CPP - I am 61 and divorced, I have already accumulated enough credits to receive the maximum monthly benefit at 65 (approx. $1,250 at 65) minus the credits I will need to give to my ex wife which may bring me down to say $900 \month. If I continue to work and pay CPP can I accumulate additional credits so I could possibly get the $1,250/mth even after giving my ex some of the credits?
For many years I worked in Canada. Now I am in Europe. I am over 65 years old. I am trying to find my record of total number of my employment there. And Projected estimate of what I will get. Also the link about how sign on to My Service Canada pages. I have spend days to get record of my employment and what I am entitled to. Please help with clear instruction if you could.
Just call service Canada and provide personal information such as your social security number and they will look up your account and provide you information about your cpp and O.A.S entitlement.
Maybe I missed it, but the cummulative 60 line is the minimum, and the cumulative 70 line is the maximum with 65 not quite the middle. So the plot would be better represented with colored areas showing where your CPP could be if you deferred to say 62 and 6 months or 66 and 3 months, because your circumstances required it. There is also no discussion about those with indexed pensions and bridge amounts vs savings only retirees, where pulling CPP leaves their capital intact a few more years, etc.
I think the comment about married people living longer and the exact percentage in the graph is mistaken. Men do live longer by having a good women by their side, but the graph is the percentage that one of you lives to that particular age.
Also: I am not totally sure, but was reading that there is a reason to take CPP early if you retire early and don't have a full number of years paying into the system. I think the number of years counted changes if you take CPP early so you have less 0 years in the average. feel free to correct this if you know better.
Hi Sean, thanks for your comments and insight. In the video, I mention the decision to take CPP early depends on your personal situation. As for longevity, there is a significant amount of data behind why people live longer when in a committed relationship such as marriage. The power of love is amazing, isn't it?
My buddy told me the earlier you take it, the more taxes are taken. Is that true ? He told me no earlier than 65. Thanks
Depends on your tax rate so not exactly an accurate statement by your friend.
@Aaron Wealth Management so the more you save..the higher the tax rate ?
@@dougferguson5581 the more you receive as income in your hand the higher the tax rate
I am getting pwd check for last 3yrs. I have not worked and don’t plant to again I’m 59. I want to get my CPP at age 60 but will it come off my pwd check? Is CPP like an income where i can make 15 k a yr with out my pwd check being touched? Appreciate your help
CPP is peanuts, barely pays for my home heating bills in the wintrr.
Yeah this was a good video I still need to formulate some more questions on 56 and a very poor saver but my taxes are up-to-date and I’ve paid everything to the max but I’m looking to want to retire out of the country I have a wife in Indonesia and like I said I’m 56 right now I’m in limbo because I’m taking care of my 90-year-old mother I’m just waiting for her to do her thing and then I figure I haveFour years to crush it and get out of Dodge
I'm 36, and my husband is 43. Where can we start investing in our retirement and kids education fund? Calgary ab
Great question. I'd need more detail about your situation, timeline, risk tolerance & goals. Here's a link to my calendar. calendly.com/aaronwealthmanagement/discovery
Everything explained is based on the maximum. If you didn't contribute the maximum you don't get that income.
If you don't take cpp and you die, what happens to your money, does some go to spouse?
I took my CPP because of the COVID 19 Pandemics.
Great video, Can I have the Records organizer please.
Thanks for your comment. Your record organizer is on its way.
When are you going to do a video on " Canadian Economic Refugees "
Is that a little humour Rob?
I would grab it while you can. It’s insolvent. It’s been overloaded with older new citizens and bankrupt
I do think that people worry far too much about OAS clawback. If you have over $129,000 a year in retirement income (almost $11,000 a month, double that for a couple) and your OAS is entirely clawed back then I would say you have little to worry about financially in your retirement. It seems like the OAS tail wagging the retirement dog to me.
Of course planning your retirement finances is never a bad idea and if you can reduce the amount of OAS claw back why not but realistically, if you are in clawback territory, is some portion of the $600/month that OAS pays really going to affect your finances appreciably?
Ok, Where do I start...first thanks for your comment. As a planner, I have to respect every dollar that my client is eligible to receive. My responsibility is to uncover opportunities and reveal potential problems. It's up to my client to choose if they want to take action on my advice.
It's easy to think, why would someone with a large investment account care about being ineligible to receive $7421 annually (OAS)? But they do. That also might explain why they have done so well.
A good question to consider is, if your advisor didn't see a clawback coming, what else have they overlooked? There are literally dozens of ways people can save, stretch, earn and avoid on their way to financial success.
Great question and again thanks for commenting. Let me know of any video requests you might have.
@@AaronWealthManagement I agree that people do worry about OAS clawback when perhaps it's immaterial to their standard of living in retirement (which was kind of my point). I do know that when you've spent years and years of watching every penny "saving for the future" it's a hard habit to break when that future actually arrives. I guess I see some people that focus on avoiding OAS clawback to the detriment of enjoying their retirement, keeping their retirement income lower than it needs to be just to avoid it. Avoiding OAS clawback is kind of like trying to figure out how to dodge probate fees. Sure minimize it if you can but there's no need to go overboard, in the overall scheme of things it's not worth losing sleep over. Heck, I have a 7 figure investment account myself achieved through decades of scrimping, saving, and investing for the long term and between my wife and myself we don't come close to OAS clawback territory in retirement. We would have to have over $13,000/month of retirement income between us to lose even a single dollar to OAS clawback. It seems to me that if you are fortunate enough to be subject to OAS clawback you should count your blessings and move on. By the way... We've delayed CPP & OAS to age 70 for the longer term derisking of our retirement income stream. Who knows if that will pay off but at the end of the day I figure it's about peace of mind--it's not always all about the money.
Hi David,
I’m receiving survivor benefits and turning 60 next year . Is it a good idea for me to take my cpp at 60?
I collect a survivor pension also like you.
I took CPP at 60, both pensions combined get me $900 monthly
I continued to work and I invest the $900 each month into my RRSP and TFSA.
The main reason is that being single my pension will die with me and my estate will get a $2500 death benefit
So by taking it early every dollar of CPP has been invested, accumulated growth and increased the value of my estate.
Great question and thanks for watching the video. The answer is found by answering a few questions. Do you need the extra income? What is your family history around longevity? That’s how I would begin approaching answering your question. Then the next step is how does the extra income affect your tax rate.
Hi Ray, if you really want to increase your estate value have you looked into life insurance? It multiplies the value of your money higher than any other asset class.
If you take CCP at 60 and continue to work and pay into CCP does your CPP payment increase? If so how does it work?
You either pay or you collect, you can’t do both. So if you keep working it will not be deducted if you are collecting.
@yvanhuberdeau2801 not true. I'm 62 and collecting but still working until 65. Because I'm still contributing it will raise my rate
@@robleonard6245 thanks, I stand corrected, you are right. That must have changed I don’t believe it was always like that.
It is like it for me .. I am doing both rn
Sweet spot age 70. ✅
What about OAS .
Cant get it till 70 thanks to Trudeau
If i have no plan of retirement. Should i take cpp at 60?. Thanks
Without knowing more details about your situation I’d recommend you get a plan
Retired early at 56 with modest unreduced pension. Haven't contributed to CPP in 4 years. Should I start receiving my early CPP at 60
Hi Glen, thanks for watching the video and your comment. Here are a few questions for you. Is your pension reduced when receiving CPP? If not, do you need the additional income? Do you expect a longer life expectancy? Will your income be high enough to cause a clawback? Hope that helps. Let me know if I there is anything I can help with.
@@AaronWealthManagement Thanks Aaron... my defined pension is not effected by outside income. I will lose my bridge benefit with my OAS at 65.
No clawback - But I hope to be at that income margin someday LoL!!!
I do not need the CPP at 60,. But would like to use it for investment purposes medium risk=inflation beater
Yes take it at 60. At 60 CPP considers best 35 years , at 65 its your best 39 years . So if you retired at 56 you would be adding a bunch of zeros between 60 and 65. You may qualify for the maximum at 60 ( minus penalty) and be far from maximum at 65. Im in the exact same situation
Although your not working for 5 years before 60 years old. every year you wait you get the 7.2% increase and cost of living added to it. Is it not ?
I was thinking to do this at 57
Not possible to take CPP before age 60
I like 👍/subscribe thanks 😊
So in your opinion a retiree is better to take CPP at 60 rather than drawing down his investment portfolio.
As each person's circumstances are different, I would say having a written financial plan is the first step. The plan details at what age to start receiving CPP, which retirement accounts to drawdown on and when. Taking CPP early is usually a decision based on needing income. Occasionally retirees will take CPP early to mitigate clawbacks although in my experience its been the need for income or a low family mortality history.
@@bl9531 See @Practical Tactical response in this thread... he makes very good points that I totally agree with --- here's a snippet of his thread
"...explore the growth of pension benefits accumulated between early and late start.. and factor in the compounded interest over the interim years. Notably, if you can afford to delay the pension start date, then you can afford to save 100 percent of what you would collect if you start early.
By my math, this is a win win for an early start as the pensioner is the winner over both a long life or early death. At least the pensioner would have had a chance to collect something if he dies early and not risk collecting nothing if he waited..."
Never take CPP at age 60, I've been telling people this for years.. and everyone that has not listened to me has regretted it.
I am thinking of retiring in India can I get my cpp in India ( without having to comeback every 6 mo.? )
Yes you can.
With this title I thought you were going to do an analysis because of inflation... the real inflation which is I guess at least double the government 6% fake number. Doesn't this have an effect on what age we take the CCP ?
High inflation certainly cuts into a tight budget. During these times it's a good strategy to have 1-2 years of cash on-hand in laddered GICs while the economy is resetting and inflation slowly returning to a reasonable number.
Great stuff. I wish we had guys like you and the internet when I was in my 20s back in the 80s. Even then, the youngsters today will ignore financial planning just like most of us did. Sigh…youth is wasted on the young.
You got that right Stuart
Housing costs as a percentage of income have more than doubled since you were in your 20s. They have no money left over to invest. Most members of rhe next generation will never own homes unless they inherit them.
CPP is a lot less than Social Security. Max SS in 2023 is $4555/month at age 70.
Govt. paid ad. You lose 1/3 of your CCP by withdrawing early. Don't do it unless you are wealthy.
When I run the financial plan, sometimes the client is better off financially taking it early. Everyone's situation is different. Another consideration is a history of early death rates in a family.
Hello David - I enjoyed the video - Is it safe to say, if you DONT need the money, deferral is always the best option? I know life expectancy is important, OAS clawback etc. This always seems to be the 'classic gamble' scenario, so since you cannot predict lifespan, health, defer if you have money, seems to be the defining variable, and therefore if you dont need it wait as long as you can?
Great insight and thank you for your comment. If you don't need the money, then delaying until at least 65 is best. There are other ways to mitigate a clawback on OAS if you start planning for the scenario ahead of time.
Hi David, thanks for the very informative video.
Taking CPP at the age of 60 in this video is assuming one works until the age of 60, correct?
It would be interesting to know, for someone leaving the work force after 20 years, at the age of 55, would there be any benefit from delaying CPP until the age of 65? Thank you.
Hi Bob, this is a common question. Have a look at my video on CPP Breakeven timestamp of 22:25 where I do a live walk-through of CRA's website to calculate an estimated income. On the 2nd tab of the CRA website is the Canada Pension calculation. You can manually enter your income data showing you having zero income at 55. Let me know if that helps. I can always work on a financial plan for you. Great question and thanks for commenting.
To cheap earnings even if we retiremet at 67. Too bad too bad
Average age of death is 86?
I'm in Canada for 8 years now, I've been hearing that I have to be in Canada and contributed with the CPP. I'm now 66 y/o, Is it okay to claim CPP now how will it affect for I have contributed only for 8 years. Please advise and thanks.
My suggestion is to call revenue Canada. They will be able to give an answering based specifically on your situation
A welfare person makes more I don't understand that one
It’s Canada.