Comments on: Take CPP Early? Or Late? http://wheredoesallmymoneygo.com/take-cpp-early-or-late/ A personal finance blog written by Preet Banerjee Thu, 24 May 2012 10:29:13 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: dlm http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-386 dlm Tue, 16 Feb 2010 20:03:48 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-386 Just found out that you cannot collect EI and CPP at the same time. So early CPP benefits can be deferred until after whatever EI you are entitled to collect Just found out that you cannot collect EI and CPP at the same time. So early CPP benefits can be deferred until after whatever EI you are entitled to collect

]]> By: Dave Cattanach http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-385 Dave Cattanach Wed, 02 Sep 2009 18:20:22 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-385 I have retired early due to our plant closure but have contributed the maximum into CPP from 1974 to 2007 inclusive. I was 53 in 2007 and was wondering what reduction I would get from my CPP if I started collecting at age 60 assuming I do not go back to work ? Just wondering how that 15% buffer works. Also, if I waited until age 62 would I understand my pension would increase by 12% but would I suffer a further reduction because I have not worked since age 53? Dave I have retired early due to our plant closure but have contributed the maximum into CPP from 1974 to 2007 inclusive. I was 53 in 2007 and was wondering what reduction I would get from my CPP if I started collecting at age 60 assuming I do not go back to work ? Just wondering how that 15% buffer works. Also, if I waited until age 62 would I understand my pension would increase by 12% but would I suffer a further reduction because I have not worked since age 53?

Dave

]]> By: Dave Cattanach http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-384 Dave Cattanach Wed, 02 Sep 2009 18:20:21 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-384 I have retired early due to our plant closure but have contributed the maximum into CPP from 1974 to 2007 inclusive. I was 53 in 2007 and was wondering what reduction I would get from my CPP if I started collecting at age 60 assuming I do not go back to work ? Just wondering how that 15% buffer works. Also, if I waited until age 62 would I understand my pension would increase by 12% but would I suffer a further reduction because I have not worked since age 53? Dave I have retired early due to our plant closure but have contributed the maximum into CPP from 1974 to 2007 inclusive. I was 53 in 2007 and was wondering what reduction I would get from my CPP if I started collecting at age 60 assuming I do not go back to work ? Just wondering how that 15% buffer works. Also, if I waited until age 62 would I understand my pension would increase by 12% but would I suffer a further reduction because I have not worked since age 53?

Dave

]]> By: Virul Patel http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-383 Virul Patel Thu, 28 May 2009 23:17:44 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-383 Hi, I just started my job before 6 month in canada. I am migrated permanent resident from india. I have two questions....... Can i stop to contribute CPP amount from my salary? From every salary it deducts.... How can i get back deducted CPP amount, if i leave canada permanent... Please reply Thanks Hi,

I just started my job before 6 month in canada. I am migrated permanent resident from india. I have two questions…….

Can i stop to contribute CPP amount from my salary? From every salary it deducts….

How can i get back deducted CPP amount, if i leave canada permanent…

Please reply

Thanks

]]> By: Leon Dykler http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-382 Leon Dykler Mon, 28 Jul 2008 20:41:08 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-382 Hi Preet, I don't believe anyone has touched on a little known provision of CPP, the Child Rearing Dropout Provision. Basically, it allows someone who has left the workforce temporarily to raise children (dropped out?), to increase the CPP benefit by excluding from the CPP calculation the periods when income either stopped or was lower. The spirit of the rule is basically to ensure that someone's CPP benefit entitlement is not penalized as a result of raising children. The link is at http://www1.servicecanada.gc.ca/en/isp/pub/factsheets/chidropout.shtml. Hi Preet, I don’t believe anyone has touched on a little known provision of CPP, the Child Rearing Dropout Provision. Basically, it allows someone who has left the workforce temporarily to raise children (dropped out?), to increase the CPP benefit by excluding from the CPP calculation the periods when income either stopped or was lower. The spirit of the rule is basically to ensure that someone’s CPP benefit entitlement is not penalized as a result of raising children.
The link is at
http://www1.servicecanada.gc.ca/en/isp/pub/factsheets/chidropout.shtml.

]]> By: Preet http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-381 Preet Thu, 15 May 2008 23:17:17 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-381 <p>Thanks for the info Randy! </p> Thanks for the info Randy!

]]> By: Randy http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-380 Randy Thu, 15 May 2008 15:39:27 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-380 <p>Just wanted to point out that for a couple that BOTH qualify for a CPP pension, the maximum "survivor benefit" is the maximum CPP for one person. </p><p>As an example for a couple, if one person gets 700 CPP and the other gets 600 CPP, and one of the partners passes away, the survivor only receives a maximum of 884.58 total.</p><p>Therefore, for 2 people collecting a CPP, it is probably not a good idea to wait to collect as they BOTH have to live past 80 to gain from waiting.</p><p>Good article, as some financial planners have it totally backwards.</p><p>If a person NEEDS the CPP, they should wait until 65.</p><p>If a person DOESN'T NEED the money, the should take it and invest it.</p><p>A person can acquire a nice nest egg of cash to pass on to heirs, or to purchase items from time to time, which would save interest charges and make life easier during the years they can really use it.</p><p>Most 80 year olds, aren't trotting around the globe.</p> Just wanted to point out that for a couple that BOTH qualify for a CPP pension, the maximum "survivor benefit" is the maximum CPP for one person.

As an example for a couple, if one person gets 700 CPP and the other gets 600 CPP, and one of the partners passes away, the survivor only receives a maximum of 884.58 total.

Therefore, for 2 people collecting a CPP, it is probably not a good idea to wait to collect as they BOTH have to live past 80 to gain from waiting.

Good article, as some financial planners have it totally backwards.

If a person NEEDS the CPP, they should wait until 65.

If a person DOESN’T NEED the money, the should take it and invest it.

A person can acquire a nice nest egg of cash to pass on to heirs, or to purchase items from time to time, which would save interest charges and make life easier during the years they can really use it.

Most 80 year olds, aren’t trotting around the globe.

]]> By: Preet http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-379 Preet Fri, 04 Apr 2008 05:08:04 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-379 <p>Hi Tom - thanks for your question. Please take the following as generalized food for thought as I can not make any specific recommendations to your situation based on the little information I have - and I would suggest contacting a qualified financial advisor for a personal meeting.</p><p>Q1. Essentially, you need to figure out the break-even point as to WHEN one strategy becomes more desirable than the other. In other words, sometime after you turn 65 if you had waited to take CPP and get the higher amount, the sum total of the CPP cashflows will be greater than taking the CPP at 60. That your penion decreases by 800/month is known and is constant for either choices. The next thing you need to do is figure out if you think you will live long enough to make waiting until 65 to take CPP beneficial.</p><p>Q2. You are indeed correct, you might be decreasing your CPP benefit BUT the calculation does allow you to drop up to 15% of your lower income years for the purposes of determining your benefit.</p><p>You have another option in that you can stop working for two months once you are 60 (so that you are eligible to start collecting CPP), start taking the CPP and then go back to part time work - this will give you the most amount of buffer overall. You will have your income from work, pension and CPP and you could make contributions to your RRSP to offset some taxes.</p><p>Again, make sure to see a qualified, knowledgeable advisor to help you with the projections so that you can decide on what's best for your individual situation.</p><p>Preet</p> Hi Tom – thanks for your question. Please take the following as generalized food for thought as I can not make any specific recommendations to your situation based on the little information I have – and I would suggest contacting a qualified financial advisor for a personal meeting.

Q1. Essentially, you need to figure out the break-even point as to WHEN one strategy becomes more desirable than the other. In other words, sometime after you turn 65 if you had waited to take CPP and get the higher amount, the sum total of the CPP cashflows will be greater than taking the CPP at 60. That your penion decreases by 800/month is known and is constant for either choices. The next thing you need to do is figure out if you think you will live long enough to make waiting until 65 to take CPP beneficial.

Q2. You are indeed correct, you might be decreasing your CPP benefit BUT the calculation does allow you to drop up to 15% of your lower income years for the purposes of determining your benefit.

You have another option in that you can stop working for two months once you are 60 (so that you are eligible to start collecting CPP), start taking the CPP and then go back to part time work – this will give you the most amount of buffer overall. You will have your income from work, pension and CPP and you could make contributions to your RRSP to offset some taxes.

Again, make sure to see a qualified, knowledgeable advisor to help you with the projections so that you can decide on what’s best for your individual situation.

Preet

]]> By: tom http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-378 tom Thu, 03 Apr 2008 09:38:01 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-378 <p>Two questions??<br/>Q1.I am thinking of taking the CPP at age 60. I have just retired with a defined benefit plan. Ay 65 it will be reduced by about 800/Month which is supposed to be offset by the CPP at age 65 of the same amount. If I take the early CPP at age 60 I get approx 600 month. Should I wait till age 65? <br/>Q2.I am working part-time now but only making 20K a year which is below the CPP maximum earnings amount. I am not sure how that reduces my CPP if I wait till 65.In other words could I end up with less than 600 month at age 65 which is what I would get at age 60 because I have stopped contributing at the YMPE level?? </p> Two questions??
Q1.I am thinking of taking the CPP at age 60. I have just retired with a defined benefit plan. Ay 65 it will be reduced by about 800/Month which is supposed to be offset by the CPP at age 65 of the same amount. If I take the early CPP at age 60 I get approx 600 month. Should I wait till age 65?
Q2.I am working part-time now but only making 20K a year which is below the CPP maximum earnings amount. I am not sure how that reduces my CPP if I wait till 65.In other words could I end up with less than 600 month at age 65 which is what I would get at age 60 because I have stopped contributing at the YMPE level??

]]> By: Leon Dykler http://wheredoesallmymoneygo.com/take-cpp-early-or-late/#comment-376 Leon Dykler Wed, 26 Mar 2008 20:24:16 +0000 http://symbiantcapital.com/2008/01/05/take-cpp-early-or-late/#comment-376 <p>Hi Preet, good blog... Re CPP early or late, if a couple decides to use available funds to live off, thereby leaving larger CPP income for later, one of them may die earlier than planned (it's always earlier than planned...), and in the meantime they have been using their own funds. The survivor then is left with only one CPP income source and survivor benefits (and possibly life insurance), which may impact the plan. Another reason for taking CPP early...<br/>Tnx</p> Hi Preet, good blog… Re CPP early or late, if a couple decides to use available funds to live off, thereby leaving larger CPP income for later, one of them may die earlier than planned (it’s always earlier than planned…), and in the meantime they have been using their own funds. The survivor then is left with only one CPP income source and survivor benefits (and possibly life insurance), which may impact the plan. Another reason for taking CPP early…
Tnx

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