Personal Finance

I'm a Canada Pension Plan (CPP) expert. Any questions?

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  • Jul 17th, 2017 4:44 am
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Deal Addict
Oct 4, 2009
1841 posts
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Montreal
Faith24 wrote:
Mar 13th, 2017 10:40 am
It affects the Guaranteed Income Supplement for low income earners.
Of course it does. You stated that it affects OAS which is not the case hence my post attempting to help dispel any confusion.
Deal Addict
Oct 4, 2009
1841 posts
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Montreal
Chickinvic wrote:
Mar 13th, 2017 10:33 am
Agreed. My own personal opinion is that the income thresholds for senior welfare (OAS) should be much lower. I never could understand why the last government was set on increasing the collection age to 67 instead of just leaving it at 65 and lowering the clawback threshold. Oh yeah, seniors vote in far higher percentages than younger people, so we'd never see that happen lol.
Agree. I would especially like to see thresholds for high income couples reduced. Taxpayers subsidizing retired couples earning 150k to 240k seems insane to me.
Jr. Member
Oct 12, 2016
123 posts
16 upvotes
How many years of contributions do you need to receive full CPP at retirement?
Deal Addict
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Dec 27, 2009
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Ottawa, ON
Limited7 wrote:
Mar 14th, 2017 12:57 am
How many years of contributions do you need to receive full CPP at retirement?
It depends on a variety of things such as how many years someone can drop due to child rearing (for example, my mom had 5 kids and we were 16 years between oldest to youngest - so I think she got to drop many years from her calculation).
Everyone gets to drop their lowest income years (up to 8 years).
Member
Apr 29, 2012
271 posts
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Limited7 wrote:
Mar 14th, 2017 12:57 am
How many years of contributions do you need to receive full CPP at retirement?
I think I came across a formula once but don’t know where it is. I’m sure it is available on the CRA webpage. One way of looking at it is you have achieve two accomplishments.
1. You have to put in at least 39 years.
2. In each of those years your income has to be at or exceed the yearly maximum pension earnings. In 2017 YMPE is $55,300

If you don’t make $55,300 then you can work more years to get 39 YMPE years or at least add to your contribution to approach the max cpp payout.
P.S. YMPE increases every year, just like inflation.
Jr. Member
Oct 12, 2016
123 posts
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rfduser199 wrote:
Mar 14th, 2017 5:07 pm
I think I came across a formula once but don’t know where it is. I’m sure it is available on the CRA webpage. One way of looking at it is you have achieve two accomplishments.
1. You have to put in at least 39 years.
2. In each of those years your income has to be at or exceed the yearly maximum pension earnings. In 2017 YMPE is $55,300

If you don’t make $55,300 then you can work more years to get 39 YMPE years or at least add to your contribution to approach the max cpp payout.
P.S. YMPE increases every year, just like inflation.
OK so for example if someone immigrated to Canada at the age of lets say 40 and they worked for full 20 years until retirement. So in essence they only contributed 20 years into CPP. Is there a formula to calculate how much pension will this person receive?
Deal Addict
Aug 30, 2011
2610 posts
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Ottawa
Limited7 wrote:
Mar 14th, 2017 12:57 am
How many years of contributions do you need to receive full CPP at retirement?
Wait for Dogger to reply. I'm not sure about that last answer.
Newbie
Aug 13, 2011
45 posts
1 upvote
Toronto
My question concerns delaying CPP benefits and the rate of increases after age 65 if no further contributions are made.
For example would a person who has 36 years of YPME at age 65 and other years that were very close to the YPME( Age 65 Service Canada projection is $20 less than CPP max) and stopped contributions at age 65 thereby making only age based gains in the CPP benefit amount, be close to the same CPP benefit at age 70 as if they had contributed beyond age 65. Ignore post retirement benefit in your reply.
Member
Apr 29, 2012
271 posts
130 upvotes
Limited7 wrote:
Mar 14th, 2017 5:52 pm
OK so for example if someone immigrated to Canada at the age of lets say 40 and they worked for full 20 years until retirement. So in essence they only contributed 20 years into CPP. Is there a formula to calculate how much pension will this person receive?
OttawaGardener's advice is good, wait for Dogger. I did say I think I saw a formula. On the other hand it could have been a formula on how much you get based on what you previous contributed, not the other way around which is what you were asking and what I may have mistakenly implied. But the other stuff I said, i.e. the 39 YMPE years, I'm confident on that part. But Dogger, please correct me if I'm wrong.
Sr. Member
Nov 29, 2014
680 posts
80 upvotes
A person I know is going to be going on CCP Disability (not me) they are also getting Long Term Disability (LTD) through their work. I will refer to CCP disability as CCP from now on.

I read that CPP benefits provide a cost of living allowance every year and that any increase to this allowance would not be deducted from the LTD insurance and would be given to the person instead. Is this true?

My impression is that one just gives the CCP amount to the LTD insurance company.

Another question is how would one know what a living allowance increase is? How much of a increase is there from year to year? Is this typically the only thing that one can withhold from the LTD insurance company from their CCP benefit?

Also, they have been paying taxes on LTD money they get (quite a bit). So when the CCP money comes, do they pay taxes again? I think they shouldn't but I kind of don't know what would happen. The person would send the money to the insurance company and they would give the person a tax waiver? Does one have to phone the CRA to clear up the concern?

Overall it's a very confusing situation for them and I would like to help as much as I can. Thanks.
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Feb 1, 2005
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Curious about a hypothetical situation regarding CPP survivor benefit when both people have near-max CPP credits earned.

It is my understanding that on the death of one of the spouses, the survivor will not get the full CPP survivor benefit that would have been paid had the survivor had no CPP at all but rather only an amount that would get the survivor to the maximum CPP for the survivor alone.

How does this work in the context of delaying taking CPP to 70 and the spouse dies after that? How much does the survivor get. I guess I am asking if the enhanced benefit for delaying taking CPP is useless in a survivor situation or if the survivor does get some additional credit for the deceased spouse waiting until until 70 to take CPP (again both are at near-max CPP credit earned).
[OP]
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Dec 12, 2012
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Courtenay
Limited7 wrote:
Mar 14th, 2017 12:57 am
How many years of contributions do you need to receive full CPP at retirement?
Chickinvic is basically correct. If you don't qualify for the CRDO, you need 39 years of max earnings to get a full CPP at age 65. If you do qualify for CRDO you need to have max earnings for 83% of (47 years minus CRDO years).
[OP]
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Dec 12, 2012
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Courtenay
Limited7 wrote:
Mar 14th, 2017 5:52 pm
OK so for example if someone immigrated to Canada at the age of lets say 40 and they worked for full 20 years until retirement. So in essence they only contributed 20 years into CPP. Is there a formula to calculate how much pension will this person receive?
Assuming CRDO is not a factor and assuming all 20 years were max earnings, they would receive 20/39ths of a max CPP at age 65.
[OP]
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Dec 12, 2012
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Courtenay
ShopperfiendTO wrote:
Mar 17th, 2017 11:25 am
Curious about a hypothetical situation regarding CPP survivor benefit when both people have near-max CPP credits earned.

It is my understanding that on the death of one of the spouses, the survivor will not get the full CPP survivor benefit that would have been paid had the survivor had no CPP at all but rather only an amount that would get the survivor to the maximum CPP for the survivor alone.

How does this work in the context of delaying taking CPP to 70 and the spouse dies after that? How much does the survivor get. I guess I am asking if the enhanced benefit for delaying taking CPP is useless in a survivor situation or if the survivor does get some additional credit for the deceased spouse waiting until until 70 to take CPP (again both are at near-max CPP credit earned).
Read this article: https://retirehappy.ca/cpp-survivor-benefits/
Newbie
Aug 15, 2015
1 posts
Edmonton
My wife stayed home with the kids, and i understand the CRDO applies until kids are 7. So if two children, 2 years apart, does it work out to a total of 9 years? So from birth of first child to 7th birthday of second child?

Also, she has continued to work only very part time and freelance, so not really making any CPP contributions the last few years. Is it possible to make up CPP Contributions retroactively? And going forward, is it possible to make max CPP contributions even if her earnings are small, and if so, how?

Thanks!

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