Takin’ it

Every Canadian with a legit job has a DB pension. Yes, the golden kind. Guaranteed moolah for life, indexed to inflation with payments that are risk-free and will never fade or disappear. It’s called the CPP.

Now, two things to remember about the public pension system. First, it’s not managed by the government, so relax. There’s a CPP Investment Board (operating as CPP Investments) run by a bevy of Bay Street smarties with $500 billion under management. The plan is to grow the CPP pot to $1.7 trillion by 2040. The return on global investments last year was 20.4%. Sweet. Those fears of a decade ago that the plan would be crushed by lousy demographics are kaput.

Second, (however) the plan pays out peanuts. The CPP was never intended to be a primary source of retirement income for all us little beavs. In fact, the deal was for it to be just one leg on the after-work stool – along with a corporate plan and personal savings. These days one of those supports (company pension) has disappeared for 70% of the working population, so never before have RRSPs, non-registered investment accounts and TFSAs been so critical.

Remember, the current average CPP monthly payment is just $619.44. That’s $7,400 a year. Grocery money. Add in the old age pogey (OAS) of $626 a month, and the average retiree in Canada is collecting less than $15,000 annually. Nobody can live on that. Even a couple doubling that amount will be scratching out a penurious existence. It amounts to financial failure after spending six or seven decades on this planet.

By the way, the maximum CPP payout is $1,203 a month, but few achieve that, since it takes almost 40 years of continuous contributions between the age of 18 and 65. These days a lot of people are not beginning their careers until late in their 20s – one reason everybody’s premiums went up in 2021, so that a little more money can be paid in retirement to people now in their teens.

Well, now to Rob. And let’s revisit the No. 1 question that a certain pathetic financial-and-canine blog is routinely asked:

Next year I turn 60 and I was planning to start taking my CPP. My plan is to deposit it directly to my TFSA every month where I hold ETFs. When my contribution limit is reached then I would continue and contribute into my wife’s TFSA.

Our financial planner (I am self-directed but my wife likes the penguin) at the bank is against this and recommends waiting at least to 65 and even up to 70 before taking my CPP!

I know you always say if the government is giving you money….take it. We are financially solid and don’t “need” the money but… I do trust your advice and would love to know your thoughts on this.

TPTB want to discourage people taking CPP at age 60 for obvious reasons. You will stop collecting from the fund when you die, so the closer you get to exiting, the better. This is why those who wait get more, but for a shorter time. The reduction in benefits for early payout is 0.6% for each month prior to your 65th birthday. That’s about 7% a year, or a total of 36% less for collecting at 60 as opposed to 65. In general this means if you plan on living to 85 and want to max the total amount received, then delay collecting until 69. This is what the number-crunchers, actuaries and stubble-less young bank advisors will tell you.

But wait. What if you croak at 74? That would blow.

Anyway, this is not the essence of Rob’s question. The point is he doesn’t need the money to finance his retirement (which is one of the only valid reasons for delaying, especially if you’re a woman). And in his case, the advice is simple. Stick your hand out. Take the cash.

Reasons abound for doing this. First, (as stated above) you have no idea what your death date will be. So why gamble for the sake a relatively small gain later? When the government offers to give you back some tax money, take it. After all, 60 monthly payments of, says $800, is almost fifty grand. Put into a TFSA in growthy ETFs will boost that further. Voila at age 65 – a new Mercedes E-class sedan! Thanks, Chrystia!

More fundamentally is the aging process. Sixty, as you know, is the new 50 and most people feel frisky and alive. Not so much at 70. Definitely not at 85. So if you can collect and enjoy a guaranteed government pension when you’re young and vital enough to spend it on new experiences, why not? It seems like a really dumb choice to have an extra two hundred bucks a month coming in during your eighties when you could have been enjoying the cash for a decade.

Time is your most precious asset. Do not waste it, waiting.

About the picture: “This is Sugar x 4. She doesn’t worry about cats or anything other than people and food,” writes Brian. “Perhaps it’s food and peeps. Either way, she’s a doll and we love her to bits. I have a comment about the comments section. I’ve been a police officer for 23 years. I used to read comments on police related reporting and started to feel the world was against me. Quite seriously. I know it wasn’t though. It was that fringe group of folks who are so disconnected and permanently pissed off that by taking the time to spread their venom they seems to think it will change things. It won’t. I’d suggest you just shut down the comments for a month or two and perhaps even permanently. When YOU comment about their comments – you make them relevant. They aren’t. You’d lose some fodder but maintain your sanity. Just a thought ….”

169 comments ↓

#1 Rishu on 09.27.21 at 12:48 pm

The way we are accumulating national debt and also taking into account the drop families having children. Will the government have new/more immigrants coming to Canada to pay for this in the future?

#2 Doug t on 09.27.21 at 12:55 pm

tick tock – take the money and run

#3 John Foster on 09.27.21 at 12:57 pm

“The CPP was never intended to be a primary source of retirement income for all us little beavs. In fact, the deal was for it to be just one leg on the after-work stool – along with a corporate plan and personal savings”

Garth, are you saying we should build our retirement on a three-legged stool? :(

#4 Mr. Frugal on 09.27.21 at 12:59 pm

Take the money and run.

https://youtu.be/-WCFUGCOLLU

#5 cuke and tomato picker on 09.27.21 at 1:01 pm

I suggest you take the CPP as soon as possible I have been collecting it for 18 years 7 months. We also have
government pensions as well as two rifs and now we are waiting for the extra10 percent on our OAS. My wife is been collecting her CPP for 15 years .We are fine and fully
retired on South Vancouver Island for 15 years.

#6 None on 09.27.21 at 1:08 pm

Deferring the CPP reduces longevity risk – one of the harder uncertainties to account for in retirement planning.

The goal is NOT to extract the most money and not leaving anything on the table. Piece of mind is worth something and knowing that you have decent money coming in, in the event you (horror) live much longer than you plan is not that bad of a thing.

#7 the jaguar on 09.27.21 at 1:11 pm

Wow. Check out those two adorable creatures and their big orange bodyguard. Nice hardwood floors, too.

#8 fishman on 09.27.21 at 1:13 pm

I love that when somebody steals my comments. Like a wannabe artist that has his paintings stolen: Deserved celebrity status at last.

#9 Russ on 09.27.21 at 1:14 pm

I procrastinated taking the CPP until retirement as the tax hit with a marginal rate over 50% AND the guaranteed yield of 7% seems to favour leaving it until my high income time was over.

So a take it a little early but watch out for other ramifications, I say.

Cheers, R

—————————–

As an aside, from yesterday, I see a picture with cats:

Chameleon on 09.27.21 at 11:08 am

#38 Felix on 09.27.21 at 10:29 am
NOTE TO VIEWERS: A technical glitch has resulted in approximately 80 comments to this post being abducted. The GreaterFool Recovery Team is working on the issue. Please remain calm.

………………………………

Cats are in control of everything. Perhaps a little more respect shown to our superior species will liberate this dogawful website.

No promises.

………………………………

Change the picture to one of a cat, then I’ll believe you’ve gained control.

#10 Felix on 09.27.21 at 1:16 pm

Thank you for the cat photos. There is still a dogawful mutt in the background, but at least he is outnumbered.

We will unhack the blog. Just like with the two Michaels.

For now.

#11 Chameleon on 09.27.21 at 1:18 pm

CATS!

Actually…TWO CATS!

Felix, you indeed have control of The Blog!

What are your demands?

#12 alexinvestor on 09.27.21 at 1:19 pm

Wow … shockingly bad advice.

It’s almost always worth it to delay until 70. The max at age 60 is ~9,600 and the max at age 70 is ~20,400 per year. Once you hit 65, you are still expected to live another 20 years (so an extra 60k + inflation at 85). Unless you are deathly ill and expect to die early, or absolutely need the extra money, or an absolute investment genius (but if you were, you wouldn’t care about CPP anyways), always delay.

Remember Rob has extra savings that he can use. In this case, by delaying CPP and drawing down on other savings, he’s drawing down on uncertain future returns, but gaining certain returns from CPP.

Shockingly bad comment. First, a small minority of people get the max. Second, (using your numbers) $9,600 x 25 years = $240,000. Delaying and taking $20,400 for 15 years = $306,000. Sixty grand is not enough to compensate for having less money for an entire decade. Your time is clearly worth less to you than money. Sad. – Garth

#13 IHCTD9 on 09.27.21 at 1:32 pm

#1 Rishu on 09.27.21 at 12:48 pm
The way we are accumulating national debt and also taking into account the drop families having children. Will the government have new/more immigrants coming to Canada to pay for this in the future?
___

Uh, yeah. Canada is 100% dependent on immigration for population growth. Even for population maintenance. What we take in now is technically not even enough. It’s going to be more and more and more.

Get out of GTA/YVR – live at least 3 hours away from either. 4 hours if you’re in your 20’s.

#14 Ponzius Pilatus on 09.27.21 at 1:35 pm

58 S.Bby on 09.27.21 at 12:14 pm
I’m liking this new self-cleaning comment section.
———————-
Looks like it missed a spot.

#15 Another Deckchair on 09.27.21 at 1:40 pm

CPP: We took it early; after we stopped working, but *well* before 65.

CPP Take-home per month for the 2 of us is north of $1,800.00. Add in a part DB pension, and we withdraw something under 3% of our other investments. (have to up that, I guess)

Having money makes for a stress-reduced retirement!

#16 IHCTD9 on 09.27.21 at 1:41 pm

I kinda like the old CPP. Ms. IH and I will get above average for sure, add in a couple OAS and her modest DBP – and we’re looking at 65K using 2021 numbers. That’s actually enough for us to get by during good health years, and thanks to no mortgage / debt. While RE streaks up in our area as I type, it’s still pretty low cost of living if you already have a house. Wouldn’t be glamorous, but wouldn’t be cat food for dinner either.

Now, if Trudeau/BoC pushes our BDP and House each into the 7 figure zone – we’re off to the races! (or maybe to France/Italy to do a little cheap house shopping).

#17 Hans on 09.27.21 at 1:45 pm

Question re TFSAs… the $70K limit, does that apply when you first open your account? Or does it start at the yearly limit and increase to that over time?

The accumulated room since 2009 is $75,500. If you have been a resident (over 18) since then, you get it all. – Garth

#18 Brett in Calgary on 09.27.21 at 1:53 pm

Off topic, but a semi-interesting blog (not like Garth’s masterpiece) I’ve followed for a while regarding energy and the economy.

https://ourfiniteworld.com/

Gail’s (I guess blogger’s names have to start with G) premise is that cheap energy prices are good for growing economies, while high prices are not.

Given what we are seeing with Europe’s natural gas prices/supplies (most recent article) she wonders if spiking natural gas could prematurely suppress economic activity for this bull cycle.

#19 My Body My Choice on 09.27.21 at 1:54 pm

Some interesting coincidences:

The two Michaels are released shortly after the Huawei CFO is returned to China.

An example of the CCP’s ruthless, 2 for 1 hostage diplomacy.

———————————

Another interesting coincidence:

On Feb. 22/2021, Canada’s House of Commons votes to call the mistreatmeant of the Uyghurs as a genocide by the CCP. (Of course Trudeau and his cabinet abstain, but the motion passes anyway):

https://www.ourcommons.ca/members/en/votes/43/2/56

Then, just by coincidence, 3 months later, the world-wide “media”, declare the unmarked graves discovered in Kamloops a “genocide”.

Things that make me go hmmmmm …………………….

Connect the dots, my friends.

#20 My Body My Choice on 09.27.21 at 1:57 pm

About the photo:

“I’ve been a police officer for 23 years …. I’d suggest you just shut down the comments for a month or two and perhaps even permanently …”

Spoken like a police officer in a police state.

#21 KLNR on 09.27.21 at 2:08 pm

“Time is your most precious asset. Do not waste it, waiting.”

no question, health is the real wealth.
enjoy it while you still have it.
Total crap shoot after 60.

#22 Faron on 09.27.21 at 2:10 pm

#20 My Body My Choice on 09.27.21 at 1:57 pm

Spoken like a police officer in a police state.

Wow. How about spoken like a police officer who has a career’s worth of experience mitigating the worst of human nature. Never forget that Garth spends his precious hours pouring through the comment section drivel.

#23 My Body My Choice on 09.27.21 at 2:13 pm

Oil prices rising rapidly world-wide – currently $75 WTI. Canadian oil/gas and pipeline company stock prices rising in tandem.

Actually, much higher oil prices are good for the environment because they automatically incentivize everyone to reduce consumption.

#24 Nonplused on 09.27.21 at 2:19 pm

I’m curious about people like Brian who think things like if they don’t like the comments section, it should be shut down for everyone, rather than him just not reading it. He has that choice.

———————————-

One should probably do a discounted cash flow of the CPP when deciding when to start taking it. It is pretty common practice to do a net present value on all sorts of things when deciding what they are worth in today’s dollars. Of course with emergency interest rates that sort of all gets screwed up. Plugging a 1% discount rate in there kind of makes time irrelevant. Pay me now, pay me later, meh. But if you use a Garth ™ portfolio for your time value of money at say 5 or 6%, then money has a time value and you want it now rather than later.

———————————

These emergency rates, which have been going on 13 years now, should cause anyone with a econ 101 course under their belt some cause for reflection. What is going on? It is an axiom that money has a time value, in fact that may be the only value it has aside from being a unit of accounting. A dollar today is worth more than a dollar tomorrow. That is why even “safe” investments like government bonds have to compensate bond buyers for the use of their money. It is why people take mortgages and car loans to make purchases now rather than paying cash at some distant date. A car is worth more now than a car is worth in 5 years (even if both are new at the time). This has to do with the value of the driving produced by the car over the present 5 years. It can’t be recovered once lost.

But 1% and below interest rates distort all that. When money has no time value, time has no meaning (at least in finance). There is no incentive to save for the future because the future and the present are now the same. Death has been vanquished because the discount rate on your 85th year makes it almost as valuable as your 60th year. Capital projects are impossible because the rate of return cannot overcome the risk of loss. Impossible monetization of assets like houses is in fact possible because there is no time value to the money. Principle plus interest becomes just principle, or approaches it.

We are living in an episode of the Twilight Zone, where money and time have no meaning. Death no influence. Law no power. Risk no reward. Labor no compensation. And prudence affords you no place in heaven. The sinner and the saint are now truly blessed and truly cursed in equal measure.

#25 Penny Henny on 09.27.21 at 2:21 pm

Another instance in which it makes sense to take your CPP at 60 is if you retired early.
I retired at 49 so by the time I hit 60 there will be 11 full years with no contributions, by the time I hit 65 there will 16 years on no contributions but the thing is you can only deduct so many of your no contributing years when calculating CPP benefits.
Another thing, if you are already at max CPP benefits then if your spouse was to die you would not be entitled to any survivor benefits.

#26 Dolce Vita on 09.27.21 at 2:22 pm

Took my CPP right at 60.

And they cut my OAS off. CRA and their “Additional revenue from CRA reducing tax gap”. Children born out of wedlock.

All YOUR FAULT GARTH and that investment advice of yours. Oddly, not missing it. Just readjusted a few growth ETFs into dividend ETFs and well, Garth’s your Uncle. More than offset lost OAS.

Still, it pisses me off. That OAS was my evil fun money for that je ne sais quoi.

—————-

#16 IHCTD9

No maybe about France/Italy.

ONLY 2 countries you can get a decent meal in ALL OF Europe.

If you want to die of starvation and drink sewer water espresso, suggested countries:

England, Germany, Nordics, Slovaks et. al. (save the Dalmatian Coast – Venezia influence), Poland, etc.

If you want deep fry:

Spain, Portugal (introduced what is now called Tempura to the Japanese; chili pepper etc. to India…Google “Which vegetables are brought by Portuguese to India?”).

If you want everything skewered and bleats baa:

Elláda.

And to all you know nothing Canadesi that will tell me how wonderful (and overpriced) Spanish Paella is, it’s called Risotto alla Milanese in Italia. Throw in some molluscs and you have your Paella. We serve it on a plate not some large pizza pan – the Spanish have no couth.

Culinary map of Europe according to Italia:

https://i.imgur.com/kU9d9me.png

#27 Penny Henny on 09.27.21 at 2:23 pm

#14 Ponzius Pilatus on 09.27.21 at 1:35 pm
58 S.Bby on 09.27.21 at 12:14 pm
I’m liking this new self-cleaning comment section.
———————-
Looks like it missed a spot.

////////////

Ha, funny Ponzie. One witty comment of your last hundred or so. That’s about your average.

#28 Nonplused on 09.27.21 at 2:25 pm

#6 None on 09.27.21 at 1:08 pm

“The goal is NOT to extract the most money and not leaving anything on the table.”

What other goal could there be? “Waste not want not.”

When a process is optimized, more widgets result from less inputs. The unused inputs can thus be used to make some other sort of widgets. The result is more wealth at lower prices.

Waste, on the other hand, is just that.

#29 Damifino on 09.27.21 at 2:28 pm

I am 70. I took CPP at 60. At that time, the penalty for going early was only 0.05% per month (i.e. 30% not 36%). Even sweeter then. I get the average amount.

I’ve not regretted it for a second. And I didn’t “need” it either. Not really. But, it was (and is) nice to have.

As Garth says, CPP is a supplement. Think of it as such. Here’s a formula you might find helpful:

bird + hand = 2 bush

#30 Deano East on 09.27.21 at 2:31 pm

A relative of mine was delaying their CPP till 65. A sudden illness and then cancer hit. Died at 64, not a dime of CPP was collected. The spouse is now applying for the survivor portion of their CPP. Take it 60.

#31 Left GTA on 09.27.21 at 2:32 pm

With our luck… socks will get rid of the early CPP option.

#32 Sara on 09.27.21 at 2:41 pm

#6 None on 09.27.21 at 1:08 pm
Deferring the CPP reduces longevity risk – one of the harder uncertainties to account for in retirement planning.

The goal is NOT to extract the most money and not leaving anything on the table. Piece of mind is worth something and knowing that you have decent money coming in, in the event you (horror) live much longer than you plan is not that bad of a thing.

================
I agree with you. The goal is to ensure your financial security regardless how long you live.

Reconsider taking CPP at 60 if your financial situation is such that you may end up struggling at 70+ with a reduced CPP pension. For some (such as those still working in their 60’s, those with family history of long lives, or those with no work DB pension and/or little savings) it can make financial sense to delay CPP beyond age 60. Beats a reverse mortgage!

Also, keep in mind that if you are still working while collecting CPP, your CPP pension gets added on to your income and taxed at your marginal rate. And if you get laid off or disabled, it gets deducted from your EI and disability insurance payouts.

Yes, I know, some may think you must be a failure at life if you don’t collect CPP at the earliest age possible, but who cares. If it makes sense for your personal situation, then wait. Remember you can’t undo your choice, so think carefully.

There is no one-size fits all answer.

#33 crowdedelevatorfartz on 09.27.21 at 2:43 pm

I max out on my TFSA and my RRSP’s annually and I also have a lot of money invested in non registered accounts.
I’m already in a high tax bracket and I dont need the CPP income to hand back to the govt in taxes..

Why not leave it until 65 or when ever I retire.

If I die early , no big deal.
I wasn’t suffering for lack of money and I have no dependents.

I’d rather wait for retirement in 5 years or less.

#34 Bdwy on 09.27.21 at 2:45 pm

Came looking for Felix’s comment first!

Rather gentle compared to what I expected. Esp with the cats looking sharp and attentive and the golden a bit slow.

#35 LSC on 09.27.21 at 2:45 pm

I believe the CPP process of determining your entitlements drops you lowest 84 months (not sure if it’s 84).
So if you retire at 60 but do not apply for CPP until 65 could those 60 months potentially reduce your entitlement? Your CPP contributions would be zero during that period.

Thanks in advance if someone knows if this could happen. It may be something to consider in making that decision.

#36 SunShowers on 09.27.21 at 2:46 pm

“These days one of those supports (company pension) has disappeared for 70% of the working population”

Well gee, it certainly seems to me that something this significant should be something people in power would be trying to rectify!

#37 Rakiki on 09.27.21 at 2:56 pm

The CPP dilemma! Wife and I both will have the gold-plated DB federal pension with a bridge from age 60 to 65. If we start to collect our base pension + bridge + CPP + other investment income at 60, it would push us up higher taxation wise (about a 31 % haircut on the CPP amount). Perhaps waiting until 65 when the bridge drops off would be wiser. I know it’s a nice problem to have, but the guaranteed rate of return is not unattractive. We’ll need to calculate this further.

#38 The joy of steerage on 09.27.21 at 3:04 pm

#35 LSC on 09.27.21 at 2:45 pm

I believe the CPP process of determining your entitlements drops you lowest 84 months (not sure if it’s 84).
So if you retire at 60 but do not apply for CPP until 65 could those 60 months potentially reduce your entitlement? Your CPP contributions would be zero during that period.

Thanks in advance if someone knows if this could happen. It may be something to consider in making that decision.
….

This fellow, who used to do it as his job, tells you how it all works… you can put the formalin in a spreadsheet and see how it works……

https://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/

But… it’s not just about numbers. – Garth

#39 Planetgoofy on 09.27.21 at 3:04 pm

#19 My Body My Choice on 09.27.21 at 1:54 pm
Then, just by coincidence, 3 months later, the world-wide “media”, declare the unmarked graves discovered in Kamloops a “genocide”.
————————————-
I know some folks that were involved in this and know the history.
The head stones were removed in many cases and they knew about this long time ago.
WAYYYYY back disease was ramped health care non existent.
Many many died from those situations.
My Dad was wacked in school by teachers, he witnessed things that he still has a large dislike for the Catholic Religion. Other kids called his family names and threw rocks at them.
He’s 82 now 50/50 French Irish.
Do your research…The news in 90% crap. I hold my tongue as I’ve pretty much had enough of this.
I went to school with natives and we got along and are still friends.
They could care less about this ongoing over hyped issues. (their words)
These days everyone’s fighting about everything. WE ARE ALL CANADIANS…..things change. Hell the USA nuked Japan….they moved on. They don’t have a “sorry we nuked ya” holiday.

#40 Dogman01 on 09.27.21 at 3:10 pm

#22 Faron on 09.27.21 at 2:10 pm
#20 My Body My Choice on 09.27.21 at 1:57 pm

I do not think Garth needs protection, he is not a snowflake and would certainly reject a “safe-space”. As should be the case for all adults.

“To suppress free speech is a double wrong, it violates the rights of the hearer as well as those of the speaker” – Frederick Douglass

I can’t fathom all the “safety seekers” in society that want to suppress views they do not like. Suppressing speech is a most definitely a characteristic of a Police State.

#41 Love_The_Cottage on 09.27.21 at 3:11 pm

You can see your CPP contributions per year and expected returns at the gov’t site here:

https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html

It’s a good idea to check that your contributions are correct before you retire.

Always take CPP at 60 should be fine tuned, IMHO, for example if you’re still working at 60 and in a high tax bracket and your TFSA and RRSP are maxed out.

#42 Andy on 09.27.21 at 3:14 pm

The government- worker haters here will love this, but there’s another element as well, Garth.

Many DB pensions have a provision for ‘bridge benefits’, for those retiring before 65. Some are in effect even at 55. This means you will get topped up, to the maximum level of what CPP would be at 65, from 60 or even younger.

That really tilts the balance in favour of collecting early, free double-dipping thanks to your pension fund!

#43 Nonplused on 09.27.21 at 3:18 pm

#32 Sara on 09.27.21 at 2:41 pm
#6 None on 09.27.21 at 1:08 pm

I agree with you. The goal is to ensure your financial security regardless how long you live.

Reconsider taking CPP at 60 if your financial situation is such that you may end up struggling at 70+ with a reduced CPP pension.

——————————

Folks, taking the CCP early is the only way to potentially maximize the total dollars received. It does not mean that at any point your CPP will drop while you are still alive.

If you make it to 70, great, but if you check out at 70 the earlier you start the more money you will receive.

As my uncle Carefree used to say, “A bird in the hand is worth two in the bush.”

#44 Penny Henny on 09.27.21 at 3:19 pm

#35 LSC on 09.27.21 at 2:45 pm
I believe the CPP process of determining your entitlements drops you lowest 84 months (not sure if it’s 84).
So if you retire at 60 but do not apply for CPP until 65 could those 60 months potentially reduce your entitlement? Your CPP contributions would be zero during that period.

Thanks in advance if someone knows if this could happen. It may be something to consider in making that decision.
//////////////////

This should help.

https://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/

#45 Daniel Hall on 09.27.21 at 3:39 pm

When deciding at what age one should start collecting CPP, isn’t a major consideration whether one is still employed and therefore at a a higher tax bracket? If so, then taxes will take a larger chunk of the CPP payments received.

If I plan to work until I am, say 68, then I think it might be best to wait until that age to start collecting CPP, as my income will be lower and taxes also lower.

#46 Timmy on 09.27.21 at 3:39 pm

Wrong…take it at 70. I’d rather die with money than worry if I’m going to have enough to live. If you don’t need the pension then delay as it provides a hedge if you live long. If you die, so what? Garth is wrong on this, on real estate, and on buying bonds. He was also wrong on calling the election, so take time with a grain of salt.

#47 Daniel Hall on 09.27.21 at 3:40 pm

When deciding at what age one should start collecting CPP, isn’t a major consideration whether one is still employed and therefore at a a higher tax bracket? If so, then taxes will take a larger chunk of the CPP payments received.

If I plan to work until I am, say 68, then I think it might be best to wait until that age to start collecting CPP.

#48 Faron on 09.27.21 at 3:40 pm

#40 Dogman01 on 09.27.21 at 3:10 pm
#22 Faron on 09.27.21 at 2:10 pm
#20 My Body My Choice on 09.27.21 at 1:57 pm

You sound triggered. Kinda sensitive even. Are your dendrites wilting?

No one asked for a safe space. It behooves us all to keep in mind that commenting here is equal to yelling in Garth’s living room or in your local library. Garth choosing to delete posts or close the comments has zero to do with free speech. I.e. you are 100% free to go yell elsewhere. This has nothing to do with suppression.

#49 Dirty Dan on 09.27.21 at 3:43 pm

> Those fears of a decade ago that the plan would be crushed by lousy demographics are kaput.

There are (2) variables at play. Number of old people and amount of money in the fund.

Can you be explicit that you’re referring to the fund increasing that is the driver!

Or did the demographics change as a result of the scary virus!?

“Adults 65 and older account for 16% of the US population but 80% of COVID-19 deaths in the US”

https://www.kff.org/coronavirus-covid-19/issue-brief/what-share-of-people-who-have-died-of-covid-19-are-65-and-older-and-how-does-it-vary-by-state/

If the MOST effected GROUP of all wasn’t enough to change the demographics for CPP, can we finally call the virus an over hyped event?

#50 SoggyShorts on 09.27.21 at 3:44 pm

Where can I check my CPP contributions? I swear I found it once but going through “My CRA” I can’t seem to again.

#51 My Dogma Ran Over Your Karma on 09.27.21 at 3:44 pm

Absolutely bang on Garth, I will be 78 years old before I start to lose my $200 a month difference, by collecting at 62.5.

#52 Dirty Dan on 09.27.21 at 3:46 pm

#43 Nonplused on 09.27.21 at 3:18 pm
#32 Sara on 09.27.21 at 2:41 pm
#6 None on 09.27.21 at 1:08 pm

I agree with you. The goal is to ensure your financial security regardless how long you live.

Reconsider taking CPP at 60 if your financial situation is such that you may end up struggling at 70+ with a reduced CPP pension.

——————————

The older you get the more hookers charge. You’ll need more money later in life if you want to maintain the same “lifestyle”. Take CPP later.

#53 facts on 09.27.21 at 3:47 pm

Harvard MBA first year and goes to remote learning due to covid outbreak.

95% of students, 96% staff vaccinated. Go figure.

#54 Peter on 09.27.21 at 3:55 pm

I am an long time immigrant from Greece, came in the early 1973. I worked all my life in a restaurant kitchen as a specialized cook, worked many hours, retired in 2010. I took my CPP as soon as it was available at 60 years old. Back then it a 6% per year reduction or 0.50% per month, not 7% per year reduction or currently 0.58% per month. I took at that in put it in RRSPs and took another $15,500 tax refund, now with all that CPP money I put in RRSPs, RRSP tax refund I have $89,000 in new principal, RRSP and TFSA and growing. I get my CPP, OAS for many years now.

The RRSP worth will be turned into a RRIF this year and I will take out 6.20% flat, $10,000 per year on the declining balance which will just surpass my minimum required CRA withdrawals per year.According to my tax accountant and long time friend who helped me with my RRIF and income tax returns, I will be able to claim my pension tax credit, $2,000+ my disability amount $8,437+age amount $7,637+ personal amount $13,229=$31,003 total taxable income that will be almost income tax free, small amount from Ontario heath tax+lower amounts tax credits can be claimed.

I get some interest $5,000 a year from my Ontario savings bonds and make my total income $36,500 a year CPP, OAS, RRIF, Ontario Savings bonds interest, paying very little income taxes, maybe $1,000 at most but get GST, HST credit, Ontario tax credits so it is a wash $0 income taxes. I got my $375,000 in my RRIF GICs, Ontario savings bonds and savings accounts, cashable GIC’s. I have my $16,000 a year left over each year after all my expenses, property taxes and so on. I put the maximum in my TFSA each year, $5,500 plus $10,500 a year in short term savings for now. I have am debt free for decades now and mortgage free since 2000. I have nothing to complain about my finances today at my age, 71 years old.

#55 Yukon Elvis on 09.27.21 at 3:58 pm

#39 Planetgoofy on 09.27.21 at 3:04 pm
#19 My Body My Choice on 09.27.21 at 1:54 pm
Then, just by coincidence, 3 months later, the world-wide “media”, declare the unmarked graves discovered in Kamloops a “genocide”.
————————————-
I know some folks that were involved in this and know the history.
The head stones were removed in many cases and they knew about this long time ago.
WAYYYYY back disease was ramped health care non existent.
Many many died from those situations.
My Dad was wacked in school by teachers, he witnessed things that he still has a large dislike for the Catholic Religion. Other kids called his family names and threw rocks at them.
He’s 82 now 50/50 French Irish.
Do your research…The news in 90% crap. I hold my tongue as I’ve pretty much had enough of this.
I went to school with natives and we got along and are still friends.
They could care less about this ongoing over hyped issues. (their words)
These days everyone’s fighting about everything. WE ARE ALL CANADIANS…..things change. Hell the USA nuked Japan….they moved on. They don’t have a “sorry we nuked ya” holiday.
++++++++++++++++++++++++

You are spot on. I am 72 and spent 12 years in the “Catholic school system”. Four of those years at a residential school. I knew a lot of kids from other residential schools as well. Many native kids were sent to the schools as day students by their parents. If native parents neglected or abused the kids they were forcefully removed and put in the schools. Just like if you neglect or abuse kids today the government shows up and puts them in foster care. There was no genocide or mass graves. Total bs. There were abuses by individuals then just like there are abuses by individuals now in schools and foster care. No genocide or nuns with hatchets hiding in the closets. No mass unmarked graves. Just old cemeteries with crosses or headstones worn away by time. And suckers who believe in Dracula and the Boogey Man and some who try and profit from the lies. Bombs away you wokesters.

#56 Dr V on 09.27.21 at 4:01 pm

25 Penny – both points are as I also understand them.

Another situation arises is if married, and both retire early, but delay taking CPP, then you are depleting personal resources. Let’s say you retire in your early 60s, and start drawing down your RRSPs. If one of you exit early, you lose all/most of one CPP, all of one OAP
and now potentially have a greatly reduced RRSP.

#57 Ponzius Pilatus on 09.27.21 at 4:02 pm

#24 Dolcius
Pretty offensive if you ask me.
Another example of how wannabe citizens of a country are more chauvinistic than the natives.
My Father in Law who came from Hunkyland, on his first trip back home, refused to speak Hungarian with his relatives.
My wife who spoke broken Hungarian had to translate everything from his broken English.
Can’t make this up.
Only their customs of hospitality towards even idiot relatives, kept them from kicking his sorry ass out.

#58 Doug t on 09.27.21 at 4:02 pm

#39 planetgoofy

YUP

#59 Capital One on 09.27.21 at 4:10 pm

But doesn’t delaying your CPP mitigate the risk of outliving your savings?

CO

#60 calgary rip off on 09.27.21 at 4:14 pm

Thanks for the explanation of CPP.

Another way to increase wealth is by proper nutrition and exercise. Oxidation and inflammation are often cruel to the body.

Over this past weekend I saw countless patients with coronary disease. Diabetes, smoking, and time simply are not nice to the heart.

What to do? Dont smoke, drink, and keep diabetes away. Eat healthy and exercise. These habits will pay you by keeping you away from doctors. Often once you need to see a physician, the damage is done irreversibly. I see this over and over at my work.

Vitamin C is your friend for minimizing inflammation as is vitamin D3/K. Vitamins and good nutrition are not expensive. Alcohol is expensive. The only good thing about alcohol is the sensation of feeling silly about your problems for a couple minutes. An easier way to feel this sensation is ice cold showers. After about 2 minutes in the ice cold the feeling is similar to a stiff drink. And the residual effects are a nervous system more resistant to stress, parasympathetic CNS dominance, and less inflammation. The only limiting factor is mental toughness and discipline. Mr. Wim Hof outlines many different free ways to stay healthy. Worth $$ and yet free and can be done by “elderly”.

I made much money $3K over the last weekend seeing what not to do in terms of health. Much of this is going to go to taxes.

Wim Hof techniques = $$

#61 Planetgoofy on 09.27.21 at 4:17 pm

#55 Yukon Elvis on 09.27.21 at 3:58 pm
————————————-
YUP Yukon. So much miss info.
Its all political maneuvering and were paying for it….again.
Best to you!

#62 Faron on 09.27.21 at 4:20 pm

#69 Dr V on 09.27.21 at 3:17 pm
63 Faron

keep those high earners productive with continued incentive.

Yes, treat all income as income and tax it mega progressively. That’s a coherent view.

This trope about high earner motivation is one that is heard a lot but never backed up. I don’t buy it or think at best it’s way overstated. A raise is a raise. If a raise means landing in a higher marginal tax bracket, one still gets more money. If one is motivated and talented and driven enough to try to hit big, then the tax rate won’t stop them.

Show me the studies that suggest progressive taxation suppress motivation. What’s more likely to be true is that progressive taxation keeps lower earners more comfortable which drives improved productivity and increased consumption thus compensating the high earner class in a general sense.

Anyhow, still waiting for comments about my sliding inclusion rate idea.

#63 Anthony on 09.27.21 at 4:22 pm

This is true to take your CPP early for men more so than women. Men usually live less longer and men mot of the time have more physically demanding jobs and get worn down sooner. They are also making it more of a penalty to take your CPP early compared than just 10 years ago.

Myself and my wife’s goal really is to have at least 25 times of our last years employment income by retirement. In our case, it was $87,000 a year gross. We are only 50% there as we are both 49. Hopefully, we get there. We have no workplace pensions and no union pensions so we are putting as much as possible in our RRSP’s and TFSA’s since 2009, non-registered accounts for many years now.

#64 Steve French on 09.27.21 at 4:23 pm

What I want to know is why are Canadians not selling their $2 million dollar back alleyway micro-homes in Toronto and enjoying a luxurious retirement in ….

… Detroit Michigan.

Check it out– you can live in an absolute castle for well under a mill USD.

Which is minor pocket change for most Canadians who rode the massive real estate boom.

US $750,000:

https://www.trulia.com/p/mi/detroit/1920-lincolnshire-dr-detroit-mi-48203–2050526715?mid=0#lil-mediaTab

This is yours for only US $900,000- in Grosse Point just across the river from Canada

https://www.trulia.com/p/mi/grosse-pointe-park/1040-harvard-rd-grosse-pointe-park-mi-48230–2050830146?mid=0#lil-mediaTab

And Detroit has grit and character… Anthony Bourdain loved his visits there.

#65 The sweet joy of steerage wisdom on 09.27.21 at 4:37 pm

#52 Dirty Dan on 09.27.21 at 3:46 pm

#43 Nonplused on 09.27.21 at 3:18 pm
#32 Sara on 09.27.21 at 2:41 pm
#6 None on 09.27.21 at 1:08 pm

I agree with you. The goal is to ensure your financial security regardless how long you live.

Reconsider taking CPP at 60 if your financial situation is such that you may end up struggling at 70+ with a reduced CPP pension.

——————————

The older you get the more hookers charge. You’ll need more money later in life if you want to maintain the same “lifestyle”. Take CPP later.
……

Hey DD.. think yer onta something..

For me it’s either lotsa beer at 60… or lotsa beer and whiskey and women at 70….. choices.. choices

#66 sean on 09.27.21 at 4:39 pm

RE: #50 SoggyShorts on 09.27.21 at 3:44 pm

Where can I check my CPP contributions? I swear I found it once but going through “My CRA” I can’t seem to again.

——-

Via the Service Canada website:

https://www.canada.ca/en/employment-social-development/services/my-account.html

This used to be linked to the CRA site, but I think they stopped switching between sites when they increased security on the CRA site. I believe this was shortly after the various COVID relief programs were introduced.

#67 Sara on 09.27.21 at 4:40 pm

#43 Nonplused on 09.27.21 at 3:18 pm

Folks, taking the CCP early is the only way to potentially maximize the total dollars received.
++++++++++++++++++

For some perhaps. What if both your parents are in their 90’s and you have no known health issues?

Besides, not everyone’s goal with respect to CPP is or should be to “maximize the total dollars received”.

#68 Sara on 09.27.21 at 4:43 pm

#50

I think you have to go to your Service Canada acccount for that.

#69 Sandra on 09.27.21 at 4:44 pm

My uncle is obsessed with being cheap, saving. He really likes being cheap and his main motivation for getting cheaper for years now is the low GIC rates he says he is being forced to accept. He was pitched to go in bonds but he does not like the price changes, tax complications in bonds and funds. He knows the government and Bank of Canada has a vested interest in paying less interest on all debts and keeping the real estate game going.

He basically cut his expenses and taxes by $225,000 over the last 8 years and he is going for even more this year as he will be getting his early CPP in October-2021. He is trying for $325,000 over the next 8 years. The 2.2% to 2.5% GIC rates he is getting now he estimates is being topped up now to 5.6% a year equivalent GIC rate over an 8 year period because he is so cheap cutting his expenses and taxes.

When he sees the inflation numbers and cost of living, he smiles and keeps being cheap. He attributes reaching his goals fro 3 things, no debt, pay cash, in full always, cut taxes as much as possible, be cheap on things you really can be cheap and make sure being cheap does not cost you more in the long run.

#70 Big Bucks on 09.27.21 at 4:49 pm

Basic stuff but reminders are always helpful.Thank you.

#71 Ponzius Pilatus on 09.27.21 at 4:52 pm

Count me in.
Listened to Garth’s advise and went all in at 60.
Never looked back.
Advise worth the admission to this exclusive (lol) club.

#72 Ponzius Pilatus on 09.27.21 at 4:57 pm

#65

The older you get the more hookers charge. You’ll need more money later in life if you want to maintain the same “lifestyle”. Take CPP later.
……
—————-
Darn it.
Did not factor that in.
Well, gotta cut down on the booze.

#73 Edward Bear on 09.27.21 at 5:03 pm

#19 My Body My Choice

If I were you I’d make a choice for an eye exam asap, this column was all about CPP not CCP or CPC, CPR, CCM, CBC or CTV. ;-}

#74 Jason Reed on 09.27.21 at 5:05 pm

I disagree, Garth, and so does the Canadian Institute of Actuaries and the National Institute on Ageing.

Delaying CPP increases wealth and improves retirement income security. Risk in retirement means living a long life with insufficient income, not dying young.

https://qvinvestors.com/investing/blog/1193

#75 Linda on 09.27.21 at 5:07 pm

#26 ‘Dolce’ – given that you can’t get OAS prior to turning age 65, can’t see how you lost your OAS benefits upon taking CPP at age 60. Care to change your story?

As for when to take your CPP, that all depends on individual circumstances. I took mine at 60, because it didn’t make any sense to wait. I have a workplace pension so from my perspective better to take the money now & use it to enjoy my retirement years while I’m still able to, as Garth very wisely suggests. It is commonly accepted knowledge that retirees aged 60+ tend to spend the most $ & be the most active in their first decade of retirement. While there are always outliers who buck the norm, most retirees tend to start slowing down once they are in their mid-70’s & by the time most reach their 80’s the activity level drops substantially. So while one can wait & get more, my question is what is the goal? To be the richest girl or guy in the graveyard?

#76 SoggyShorts on 09.27.21 at 5:08 pm

ATTENTION FIRE COMMUNITY!

I kinda knew I wouldn’t get CPP but just how sad the amount is might surprise some of you:
After 10 years of Jobs followed by 10 years of a Career that paid dividends instead of wages and then retiring at 40 I’m looking at

$140/mo @ 60
$196/mo @ 65
$278/mo @ 70

I only paid 12K into it, and I figure with a 4.4% return that would be 54K after 35 years and would kick off 197 per month (again at 4.4%)
Of course, I don’t get the 54K principal, but I guess that balances with the 4.4% return being 100% government guaranteed?

https://cppcalculator.com/

Out of curiosity, I added 10 years of max contributions which would have cost me 57K in contributions (employer and employee portions)

benefits go up to 379/531/755 which is a ~3.4% return (and 188K lost principal!)

#77 NOSTRADAMUS on 09.27.21 at 5:10 pm

BONEY FINGERS!
The general consensus that seems to run deep in the mind of a great number of people today, is that, “if you work your fingers to the bone, all you get are boney fingers.” Why bother, brother? Sooner, rather than later, the financial clock will strike midnight and all the overindebted Cinderella’s will turn their tired, teary eyes to the government pleading, “help us, save us, touch us, heal us.” This time the governments cupboard will be found to be bare. It is obvious for those who take the time to think, and actually see the problems associated with being overindebted, but no one is screaming because the party is ongoing, for now. I am on my throne and I will not step down.

#78 Steven on 09.27.21 at 5:19 pm

I love to hear how everyone thinks they are going to live well into their 80’s and 90’s. Even mid- seventies there is a good chance you will need assistance of some kind. You will get cancer, start losing your memory, have something go wrong. Longevity has only increased by medications. Take the money now. You paid for it. If you wait so you can get higher returns the only thing that will get you is good meals at an old age home.

#79 Freda on 09.27.21 at 5:22 pm

As long as you are making $58,000 a year and with small increases 2%+ a year in your pay and working in your mid to early 20’s to near or until 60, you can get the maximum early CPP which is currently $782 a month. If you are 65, it is $1,203 per month.

I am surprised that most don’t get close to the maximum CPP. My parents get $3,650 a month together in CPP, OAS or $43,800 a year in CPP, OAS. They live of $24,000, pay the taxes and still have $10,000 a year at the end of each year.

They have no RRSPs but have $185,000 in TFSA’s and $500,000 in REIT’s, banks stocks, GIC’s and 2 rental properties.

#80 S.Bby on 09.27.21 at 5:24 pm

It’s not what you earn, it’s what you save.

#81 Penny Henny on 09.27.21 at 5:38 pm

#50 SoggyShorts on 09.27.21 at 3:44 pm
Where can I check my CPP contributions? I swear I found it once but going through “My CRA” I can’t seem to again.
///////////////

My belief was that you had to request it and it was then mailed to you.

#82 Whinepegger on 09.27.21 at 5:39 pm

Garth, if one doesn’t need CPP/OAS would it make sense to delay taking them until 70 and withdrawing that amount from RRSPs and transferring it into TFSAs? Keeps one in a lower tax bracket. What say you?

#83 Penny Henny on 09.27.21 at 5:40 pm

#52 Dirty Dan on 09.27.21 at 3:46 pm
#43 Nonplused on 09.27.21 at 3:18 pm
#32 Sara on 09.27.21 at 2:41 pm
#6 None on 09.27.21 at 1:08 pm

I agree with you. The goal is to ensure your financial security regardless how long you live.

Reconsider taking CPP at 60 if your financial situation is such that you may end up struggling at 70+ with a reduced CPP pension.

——————————

The older you get the more hookers charge. You’ll need more money later in life if you want to maintain the same “lifestyle”. Take CPP later.
//////

Why is that? Does it take longer?

#84 Penny Henny on 09.27.21 at 5:49 pm

#56 Dr V on 09.27.21 at 4:01 pm
25 Penny – both points are as I also understand them.

Another situation arises is if married, and both retire early, but delay taking CPP, then you are depleting personal resources. Let’s say you retire in your early 60s, and start drawing down your RRSPs. If one of you exit early, you lose all/most of one CPP, all of one OAP
and now potentially have a greatly reduced RRSP.
///////////////

My understanding on losing the CPP if a spouse exits early, expect a reduction of about 1/3 as the survivors benefit, unless of course you are closer to the max CPP benefit in which case there could be zero.

Example
John- $700 CPP
Jane- $600 CPP

John croaks
Jane get $600 CPP plus (.67)(700) survivors benefit

these are just rough numbers of course but close enough to plan

#85 pPrasseur on 09.27.21 at 5:54 pm

Canada doing very poorly at innovation, thankfully we are beating Slovenia, Poland and Russia:

https://www.bloombergquint.com/global-economics/south-korea-leads-world-in-innovation-u-s-drops-out-of-top-10

One of the main driver of innovation is capital gain.
That is why taxing capital gains more is not an option as it would only make things worse, this is the last thing this economy needs.

Ultimately what makes an economy prosperous is innovation.

T2 may not know this but I’m pretty sure enough powerful people in the Liberal party still do.

That is why (fearmongers take notice…) taxing capital gains more just won’t happen.

#86 Dr V on 09.27.21 at 5:56 pm

62 Faron

“If a raise means landing in a higher marginal tax bracket, one still gets more money. If one is motivated and talented and driven enough to try to hit big, then the tax rate won’t stop them.”

I’m not talking about a raise (yes always take the money). I’m talking about the additional time and effort required in order to earn more or grow your business, so more like your second point. Do you know what many do in their attempt to hit big? They incorporate. A tax planning tool used by professionals and both small and large business. And a hassle. Time and money spent on lawyers and accountants.

IIRC, when New Zealand reformed taxes years ago, they dropped the top marginal rate drastically, but did away with many corps. Way simpler with minimal effect on revenue.

Sorry I do not recall your proposed inclusion rate(s). Did not see all of yesterdays comments.

Apparently NZ does not have a general cap gains tax,
but taxes frequent stock trading as income (agreed on
that) and also has invoked a house spec tax (no problem with that either)

Sweden has a constant tax rate of 30% on cap gains. A bit higher than our current inclusion of 50% but a bit lower than a 75% inclusion for top earners.

#87 Shawn on 09.27.21 at 6:11 pm

Hey S.Bby, you are so right. It is amazing how much my brother has saved from his minimum wage jobs when he was a teenager. In 4 summers he saved $10,000. This is back when minimum wage was $4.25 or $4.50 an hour I believe.

He actually bought some the 5 major bank stocks in the 90’s with they are worth $110,000 now. He is smart not to sell them.

#88 Dr V on 09.27.21 at 6:13 pm

76 – Hi soggy. My accountant always had me at or near the CPP limit. I was looking at my contribution sheet and was surprised there were a few years I did not max. I knew these years were OK for business, but then I recalled some income splitting with Lily. She also had another side gig so she was making the max contribution in those years. I’m projecting that we will be almost even steven on our payouts.

I have heard the suggestion of the “CPP holdiay” more often these days as the contribution rates are getting so high as to offset the benefit.

#89 Leftover on 09.27.21 at 6:13 pm

“The reduction in benefits for early payout is 0.6% for each month prior to your 65th birthday. That’s about 7% a year, or a total of 36% less for collecting at 60 as opposed to 65”

So, a 7% annual return? Tax Free? (sort of)

There’s obviously more than one way of looking at it, and if you can direct deposit your CPP into a TFSA from 60-65, good for you, even better if you croak at 70.

There’s also the issue of the higher CPP at 65 possibly triggering a bigger OAS claw-back.

Details, and above my pay grade to figure out. I’m gonna hang up my spurs at 65 and worry about it then.

#90 crossbordershopper on 09.27.21 at 6:15 pm

the cpp is a scam, everything about it the $2500 death benefit fixed since 1988.
the worst is the simple point and i want everyone to understand this.
A PERSON WHO HAS NEVER WORKED A DAY IN THERE LIFE IN CANADA, WILL RECIEVE MORE FROM THE GIS AND OTHER PROVINCIAL SUPPLEMENTS WHERE AVAILABLE,WHEN THEY RETIRE THEN 80% OF PEOPLE RECIEVING THE CPP WHO HAVE WORKED THERE ENTIRE LIFE AND PAYING INTO THE PROGRAM.
that is why, i am self employeed, never pay a penny into the cpp program and intend to recieve nothing from the cpp program, so i can max out my gis to the max. tfsa withdrawl is tax free, corp account is just tax deferred, you can make 5K a year without effecting the gis payments. paid off house, which is nice, since you have to live somewhere and its cold country. the portfolio is tax deferred long term growth stocks.
yes when you are 65 you can have a paid off million dollar house, a million in the corporate account, a million in the tfsa and a million in your trading account can all be acomplished by being self employeed, paying out dividends, not paying taxes, (wife and 18 year old daughter as well) long term growth tax deferment in the us market index with no fee’s. and you will be the top 1% of people in Canada.
its not that hard. its easier in the us of course but can still be done in Canada.

anyone can do it, its all about structrure, the cpp dies with you, well 60% to the wife first, but it evaporates with you. wrong structure. plus you can make more than the cpp pays, the cpp makes good money, no problem good investments doesnt mean the little people are going to see any increase, just inflation etc.
but millions of canadians are working for nothing, really nothing, they would recieve more if they never worked a day in there life. look it up. so far alberta and sask are the best province to retire poor. well a po box number you dont really need to live there.

#91 Frasier on 09.27.21 at 6:19 pm

pPrasseur, so what is their 5% selling tax on primary residences maybe others too if sold in 12 months. It looks like a step closer for a primary residency capital gains tax to me. Just like most taxes, they always go higher.

I remember the PST was 3% when it first came in and now is 8%. Well going by that metric, a 2.66 times increase means that a 13%+ selling tax on primary residences in Canada years later could be used. Also, they can also extend it to many other investments, properties and shorten the time period.

#92 Voice Of Reason on 09.27.21 at 6:21 pm

I’m surprised the [email protected] mentioned delaying CPP until 65. Usually these “advisors” recommend you take early CPP so that you don’t draw down on your investments. Drawing down on your investments means less compensation for the “advisor”!

#93 Ponzius Pilatus on 09.27.21 at 6:23 pm

#20 My Body My Choice on 09.27.21 at 1:57 pm
About the photo:

“I’ve been a police officer for 23 years …. I’d suggest you just shut down the comments for a month or two and perhaps even permanently …”

Spoken like a police officer in a police state.
——————
Actually, the police officer has a point.
Some of the posters here are right of Ghengis Khan.
From  my centre-left view, too many for my liking.
But it’s Garth’s blog.
We are all just guests here.
In my life, I’ve learned that you cannot reason with people who hold extreme positions.
You can just point out factual and/or logical inconsistencies, and walk away.
However, not giving them an outlet, drives them underground where their ideas grow amd multiply like mushrooms, and then they can become dangerous to themselves and others.
So, I say, let them rant as long it’s  within the boundary of the law.
Which, of course, changes with the prevailing Zeitgeist.
Final note:
Even people like Goofy should have a soapbox.

#94 Harold on 09.27.21 at 6:30 pm

whinepegger, you may want to convert some of your RRSP to a RRIF as the first $2,000 pension credit makes it almost income tax free. You only pay 1.35% not 20.05% on the $2,000 RRIF income. This only applies to those 65 and older.

My wife and I take out $4,000 a year in a RRIF when we started 65. It also depends how big of an RRSP you have. If it is less than $100,000 to $150,000 usually, it is better to let it grow and RRIF it at 71. If you have other income sources, more pensions besides CPP, OAS and interest, dividends, capital gains etc. it may be better to delay your CPP if the taxes will take most of your benefit getting it earlier.

#95 Sheldon on 09.27.21 at 6:39 pm

Sandra, my parents got rid of their second vehicle and eat out less even before the pandemic. They have saved $15,000 a year just doing these 2 things. The monthly car payments, gas, insurance, repairs and maintenance, dinners 3 to 4 times a week, eating out for lunch each work day. It really added up.

I guess when they started thinking about how both their CPP, OAS combined was only $3,000 a month compared to their salaries of $7,000 a month, it was an eyeopener.

#96 Chris on 09.27.21 at 6:41 pm

I’m very embarrassed for Rob. The Penguin is only the Aventura brand now, not all of CIBC. Didn’t you get the memo on the new branding last week.

#97 Alberta Ed on 09.27.21 at 6:43 pm

Take the money and spend it on something you and your wife will both enjoy. Tempest fugit.

#98 Linda on 09.27.21 at 6:48 pm

#79 ‘Freda’ – in order to get ‘the max’ CPP you have to work at least 39 years out of a possible 47 years between age 18 & age 65, plus pay maximum CPP contributions for the majority of those 39 years. A lot of people do not achieve those two criteria to get ‘the max’. Further, a lot of people choose for various reasons to start taking CPP at age 60. The reduction for taking CPP ‘early’ is not reversed once you reach age 65. What you start with is what you get, plus annual COLA based on the official inflation rate.

If your parents are both receiving maximum CPP, here is the catch. As soon as one parent dies, the other loses the income the deceased was receiving because the government only pays ‘the max’ per recipient. They do not provide a survivors benefit if the survivor is already receiving the maximum CPP. Ditto for OAS. This can come as an unpleasant surprise to the surviving partner, so good thing your folks have $ set aside.

#99 yvr_lurker on 09.27.21 at 6:50 pm

#62 This trope about high earner motivation is one that is heard a lot but never backed up. I don’t buy it or think at best it’s way overstated. A raise is a raise. If a raise means landing in a higher marginal tax bracket, one still gets more money. If one is motivated and talented and driven enough to try to hit big, then the tax rate won’t stop them.

————
I agree but only to a point. In my view there is a marginal tax threshold where the incentive to seek out promotions which involve much more work is really minimized. For me, I am close to this threshold. Would you be super-keen to be department head at your university for an extra 10K per year, where you have a huge stressload being on speed dial to the Dean and having hordes of people sending you emails all hours of the day and having to sort out many challenging things. The workload would increase dramatically, and likely all the stress of this for a 3–5 year term would impact your health. At 54% marginal, and taking into account increased internal fees, you’d see about 375.00 per month extra in your paycheck. Not worth it at all. Much better to simply find ways to cut costs; do a repair job yourself that one would normally farm out to high-priced contractors etc…avoid buying stuff at Whole Foods etc…why bother with some over-priced restaurant meal when you can become more adept in the kitchen to vary the menu. The above describes a recent scenario that I have direct experience with.

Then, when they put it up to 60% marginal shortly in the next budget, the situation will be crystal clear.

This does not mean that progressive taxation should be modified. It only indicates that there are limits.

#100 IHCTD9 on 09.27.21 at 6:53 pm

Looking at all the comments and how different everyone’s situation can be, probably best to shell out a bit for pro input. They see a lot of different cases, and know a lot of the little “gotcha’s!” already. That’ll at least get you a solid starting point to think on what you’d like to do.

#101 espressobob on 09.27.21 at 6:55 pm

Our time with canines,felines or other species is what captures the human condition.

Sometimes it seems as though these creatures have much to teach us.

#102 crowdedelevatorfartz on 09.27.21 at 6:58 pm

@#83 Penny Henny
“Why is that?”

++++

Elderly Health Insurance.

#103 ogdoad on 09.27.21 at 7:00 pm

Never count on anything that you can’t vouch for. Save and invest your own money and CPP and OAS will be just another thing you can dangle over your peers for needing to rely on – where you don’t.

How about the herds buying up tesla’s and shanties b/c they have a DBP to rely on and spend their entire paycheck every month. Then bitching b/c they have to work for 30+ years to receive one in full (sentiment amongst plenty of teachers/ gov. workers I have spoken with).

Just another example of our duped, entitled society who are unable to think for themselves therefore need rescuing in the end. Even the perception of of being safe will do…to the duped.

Og

#104 Sheena on 09.27.21 at 7:12 pm

Linda, my parents don’t get the maximum CPP but they know they will lose at least 50% of their CPP when one of them passes away and 100% of their OAS. This is why they saw their insurance broker and pay $350 a month for a $300,000 life insurance policy.

They take some of their CPP, OAS they don’t need and did this. The $300,000 just principal would cover about 18 to 20 years of CPP, OAS when one spouse passes away. They are both 67 now.

#105 IHCTD9 on 09.27.21 at 7:19 pm

#91 yvr_lurker on 09.27.21 at 6:50 pm

At 54% marginal, and taking into account increased internal fees, you’d see about 375.00 per month extra in your paycheck. Not worth it at all. Much better to simply find ways to cut costs; do a repair job yourself that one would normally farm out to high-priced contractors etc…avoid buying stuff at Whole Foods etc…why bother with some over-priced restaurant meal when you can become more adept in the kitchen to vary the menu. The above describes a recent scenario that I have direct experience with.
————-

100%. I did my roof 2 years ago, and redid my driveway last spring. Saved near 10 grand between the two. Not everyone can do this (ie I rebuilt the 1000.00 basketcase dozer that did the driveway myself over 5 years, and I worked for years in construction to allow me the knowledge to do the roof), but you can get started with the learning anytime, and the sooner the better.

Best of all, while your saving thousands, you also sidestep the tax payable on same simultaneously.

Everyone has different gifts and abilities. My old drag racing hobby gave me practical mechanical experience (and I am naturally inclined to this stuff), my youth employment and post secondary education taught me construction and landscaping, my career taught me welding and machining and gives me access to the equipment. So while I no longer race, or am involved with construction/landscaping, the knowledge gleaned from my time thereof, my new heavy equipment hobby, and ongoing career in the steel industry- all pay dividends on the home front. Everyone should be exploiting their talents to keep taxes and cost of living down! :)

#106 Mean Gene on 09.27.21 at 7:24 pm

When in doubt split the difference, take CPP at 62 and 6 months, quit thinking in absolutes, 60, 65 or god forbid in your 70’s… forget about it.

Enjoy life before the lights go out or your health goes down the swirly, which it will.

#107 the Jaguar on 09.27.21 at 7:25 pm

@Brian —–About the picture.

““This is Sugar x 4. She doesn’t worry about cats or anything other than people and food,” writes Brian. “Perhaps it’s food and peeps. Either way, she’s a doll and we love her to bits. I have a comment about the comments section. I’ve been a police officer for 23 years. “+++++

Officer Brian, in the spirit of equal recognition and respect where due, don’t you think you should tell us the cats names, too? The one on the left looks like he might respond to ‘Scully’, and the less serious one on the right ‘Bobbie” (short for Bobcat).

Of course, if you’re reading this comment, you’ve blown your cover re: the ‘don’t care about the comments’ thingy. Please respond to this urgent and compelling enquiry. You’ve been read your rights and you are on the witness stand. Oh. And thank you for your service. A police dog once caught a bad guy stealing stuff from my house, so I like dogs too….. He was more interested in catching perps than hamburgers, unlike that fluffy orange opportunity seeking creature behind the cats…..

#108 Shawn Allen on 09.27.21 at 7:30 pm

Defined Benefit Pension CPP bridging

#42 Andy on 09.27.21 at 3:14 pm
The government- worker haters here will love this, but there’s another element as well, Garth.

Many DB pensions have a provision for ‘bridge benefits’, for those retiring before 65. Some are in effect even at 55. This means you will get topped up, to the maximum level of what CPP would be at 65, from 60 or even younger.

That really tilts the balance in favour of collecting early, free double-dipping thanks to your pension fund!

***********************************
To my knowledge you are right that government DB plans offer CCP bridging for those that retire at 55 to I guess 64.

Typically the idea is to levelise things so that insteadof getting “a raise” when CPP kicks in at say 65 you get some CPP early but probably areduced amount later.

On the Alberta Public Service Pension plan that’s how it works. Taking CPP bridging is just borrowing from your own future CPP. I would advise against it unless the money was needed.

But I had a friend who took CPP bridging from the Nova Scotia government Pension at age 55 and it looked like more of a pure gift. They gave a CPP equivalent amount until at least age 60 and the CPP after that was not reduced from the normal level.

Anyhow each pension plan may be different so retirees should be careful what option they choose.

I don’t know if taking CPP bridging tips the balance to earlier taking of actual CPP or not.

To me. CPP early depends on whether you need the money, your health, your martial status and your tax status. ONE SIZE DOES NOT FIT ALL in this case.

#109 Faron on 09.27.21 at 7:30 pm

#86 Dr V on 09.27.21 at 5:56 pm

62 Faron

Aren’t incorporated business’ owners all taking divvies and a low income at that point? So why should they even care what the top marginal rate is? Given that, ye ol’ Doctorb would potentially experience a shift in bracket due to earnings increase (this is often cited in this comments section as a reason not to raise taxation on upper earners). Lawyers as well? I just can’t imagine anyone balking at shooting for a professional level degree and career because of the slightly higher marginal rates that may be implemented. This seems like a fantasy to me but if you have research that shows it to be the case, please share it.

My proposed sliding cap gains inclusion for equities would tie the inclusion rate to central bank set interest rates. If it is indeed true that encouraging risk-taking investing is a good thing, then that would be most needed when CB rates are high because the alternative, bonds, are risk free and return well at that point. Right now, with rates in the dirt, no additional propping of equity markets is needed, they attract plenty of money in case you haven’t noticed. share prices are high by almost every metric indicating that plenty of money is flowing into equities and that incentives for doing so are not needed.

A sliding rate is my compromise assuming that incentives are ever needed for equity risk taking (frankly, I think the higher returns are plenty).

Cheers

#110 wallflower on 09.27.21 at 7:33 pm

I find that people like
#12 alexinvestor on 09.27.21 at 1:19 pm
are oblivious to the soi-disant healthy folks who die between 65 and 70. Another one bit the dust this week that I know.
I started mine at 60 on this basis alone – so many dead before 75. My breakeven age is 76.

Regarding comments – about a month hiatus where you post ONLY the comments you like.
Go for it!!!!!!!

#111 SoggyShorts on 09.27.21 at 7:37 pm

#81 Penny Henny on 09.27.21 at 5:38 pm
#50 SoggyShorts on 09.27.21 at 3:44 pm
Where can I check my CPP contributions? I swear I found it once but going through “My CRA” I can’t seem to again.
///////////////

My belief was that you had to request it and it was then mailed to you.
******************
I found it on the My services Canada site, not My CRA. In my memory, they were one and the same, but they are not.

#112 crowdedelevatorfartz on 09.27.21 at 7:49 pm

@Felix
“Thank you for the cat photos. There is still a dogawful mutt in the background, but at least he is outnumbered.”

+++

The cats are both staring at a toy.
The Dog is patiently waiting for it all to be over.

#113 TurnerNation on 09.27.21 at 8:03 pm

War on Small Business and independence. The “Passports” are the next step in this.
The CV capacity-limit rules. Our elites do not want us socializing, nay organizing in public areas.

https://thestarphoenix.com/news/economy/somethings-got-to-give-restaurants-slash-hours-trim-menus-as-unprecedented-worker-shortage-cuts-deep/wcm/dac2cd5b-6fa0-4992-abb5-9d9c2e2c753b
‘Something’s got to give’: Restaurants slash hours, trim menus as worst worker shortage ever cuts deep There couldn’t be a worse time for this unprecedented labour shortage as restaurants struggle to make up pandemic losses

—–
—–
— Control over our Travel. WW3 – wartime rationing. Army even! Here in the Former First World countries. A forced nudge toward electric cars? Expensive, limited range. “(Don’t) Get Your Kicks on Route 66”

https://www.zerohedge.com/commodities/panic-buying-leaves-90-gas-stations-uk-cities-dry-boris-considers-calling-army-resupply
“UK politicians panic as similarities to the 1970s-style “winter of discontent” of shortages and socio-economic distress have already materialized. Prime Minister Boris Johnson requested the Army to begin fuel deliveries to petrol stations.”

…….

But the hospital capacity guys!! Why they shut down the world right?

https://www.syracuse.com/health/2021/09/upstate-university-hospital-to-shutter-ors-blaming-ny-vaccine-mandate-for-staff-shortage.html
“Upstate University Hospital to shutter ORs, blaming NY vaccine mandate for staff shortage”

#114 SoggyShorts on 09.27.21 at 8:06 pm

#88 Dr V on 09.27.21 at 6:13 pm
76 – Hi soggy.
Hola Doc.

You’re incorporated, right? So paying yourself means paying 9.9% CPP? Up to the max anyways which is ~5K per year? It’s tough to get that back.

Maybe have your accountant take another look at dividends vs salary.
Gaining RRSP room and retained earnings etc add more variables than just double CPP so careful consideration is required.

At the very least, if you plan to take CPP at 60, then at ~52 I would switch to paying dividends since the lowest 8 years of CPP contributions give you nothing back.

#115 Habitt on 09.27.21 at 8:24 pm

Ya gotta wonder what the cpp is for the bottom 40% that don’t pay taxes. Must be huge lol. Oh right they get more freebies like gis. That gets clawed back if they have other income lol. Wonder what the average wage (not income) was for those folk. In some cases a low income person would loose his if they had RRSPs. Perhaps Tfsa for them? Many of them would own no real estate or much of anything and perhaps not be very gifted. A few more blogs please to help those folk. Merci

#116 yvr_lurker on 09.27.21 at 8:30 pm

#105 IHCTD9
———-
Well, you probably have more skills than I do with this. I can’t do a roof, but painted the outside of my house and the trim, put in a fence, rebuilt the back deck, and put in a little patio area (12 * 12) with drainage, and then repaired the rotted garage door. All this over 2 summers of CoVID. Have to be careful with the ladders, as one slip-up and with how hospitals are now who knows what complicating factors will emerge. Saved a ton, and probably would have outsourced some of these jobs a few years ago, paying through the nose. Better to try to take it on yourself if you can.

#117 millmech on 09.27.21 at 8:33 pm

A relative of mine who is 79 lives quite well on $1500/mth, $2000/mth is an expensive or extravagant month for her. CPP, OAS, two small pensions is more than enough for her.
Not everyone needs $4k-$10k to live every month.

#118 Habitt on 09.27.21 at 8:36 pm

41 Andy spot on. The feds have a blende pension for their employees that kicks in at 65. If you retire at 60 you can get cpp until 65 when it gets blended. The rich union folk do quite well. Bet none of em are the bottom 50% of income earners lol

#119 Ponzius Pilatus on 09.27.21 at 8:39 pm

As of tomorrow:
In BC
Don’t leave home without it.
Vaccine Passport, that is.

#120 Flop… on 09.27.21 at 8:59 pm

When I saw the new CIBC logo, all I saw was a Renault logo.

Who’s suing who…

M47BC

New CIBC logo

https://uspto.report/TM/88744633

Renault logo

https://commons.wikimedia.org/wiki/File:Renault_2009_logo.svg

#121 Dr V on 09.27.21 at 9:21 pm

109 Faron

“Aren’t incorporated business’ owners all taking divvies and a low income at that point? So why should they even care what the top marginal rate is?”

Not sure if I understand. The tax rates are designed so that the combination of corp tax paid and the personal tax on ineligible divvys are very close to the same as taking the wage, so still very much concerned with the
marginal rate.

My accountant may declare both a wage and divvies in
any given year, so there must be a reason (draw down the corp?) I’ve never T4’d much more than required for
max CPP except years when I make a decent RRSP contribution.

#122 Dr V on 09.27.21 at 9:38 pm

114 Soggy – yes with that creeping contribution rate I had those concerns, but I have several years of school that gobble up most of the low earning years.

If db pensions are based on best average 3 year wage X
(2 times years of service)% at a 15-18% total contribution rate the CPP begins to sound like a poor deal at the 10% contribution rate BUT with lower returns going forward who knows.

#123 Doug t on 09.27.21 at 9:41 pm

#119 ponzius

They have check points set up on Pandora and Blanchard in Victoria

#124 facts on 09.27.21 at 9:45 pm

In Austria’s second largest city the Communist party won the local election.

In the US Biden got the booster jab on television, and declared that 97-98% vaxx-rate is needed to return to normal.

#125 Trojan House on 09.27.21 at 10:06 pm

#93 Ponzius Pilatus on 09.27.21 at 6:23 pm

Some would consider your centre-left views extreme. In fact, so many far-left views are extreme. It goes both ways.

#126 Ponzius Pilatus on 09.27.21 at 10:25 pm

#27 Penny Henny on 09.27.21 at 2:23 pm
#14 Ponzius Pilatus on 09.27.21 at 1:35 pm
58 S.Bby on 09.27.21 at 12:14 pm
I’m liking this new self-cleaning comment section.
———————-
Looks like it missed a spot.

////////////

Ha, funny Ponzie. One witty comment of your last hundred or so. That’s about your average.
————
Don’t tempt me.
Or my average goes way up.
You’re an easy target.

#127 Shawn Allen on 09.27.21 at 10:28 pm

Alberta Vaccine Passport

In Banff and Canmore this weekend… very busy… restaurants opened and packed. Only the fully vaccinated may enter. I saw no complaints. Suited me and it seems like everyone there.

#128 Nonplused on 09.27.21 at 10:48 pm

#67 Sara on 09.27.21 at 4:40 pm
#43 Nonplused on 09.27.21 at 3:18 pm

Folks, taking the CCP early is the only way to potentially maximize the total dollars received.
++++++++++++++++++

For some perhaps. What if both your parents are in their 90’s and you have no known health issues?

Besides, not everyone’s goal with respect to CPP is or should be to “maximize the total dollars received”.

—————————————

CPP doesn’t end at any particular age just because you start at 60, only the rate is reduced.

Ya I suppose if you have a history of longevity in the family you might have to do a probability weighted NPV to arrive at the most likely maximum.

I’m not sure what the goal is if not to “maximize the total dollars received” (NPV) What other goals are there? If you don’t need the money you can always give it to charity.

#129 TurnerNation on 09.27.21 at 11:12 pm

Reset/Climate Reset is here. Global war.

https://www.tomshardware.com/news/power-outages-in-china-could-affect-apple-intel-nvidia
“Apple, Intel, and Nvidia Suppliers Halt Production in China Due to Mandated Power Shutdowns”

——
–Why are the CV rules destroying only the (Former) First World Countries?
Permanent Rolling Economic Lockdowns. Easily into 2022-23. Here comes the soft sell.
There will be NO new hospital capacity provided, don’t be silly.)

.Calls for lockdown in Alberta as hospitals pushed to brink – CBC News: The National
Alberta’s former chief medical officer is among those calling for a lockdown in Alberta as COVID-19 cases fill up ICU beds and delay surgeries.

……..
— Chart: Kanada population growth vs. hospital beds. Not pretty.

https://twitter.com/Milhouse_Van_Ho/status/1442504554642296835?s=19

#130 yvr_lurker on 09.27.21 at 11:17 pm

#121 Dr. V
Not sure if I understand. The tax rates are designed so that the combination of corp tax paid and the personal tax on ineligible divvys are very close to the same as taking the wage, so still very much concerned with the
marginal rate.

My accountant may declare both a wage and divvies in
any given year, so there must be a reason (draw down the corp?) I’ve never T4’d much more than required for
max CPP except years when I make a decent RRSP contribution.

———-
I respect Dr. V trying to optimize his portfolio after (presumably) years of admire of working as a doctor. However, the complexity of the optimization process with the Tax code as it stands is mind-boggling for the average Joe Blow, unless one spends months trying to understand the subtleties of all of the options or outsources the effort to those 1% finance guys. Garth is trying to teach people to become literate with finances, but if one needs an advanced degree to optimize their portfolio with respect to the tax code and spend years doing it (like Dr. V), then the system in my view is rather broken and needs some overhaul and, especially, simplification. I am a STEM guy, and don’t really have the time or great interest to read for hours optimizing out every last dollar.

#131 Armpit on 09.27.21 at 11:39 pm

Ahhhh….. The Same old, same old CPP debate. Folks, Just make a decision and live with it!!! (pardon the pun).

When you die, let the others decide if you were ahead or not. What do you care??

My two cents.

#132 Dr V on 09.28.21 at 12:26 am

109 Faron

“My proposed sliding cap gains inclusion for equities would tie the inclusion rate to central bank set interest rates.”

I read this as an inverse relationship at the time of sale?

I see this as a direct link between the BOC and a government revenue stream – too strong a tie for BOC political independence.

Secondly, interest rates can be causes or effects. In a scenario where the BOC has lowered rates due to an economic slowdown, but the market has failed to react or not yet reacted, those who needed cash may be
doubly penalized by low gains and a high inclusion rate.

#133 Wrk.dover on 09.28.21 at 7:11 am

Bottom line; one takes it at 60, the equal other takes it at 65, then at 72ish, they have both collected the exact same sum but the second person now gets more every month.

Hmmm.

#134 millmech on 09.28.21 at 8:30 am

I wonder how many solar panels and wind farms China is going to build to get them through the energy crunch this winter. This is why they most likely banned crypto currencies.
https://www.msn.com/en-ca/money/topstories/china-energy-crunch-triggers-shutdowns-pleas-for-more-coal/ar-AAOTy9K?ocid=msedgntp

#135 Colin on 09.28.21 at 8:32 am

Omg. Been watching morning television for an hour and a
half today. Flipping channels around the GTA.

I’ll bet I’ve seen the same ad for CHIP reverse mortgages at least fifteen times – what is going on?

#136 Colin on 09.28.21 at 8:43 am

Re: morning tv ads

And just now there’s been several of those cash loan ads against home equity, just the last few minutes. Same thing on the radio too.

#137 crowdedelevatorfartz on 09.28.21 at 8:45 am

@#120 Floppie

“When I saw the new CIBC logo, all I saw was a Renault logo.

Who’s suing who…”

+++++

Ahahahaha.
Classic.
I wonder how many suits…. in how many meetings….reading endless emails…. after determining it wouldnt offend any races, creeds, colors, sexual orientations……..came up with THAT boring logo?

#138 Mr Canada on 09.28.21 at 8:46 am

Garth, in my case, both me and my spouse are self employed and pay both premiums, maybe it makes sense to collect early and not have to pay in 2X

#139 crowdedelevatorfartz on 09.28.21 at 8:47 am

@#129 Turner nation

“— Chart: Kanada population growth vs. hospital beds. Not pretty.

https://twitter.com/Milhouse_Van_Ho/status/1442504554642296835?s=19

+++++

But, but, but they told us over and over Kanada has the bestest medical system in the world!

This chart cant be true….unless the politicians and bureaucrats were lying to us……

#140 IHCTD9 on 09.28.21 at 8:55 am

#116 yvr_lurker on 09.27.21 at 8:30 pm
#105 IHCTD9
———-
Well, you probably have more skills than I do with this. I can’t do a roof, but painted the outside of my house and the trim, put in a fence, rebuilt the back deck, and put in a little patio area (12 * 12) with drainage, and then repaired the rotted garage door. All this over 2 summers of CoVID. Have to be careful with the ladders, as one slip-up and with how hospitals are now who knows what complicating factors will emerge. Saved a ton, and probably would have outsourced some of these jobs a few years ago, paying through the nose. Better to try to take it on yourself if you can.
__

Sounds like you got plenty of skills, and you get more every time you take on something new too.

I pick my battles a little more these days too – not so much for safety, but the stuff I hate (exhaust work, brake lines, etc..) gets subbed out a lot more.

#141 TurnerNation on 09.28.21 at 8:59 am

— Natural Gas Prices – yikes. It will be a cold winter Comrades.

https://finviz.com/futures_charts.ashx?t=NG&p=w1


— Gee this is sound a bit like a War isn’t it ?
(This smacks of an engineered crisis, another attack on the Former First World Countries.

.Breaking911 @Breaking911
New York Governor Kathy Hochul says she will deploy medically trained National Guard troops to replace unvaccinated healthcare workers in hospitals, who will be fired tonight.


— Prediction: Christmas – will again this year be cancelled by our rulers. They must be roaring with laughter. GEE why’d they tear down the field hospitals in Toronto, Hamilton after less than one year??

.COVID-19 vaccination rate must rise above 85% to avoid fall lockdown, Ontario modelling show (cbc.ca)


— Ahh the New System. Destroy the middle class. “They’ll stone you just like they said they would’ everybody must get stoned”. T2 more SOMA for you.

.Toronto seeks federal exemption to decriminalize drug use as opioid overdoses rise (cbc.ca)

#142 Woke up this morning... on 09.28.21 at 9:01 am

WHAT IN THE ACTUAL….

“In a last-ditch effort to convince unvaccinated health care workers to get the shot before the Monday deadline, NY Gov. Kathy Hochul also said the state has issued guidance that would prevent unvaccinated health care workers who are fired to collect unemployment.”

https://wskg.org/news/facing-health-care-workforce-shortage-new-york-governor-preps-emergency-plan/

YO, front line heroes! YOU ARE HEROES!
You braved the worst, and we paid you lip service.
Now…you’re fired. And no unemployment FOR YOU!

Surely EVERYONE can see the clear problem here, can you not?

My only explanations is that politicians have lost all trust and credibility of the public through this pandemic, and their strategy is to take it back by force, the megalomaniacs that they are.

#143 Pandemic FYI on 09.28.21 at 9:16 am

American Psychological Association

61% of adults experienced undesired weight changes since pandemic started

41% report they gained more weight than they intended.

Average gain was 29 lbs

These changes comes with significant health risks, including increased vulnerability to serious illness from coronavirus.

23% of adults reported increase in a alcohol consumption to cope with stress

CDC notes obesity may triple the risk of severe covid.

Most co-morbidities are related to excess weight.

In UK…

650,000 people aged 18-34 started smoking during the pandemic – increase of 25%

32% of 50-70 aged people started drinking more.

UK government is teaming up with fast food delivery companies to get young people to vaccinate. Little like Krispy Kreme donut free with vaccine.

#144 facts on 09.28.21 at 9:26 am

#127 Shawn Allen
In Banff and Canmore this weekend… very busy… restaurants opened and packed. Only the fully vaccinated may enter. I saw no complaints. Suited me and it seems like everyone there.

Your strong stomach will suit you well for the boosters to stay in your class.
Bon appetit.

#145 Dharma Bum on 09.28.21 at 9:37 am

#133 Wrk.dover

…then at 72ish, they have both collected the exact same sum…
——————————————————————————–

But they’re now 72. Hmmm.

The 60 year old had a 5 years head start to either spend the cash, or invest it. So there’s that.

I’d rather get out of jail 5 years earlier. There’s no time like the present.

Not that relevant to compare yourself to someone 12 years down the line and then have the other guy say, as he creeps into old age decrepitude, “Aha! NOW we’re even!”

So what?

It’s all downhill at that point anyway.

I don’t know anyone who is better off (physically and mentally) at 72 than they were at 60.

It’s one thing to “plan for the future” at 30 for when you’re 60 than to worry about your future when you’re 60.

At some pint, there’s way more past than there is future.

The time is NOW.

#146 DoN on 09.28.21 at 9:37 am

The secret to life is to enjoy your 20’s & 30’s then work until you can no longer physically. Retirement begins the death process for too many people.

#147 Dharma Bum on 09.28.21 at 9:44 am

#128 Nonplused

What if both your parents are in their 90’s and you have no known health issues?
————————————————————————————

Well, there’s always the bus that you didn’t see as you stepped into the road.

Or the guy that flies right through the stop sign.

Or the lunatic at the mall with an AK-47.

It’s not all about genes.

Unless you’re Levis.

(Did I really just write that?)

#148 the Jaguar on 09.28.21 at 9:59 am

Meanwhile, back at the Ranch……. All this flotsam jetsam about CPP, stock indexes and whatnot aside, real life and issues unfold behind the scenes. Anybody paying attention? VladTor, this one is right up your alley.

Here is a link to an interesting read for those who like to keep an open mind:

https://cluborlov.wordpress.com/2021/09/28/global-gas-wars-the-fun-has-just-begun/

#149 Dr V on 09.28.21 at 10:16 am

130 lurker – Sorry not an MD. My moniker is a satirical one, based on a PhD in “Vampire studies” which is a course offered at UVic Gmst454.
I too am STEM. When I meet with my acct, I nod my head for the first two items he explains, then I’m lost on the third. He has trained me well though and I am never shocked by the amount of money I owe, and are sometimes pleasantly surprised. Thank you for your comment.

#150 DB on 09.28.21 at 10:35 am

I think the only argument for taking CPP late is if you recognize that you are eliminating some of the longevity risk and actually spend more of your other funds early in retirement when you can enjoy them. I took it when I retired at 63. With my wife we were going to wait but she still does a little work and pays into CPP past 65. If she doesn’t start taking CPP she gets nothing for the payments she makes because she is already making the max. If she starts CPP she can quit paying into CPP or actually get credit for the amount she pays in. It was a shock to me that the government would have her pay into the plan and get no benefit from it.

#151 Sara on 09.28.21 at 10:43 am

#128 Nonplussed
“I’m not sure what the goal is if not to “maximize the total dollars received” (NPV) What other goals are there? If you don’t need the money you can always give it to charity.”
================

For some the goal is a certain minimum amount of income in their older years to ensure financial security. This does not necessarily equate to drawing the most total $ over one’s lifetime from CPP as possible – different goal.

For example, giving up CPP from age 60 to 65 to ensure a higher monthly payment at age 65+ is more important to some people than extracting the most total $ over their lifetime. If they die before reaching age 65, then they collect nothing, but that’s fine because the goal was never to collect as much as possible to begin with – it was to ensure financial security age 65+.Think of it as longevity insurance.

#152 Damifino on 09.28.21 at 10:44 am

#124 facts

In the US Biden got the booster jab on television, and declared that 97-98% vaxx-rate is needed to return to normal.
———-‐—————-

If that is truly the case, it seems a new normal is on the way. Many states seem to be frozen in the 60% range. You might as well ask them all to turn in their muskets. Could get interesting. And not in a good way.

#153 Sara on 09.28.21 at 10:49 am

#82 Whinepegger on 09.27.21 at 5:39 pm
Garth, if one doesn’t need CPP/OAS would it make sense to delay taking them until 70 and withdrawing that amount from RRSPs and transferring it into TFSAs? Keeps one in a lower tax bracket. What say you?

==============
Not Garth, but will chime in. Presuming you are putting your RRSP withdrawals into your TFSA or other investment vehicle, then yes, imo, that can be a great idea for some. Take the tax hit on your RRSP, then take the tax hit on your CPP but not at the same time with the goal being to reduce overall taxes.

If you are spending your RRSP though, and you have a partner, she/he might suffer if you die first and have already spent your RRSP funds because your partner will not see your increased CPP payments after you die.

#154 yvr_lurker on 09.28.21 at 10:57 am

130 lurker – Sorry not an MD. My moniker is a satirical one, based on a PhD in “Vampire studies” which is a course offered at UVic Gmst454.
——–
Good one. Can’t say one would have to worry about what tax reduction scheme to optimize if one followed the PhD in Vampire Studies route. Perhaps more relevant in Romania, where you’d get a decent job, but here you’d be a super well-read grocery clerk pushing minimum wage.

#155 Don Guillermo on 09.28.21 at 11:33 am

#148 the Jaguar on 09.28.21 at 9:59 am
Meanwhile, back at the Ranch……. All this flotsam jetsam about CPP, stock indexes and whatnot aside, real life and issues unfold behind the scenes. Anybody paying attention? VladTor, this one is right up your alley.

Here is a link to an interesting read for those who like to keep an open mind:

https://cluborlov.wordpress.com/2021/09/28/global-gas-wars-the-fun-has-just-begun/
***********************************

Good read. We actually locked in our NG contract for 5 years last week. We’ll see if that was a good bet.

Fact – many more people die from cold than heat.

https://www.medicaldaily.com/cold-weather-kills-20-times-more-people-hot-weather-334566

https://www.msn.com/en-ca/weather/topstories/bjorn-lomborg-climate-change-and-deaths-from-extreme-heat-and-cold/ar-AAMlZPY

#156 Nonplused on 09.28.21 at 11:37 am

#151 Sara on 09.28.21 at 10:43 am
#128 Nonplussed
“I’m not sure what the goal is if not to “maximize the total dollars received” (NPV) What other goals are there? If you don’t need the money you can always give it to charity.”
================

For some the goal is a certain minimum amount of income in their older years to ensure financial security. This does not necessarily equate to drawing the most total $ over one’s lifetime from CPP as possible – different goal.

For example, giving up CPP from age 60 to 65 to ensure a higher monthly payment at age 65+ is more important to some people than extracting the most total $ over their lifetime. If they die before reaching age 65, then they collect nothing, but that’s fine because the goal was never to collect as much as possible to begin with – it was to ensure financial security age 65+.Think of it as longevity insurance.

————————————

OK, but why not take it and invest it in a Garth ™ portfolio? I think you need to NPV both options.

It could be that when taxes are included in the NPV (which, of course, they must be to get the correct number for your personal situation), that some people may find it better to wait rather than pay top brackets on the money. This would apply mostly to people who are still working and don’t have a golden pension.

So ya, I agree every case is different, but it is something than can be optimized using maths.

#157 Faron on 09.28.21 at 11:56 am

#132 Dr V on 09.28.21 at 12:26 am
109 Faron

Those are good points esp. given what has been bubbling out of the US fed of late.

#158 Faron on 09.28.21 at 12:02 pm

#139 crowdedelevatorfartz on 09.28.21 at 8:47 am
@#129 Turner nation

“— Chart: Kanada population growth vs. hospital beds. Not pretty.

https://twitter.com/Milhouse_Van_Ho/status/1442504554642296835?s=19

+++++

But, but, but they told us over and over Kanada has the bestest medical system in the world!

This chart cant be true….unless the politicians and bureaucrats were lying to us

That is NOT the issue in Alta right now. Or is way down the list. Disgusting deflection.

Furthermore:

Most of that under Harper.

You don’t get to grouse about reduction of services while also screaming you head off for lower taxes.

#159 Ponzius Pilatus on 09.28.21 at 12:12 pm

#123 Doug t on 09.27.21 at 9:41 pm
#119 ponzius

They have check points set up on Pandora and Blanchard in Victoria
————————-
They’ll call it checkpoint COVID, and it will become famous, like checkpoint ChARLIE.
Become a tourist attraction.
Smart move.

#160 WTF on 09.28.21 at 12:15 pm

Main reason I have waited till next year to start CPP is it is indexed whilst my DB plan is not.(we can argue about whether the CPI calculations reflect reality. or not, it doesn’t in my opinion)

It does help ensure, going forward, some of my monthly income will keep up with the cost of living. I can envision a time when my DB monthly stipend is worth less than the CPP/OAS payment due to inflation which seems to be rearing up everywhere. Transitory? perhaps not. Nobody Knows.

#161 Ponzius Pilatus on 09.28.21 at 12:21 pm

149 Dr V on 09.28.21 at 10:16 am
130 lurker – Sorry not an MD. My moniker is a satirical one, based on a PhD in “Vampire studies” which is a course offered at UVic Gmst454.
I too am STEM. When I meet with my acct, I nod my head for the first two items he explains, then I’m lost on the third. He has trained me well though and I am never shocked by the amount of money I owe, and are sometimes pleasantly surprised. Thank you for your comment.
————————-
Always wondered.
You’re too money smart to be a MD.
Keep up your good work.

#162 Ponzius Pilatus on 09.28.21 at 12:26 pm

158 Faron
You don’t get to grouse about reduction of services while also screaming your head off for lower taxes.
————————-
That goes for many posters here.
Can’t have it both ways

#163 James on 09.28.21 at 12:35 pm

#33 crowdedelevatorfartz on 09.27.21 at 2:43 pm

I max out on my TFSA and my RRSP’s annually and I also have a lot of money invested in non registered accounts.
I’m already in a high tax bracket and I dont need the CPP income to hand back to the govt in taxes..

Why not leave it until 65 or when ever I retire.

If I die early , no big deal.
I wasn’t suffering for lack of money and I have no dependents.

I’d rather wait for retirement in 5 years or less.
_________________________________________
Agreed I have a neighbor who took his CPP at 65 and his wife gets very little on hers as she was a SAHM most of her life. They are struggling now and he needed to return to the workforce. They were simply blue collar workers making a modest earning and invested what cash they could for a nest egg. The problem was their home which is worth probably around 1.5 M is having some issues and needs an infusion of cash. This is where they lived for the last 45 years. In addition their car is on its last legs and the wife has mobility issues. I told them to sell and invest the rest. But as always they said where do we go? This is our neighborhood our friends are here and we don’t want to go out of the city. He has now gone out and is working for a small hardware store part time to make ends meet. They both said this is the best they have felt in the last two years since he retired. He said about two more years of this and they are ready to downsize to a condo or go a little bit further out towards their children’s domiciles. They are working on the home repairs now and next spring he said we are going to get our last car for life. :)

#164 Planetgoofy on 09.28.21 at 12:39 pm

#152 Damifino on 09.28.21 at 10:44 am
#124 facts

In the US Biden got the booster jab on television, and declared that 97-98% vaxx-rate is needed to return to normal.
———-‐—————-
If that is truly the case, it seems a new normal is on the way. Many states seem to be frozen in the 60% range. You might as well ask them all to turn in their muskets. Could get interesting. And not in a good way.
————————————————————
People need to use some logic.
A massive power grab. Its a global assault on democracy and their all doing the same thing.

In all of recorded medical history there has never been a case where not taking treatment was blamed for the treatment failing. It’s very funny that the government and the mainstream media wants to blame the people who are unvaccinated. How could the people who are unvaccinated change the behavior of the vaccine, and the answer is they couldn’t possibly.
I bet if 100% get Vaccinated the VAX passports never go away.
Biden was in UK, India and like Socks avoids any real questions.

#165 ImGonnaBeSick on 09.28.21 at 12:40 pm

#158 Faron on 09.28.21 at 12:02 pm
#139 crowdedelevatorfartz on 09.28.21 at 8:47 am
@#129 Turner nation

You don’t get to grouse about reduction of services while also screaming you head off for lower taxes.

Of course you can. There are plenty of unnecessary programs and spending in the provinces and federally. Optimizing spending, increasing essential services, does not necessarily require higher taxes. It requires people that can prioritize, cut, and say “no”…

#166 Illiquidity Trap on 09.28.21 at 12:54 pm

Colin, alot of my friends in their sixties put all their money in their house, condo. They saved almost nothing. Now, they are learning that when you have no cash, liquid assets, investments to pay their bills, taxes, expenses that spells trouble. Reverse mortgages were just the extension trap to put all your money in your primary house, condo, property. Remember hearing over and over for many decades, your house is the biggest investment you will probably make.

Unlike myself and my wife, we have no more than 30% in physical, more illiquid real estate. Once you go over 50% in physical real estate, you are asking for an illiquidity trap waiting to happen. Cash pays low to squat but comes in hand when you are in a payments bind.

#167 SoggyShorts on 09.28.21 at 1:12 pm

#122 Dr V on 09.27.21 at 9:38 pm
114 Soggy –
Right, forgot about doc school…
CPP isn’t a terrible investment, but it does get significantly worse if you don’t stick to it– so if you’re into it for more than a decade it’s likely best to keep going until you have 34 “good” contribution years
(18+8+34=60)
Interesting point about lower return in the future, I’m always planning for terrible returns (these first 11 months of retirement have made all of my forecasts wrong in a very good way) at some point in the next few decades the 100% guaranteed positive return of CPP will beat the market.

Of concern is the indexation of CPP. The fact that it’s based on the CPI means that it’s unlikely to match anyone’s personal inflation/consumption which makes it much harder to judge.

#168 crowdedelevatorfartz on 09.28.21 at 1:34 pm

@#158 Faron finger counting

“That is NOT the issue in Alta right now. Or is way down the list. Disgusting deflection”

+++

The only thing digusting is your myopic view of the world.
Climb down off Woke Mountain and see the reality that is the worst kept joke in Kanada.
Nurse shortages, doctor shortages, Hospital bed shortages. on and on and on.

The population in 2000 was roughly 30 million.
The population in 2019 was 38 million.

Most of that increase due to Liberal immigration policies.
100,000 people one year, 250,000 people the next.

Hospital beds in the same time frame went from 380 beds per 100,000 pop
To 250 beds per 100,000 population.

As the average age went from the mid 30’s to the mid 40’s.
( news flash: Older people spend more time in hospital)

People have been bitching about the YEARS long waits for routine operations long BEFORE Covid.

Covid just blew the lid off the lie that is Canada’s “Universal Health Care”.

I cant wait to see the immigration numbers now that our fearless “Leader of all things He deems worthy” is back in power.
500,000 per year?
1,000,000 ?
What the hell……. all those new voters will probably vote Liberal for decades to come.

https://twitter.com/Milhouse_Van_Ho/status/1442504560698855424/photo/1

#169 IHCTD9 on 09.28.21 at 1:41 pm

If you’ve got a 7-fig B+DP, and a newly 7-fig’d PR, this changes all the rules. For someone who was planning on retiring on a 1Mil or so B+DP, 1 Mil isn’t really enough, you still need the CPP/OAS/DBP/etc on top. It matters how you handle it.

2 Mil however – is enough. It’s more than enough. In fact Ms. IH and I wouldn’t even be able to take all the proceeds without triggering claw-backs.

Liquidate, invest, max out the incomes, and the BDP would still increase! 140K between a couple still allows plenty of cashflow horsepower to buy another house in a cheaper area – or rent a nice place in the same area.

No need to sweat the CPP – you’d have way more than enough either way.