The burning question

Frank and Allan are buds. Both almost sixty. Both retired. Both like biking around Montreal and doing what old guys excel at – being oracles of wisdom.

Recently the topic du jour has been the pensions Canadian wrinklies get after working for a few decades and paying into the public plan, along with their employers. In Quebec it’s the QPP and in ROC it’s CPP – paying equivalent amounts.

“We are both approaching 60 in the next 12-18 months,” Frank tells me. “I have said based on your suggestions that I will be taking at 60.  Allan has rebuted that saying ‘why if you don’t need it to support your yearly cash flow take it at 65 or 70 as the government pretty much takes the risk out of investing it by guarantying a 6% return.’ But now Allan has changed his tune by doing a simulation comparing the scenarios 60, 65, 70. He now claims the 6% the government offers as a return if held within the QPP portfolio is really more like 1.5 % to 2.5%. Is this so? That would be more of an argument to take it early and manage it yourself, right?”

It’s an eternal debate, and worth visiting again even as Ukraine burns, inflation hots up, interest rates rise and Covid lurks. The reality is many Canadians are woefully unready for retirement and need government cheques to get by – as piteous as they may be.

First, understand this ‘pension’ amounts to grocery and gas money for most people. The average monthly benefit is just $702, or less than $8,500 a year. Not exactly princely. Some people receive the max ($1,253, or $15k/year) but a huge number receive less. The OAS pogey doesn’t kick in until age 65, and that’s $642 a month. So the average retiree at 65 can expect (today) a total govy income of $16,128. That’s below the so-called ‘poverty line’ in Canada, which is $18,000 for a single person. Sadly there are two million seniors in this category at the moment.

Okay, let’s assume Frank & Allan are middle-class dudes and don’t need the CPP to buy Pinot Noir or those godawful rubber bicycle pants. The question is whether to start collecting a reduced CPP at age 60, or wait five long years to get a bit more at 65, or 10 years to collect a larger monthly amount at 70.

This blog has long argued that sooner is better. Simple reasons – you can stuff CPP payments in your TFSA for five years, grow the money and do better than waiting until 65. After all, by delaying half a decade the average person is not collecting $42,120. Second, why not take the extra income (that you contributed to) when you’re sixty and still spry, healthy, vibrant and can enjoy it? The sooner the better, because we all know what’s coming. Third, delaying benefits until 65 or (shudder) 70 means you’re gambling with your death date. What’s the point of putting off this extra cash flow for up to a decade, when you might just not wake up one morning soon afterwards? How smart was that?

Well, Frank says his pal Allan is ‘kind of nerdy’ and decided to do a mathematical analysis to see if delaying the benefit makes financial sense (not factoring in the comments above). His conclusion: it does not. Here is the logic:

I was thinking about why so many people (the majority?) take QPP and CPP early, when the payout is higher if you delay. It seems like people are not being rational. If you start taking it at 60, the payment is reduced by 36% compared to if you start at 65 (0.6% reduction per month). If you start taking it at 70, the payment is increased by 42% compared to if you start at 65 (0.7% increase per month).

So the online literature and some financial advisers say your payment increases by 6% per year if you wait until 65. That is a fantastic no-risk return. So if the return was really 6% compounded, then a majority would wait until 65, I believe.

I created a table that shows that the true compounded return is more like 1.5% to 2.5%, which is a lot less, and which I think explains why most people take CPP as soon as they can. In the table, there are 3 columns of payouts: $1000 per month starting at age 65, $640 per month starting at age 60 (36% less), and $1420 per month starting at age 70 (42% more).

The percentages are the compounded returns. For example, at age 77, you would have received a total of $138,240 if payments started at 60, but $156,000 if payments started at 65, and only $136,320 if payments started at 70. If the early payments were invested, what compound return would make the total early payments equal to the total normal and total late payments?

It takes only a 1.4% compound return for the early payments to achieve a total of $156,000 at age 77 (the total normal payments). It takes a compound loss of -0.16% to achieve a total of $136,320 at age 77 (the total late payments). Even if you live to 100, the compound returns are only 1.5% and 2.4%. The returns even seem to max out in the 90s and then decrease.

Believe it or not, if the early payments were invested at 6% compounded per year, at age 77, you’d have $237,355 (as opposed to the $156,000 that CPP will actually give you). At age 100, you’d have over $1.2 million. Instead of $1000 per month, the payout starting at age 65 would need to be $237,355/(13*12) = $1,522. Instead of $1,420 per month, the payout starting at age 70 would need to be $237,355/(8*12) = $2,472

This demonstrates the time value of money, and explains exactly why investing a small amount over a longer time is better than investing a larger amount over a shorter time. Given such low returns, it seems that people are doing the rational thing and taking QPP early.

And there you have it. Not only are CPP benefits not keeping up with inflation and are likely to erode seriously over time, but a global pandemic has started to shorten life expectancies. Delaying this income is a gamble not worth taking. It never made practical sense. Allan’s number show it makes no financial sense.

Finally, ask yourself why the government bribes you into delaying the pension? Do you think it’s out of charity? Huh? Me neither.

About the picture: “After running a picture of a penguin, you said you might publish a photo of a bug – if it was trained!” writes Juve, who says he lives in ‘the 905 wilderness’.  “I’m up for the challenge, here’s a photo I took in Vietnam of a local kid and his pet. MSU – you’ve been a daily must read for years, and are mostly to thank for (or to blame if you ask my wife) that we own a nice B&D instead of a condo. I’ll be excited to see my photo on your site!”

167 comments ↓

#1 dave on 03.17.22 at 1:54 pm

Interest rate will rise this year because of Inflation.
It will take a few increases before housing prices actually reduce.

We are headed for a recession with Oil prices at crazy levels. Once in a recession the Interest rate will decrease.

Once interest rate drop….Real Estate will be back on fire.

#2 bob on 03.17.22 at 2:08 pm

Curious,
Does the math still make sense if you factor in taxes?

i.e. assume we have max RRSP, max TFSA, and good amount of savings, no debt…

At age 60, I hope to be still very healthy and active and I love my job, so will likely continue earning at top marginal tax bracket.

If I take at age 60, my CPP will be taxed near 50%
but perhaps if I delay taking CPP, and actually you know, retire at 65 or 70, I may not be at top marginal bracket anymore?

Thoughts on that?

Care to update the spreadsheet considering:
60 – top marginal bracket, ON, ~48%
65 – marginal bracket ~33%
70 – marginal bracket ~31%

#3 Bill on 03.17.22 at 2:09 pm

This doesn’t take into account taxes. They might be retired but if they are withdrawing from RRSPs (which is obvious given we are investing the CPP) CPP is still considered income tax and depending on the Province will be taxed around 20% before it can find its way into your TFSA.

#4 Chimingin on 03.17.22 at 2:09 pm

Cool praying mantis! I love the idea of the two being best buds.

#5 Richard L on 03.17.22 at 2:17 pm

I have taken CPP at age 60. The main reason for this (as Garth alludes to) is that one never knows when the Grim Reaper will come. However, be assured that he will.

#6 Alberta Ed on 03.17.22 at 2:21 pm

Take the money and run. Spend it on something useful, such as Scotch or golf clubs; Chrystia will just waste it.

#7 medavidj on 03.17.22 at 2:22 pm

The question is why are two million seniors below the poverty line. If we can educate people not to drink an drive, how about some quality time in school teaching financial independence.

#8 Philco on 03.17.22 at 2:29 pm

Watch out you’ll end up eating the seed corn and its to late to roll back time and $s when your old and fluffy.

#9 Observer on 03.17.22 at 2:35 pm

Why would you wait until age 77(or100) to spend the CPP you’ve been investing since age 60?

#10 Mike on 03.17.22 at 2:38 pm

Love the blog
I see the rational for taking CPP early however if you are at 60 and still making good income much of the CPP will be taxed at your higher tax rate. Does this not reduce the benefit of taking CPP before you actually retire?

#11 TurnerNation on 03.17.22 at 2:41 pm

Re. Ukraine? Why now?

“Ukraine just silently announced it’s the first country to implement the WEF’s ‘Great Reset’ by setting up a Social Credit Application combining Universal Basic Income (UBI), a Digital Identity & a Vaccine Passport all within their Diia app.”
https://twitter.com/SikhForTruth/status/1504146438007230466
https://iphonesoft.fr/2022/03/16/ukraine-air-credit-social-application-diia


— Kanada — the Test Zone. Part 1

“Rupa Subramanya: Time to lift the federal government’s outdated and unnecessary vaccine mandates If it’s safe for civil servants in Ontario and Nova Scotia to return to work without proof of vaccination, what is so special about federal workplaces?”
https://nationalpost.com/opinion/rupa-subramanya-time-to-lift-the-federal-governments-outdated-and-unnecessary-vaccine-mandates

— Kanada — the Test Zone – Part II

But why? The QR code is being mandated by the Globalists.
Government, Air Canada, Pearson Airport are signed onto this trial as we see listed here:

“Known Traveller Digital Identity.”
https://ktdi.org/

— Kanada – the Test Zone – Part III.

Why is there record unrelenting new Kando development within every urban area?
Oddly the list of big global Corporations behind them appears to have been removed from the website?

“The Century Initiative is focused on responsibly and thoughtfully growing the population of Canada to 100 million by 2100.”
https://www.centuryinitiative.ca/about/our-team

#12 Big Bucks on 03.17.22 at 2:43 pm

“One in the hand is worth two in the bush.”Your entire article in 10 words.

#13 Observer on 03.17.22 at 2:44 pm

Beginning in January, educational letters were sent to approximately 1,700 taxpayers who claimed the PRE(principle residence exemption) in two specific scenarios. The first letter went to taxpayers who claimed the PRE for two consecutive years in a row, and the second letter was directed at taxpayers who claimed the PRE and had previously reported gross rental income on their return.

https://financialpost.com/personal-finance/taxes/what-you-need-to-know-as-the-cra-cracks-down-on-principal-residence-exemptions?fbclid=IwAR0kdzQSdmJcQGmIgffyzCnCfy0LXfcL1iAoi4ZVa0DSUPr29C1hynDvQ6E

#14 Karl Lang on 03.17.22 at 2:44 pm

I think the CPP example given above is only valid if you are retired at 60 as Frank and Allan are.
If a person would have taken CPP at 60 while s/he was still working their tax bracket would have gone up, thus having to pay more income tax.
Would be interesting to factor in various salary levels to see where the magic point is.

#15 Divorce Lawyer on 03.17.22 at 2:45 pm

Divorced men should take it at 60. Let those who divorced them live with the inflation in their later years. You only live once.

#16 morrey on 03.17.22 at 2:48 pm

#1 dave

if only it was that simple to predict the future!

#17 Ponzius Pilatus on 03.17.22 at 2:50 pm

129 Barb on 03.17.22 at 11:48 am
#101 DON
“All over BC…an interior regional district said a person couldn’t live full time in a travel trailer on her Dad’s private land in a rural setting.”

——————————————-
About 10 years ago, my North Okanagan community’s mayor was quoted in the newspaper as saying “You can still paint your house without a permit.”

Looking back over our 45 years here, Official Community Plans/Land Use/Zoning created brutal restrictions. Guessing that was a project for an anonymous sociology prof.

Insidious control.
Bureaucratic “creep” is a verb as well as a noun.
——————————-
Easy for someone who lives in the sticks to say.
Just wait until they subdivide the neighborhood, and your neighbour builds a 20,000 sq. Monster home, and paves his whole lot and parks his construction trucks there.
Zoning bylaws separates us from the apes.

#18 Søren Angst on 03.17.22 at 2:51 pm

All due respect to the Retiree number crunchers, start with:

http://deathclock.com/

and work from there.

Actually, start here then see above:

https://www.nhlbi.nih.gov/health/educational/lose_wt/BMI/bmicalc.htm

#19 Paul on 03.17.22 at 2:51 pm

#1 dave on 03.17.22 at 1:54 pm
Interest rate will rise this year because of Inflation.
It will take a few increases before housing prices actually reduce.

We are headed for a recession with Oil prices at crazy levels. Once in a recession the Interest rate will decrease.

Once interest rate drop….Real Estate will be back on fire.
—————————————————————–Follow me for more inciteful investment advice!!!

#20 Ponzius Pilatus on 03.17.22 at 2:59 pm

This accountant did the calculation, and took it at 60.
Never looked back.
And what if a Putin came to power and cancelled the CPP, and used all the money to buy a yacht.
Well, don’t laugh, it’s happening right now.

#21 Søren Angst on 03.17.22 at 3:00 pm

And more fun for the Retiree number crunchers.

If living in the Left Coast, take a drive to Burnaby Hospital.

3rd floor (if I recall correctly).

Geriatric wing.

Observe the “Golden Years” everyone is saving up for.

[Palliative’s on 2nd, Timmy’s also on 3rd]

#22 jimmy zhao on 03.17.22 at 3:00 pm

Maybe people should take the CPP/OAS and Spend it on groceries & gas rather than investing it.

Why wait till you’re 90 or 100 to start spending the money ?

#23 Left GTA on 03.17.22 at 3:01 pm

I don’t understand the numbers. If you took CPP at 65 @ $1000 a month for 12 yrs = $144,000 at age 77, at 60 @ $640 = $130,560 at 77, at 70 @ 1420 = $119,280 . Where have I gone wrong?

#24 Linda on 03.17.22 at 3:07 pm

That is one muscular praying mantis!

I also did a bit of calculating when looking at taking CPP. For my own situation, taking it at 60 was a no-brainer despite the 36% reduction for doing so. For some, it may make sense to wait to 65. First, CPP is a DB pension so if someone has no other pension plan that 36% hit might put a crimp in retirement income. Second, if said person is working to age 65 in any case may as well wait, avoid the 36% hit & additionally pay less tax, since CPP is taxable income. Taking it while still working could be enough to bump one upwards tax wise.

While there have been news articles urging Canadians to wait to 70 to take CPP my own review of the benefit was that it was a mugs game to wait that long. As for OAS, given that it is paid from general government revenues I’d say take it while you still can. The rules as to who would qualify to receive it & even whether it would still be paid in the first place can be changed at any time.

#25 IHCTD9 on 03.17.22 at 3:07 pm

When I was a kid, Dad would catch praying Mantises and put them in a window (Outside) that had a spider web (brick house), and feed ’em fat juicy spiders every day. Just so we could watch the PM in action. Sometimes they’d hang around for weeks.

I remember walking up to them as they sat about eye level, and seeing their little alien heads swivel to observe me as I approached. It was a little un-nerving seeing them do that.

They get pretty big, there are several vids on YouTube featuring Mantises catching, and eating Hummingbirds (better keep ’em off the heated feeder fartz!).

One of my favourite Insects.

#26 Mean Gene on 03.17.22 at 3:09 pm

Eternal debate is about it, instead of looking at the decision in black and white (can we say that anymore) just take it at 62 and 6 months, then call it a day.

#27 Ponzius Pilatus on 03.17.22 at 3:09 pm

#2 bob on 03.17.22 at 2:08 pm
Curious,
Does the math still make sense if you factor in taxes?

i.e. assume we have max RRSP, max TFSA, and good amount of savings, no debt…

At age 60, I hope to be still very healthy and active and I love my job, so will likely continue earning at top marginal tax bracket.
—————————-
Well, in your case, the CPP really won’t matter much.
You’re obviously not the average case.

#28 Donmac55 on 03.17.22 at 3:10 pm

Happy St. Paddy’s, Garth.

#29 Ponzius Pilatus on 03.17.22 at 3:22 pm

#11 TurnerNation on 03.17.22 at 2:41 pm
Re. Ukraine? Why now?

“Ukraine just silently announced it’s the first country to implement the WEF’s ‘Great Reset’ by setting up a Social Credit Application combining Universal Basic Income (UBI), a Digital Identity & a Vaccine Passport all within their Diia app.”
————————
I heard that Zelensky is trying to create a new Silicon Valley in Ukraine.
All your personal data on your phone, even passports.
There are some issues with these refugees who arrive at countries who are not equipped with that technology, with their passports and ID only on their phones.
Witness the arrival of the “Digital Refugee” who only exists in cyber space.

#30 DON on 03.17.22 at 3:23 pm

#1 dave on 03.17.22 at 1:54 pm
Interest rate will rise this year because of Inflation.
It will take a few increases before housing prices actually reduce.

We are headed for a recession with Oil prices at crazy levels. Once in a recession the Interest rate will decrease.

Once interest rate drop….Real Estate will be back on fire.

**********
Will everyone make it out of the recession intact?

Depends on how bad the recession is. Everyone’s miliage will vary, but it only takes a small percentage of the over leveraged to muck things up.

#31 vanreal on 03.17.22 at 3:25 pm

If you’re still working at 60 then don’t take CPP it will just be taxed away. Also you cares if you die before you make up the difference by taking CPP later, you are dead people!

#32 Ponzius Ponzius on 03.17.22 at 3:25 pm

#7 medavidj on 03.17.22 at 2:22 pm
The question is why are two million seniors below the poverty line. If we can educate people not to drink an drive, how about some quality time in school teaching financial independence.
————————
For drinking and driving, you confiscate their car.
That gets them in line pretty quick.

#33 Dave on 03.17.22 at 3:26 pm

First of all, as to “why not take the money when you are young and enjoy it” Its $700 a month. What are you going to do with that? Secondly, I’d rather die with money than live into my eighties or nineties and have to eat cat food. Ii think those that can afford to delay should.

#34 Reality Check on 03.17.22 at 3:27 pm

Antivax truckers descending on Victoria.

Already the Victoria neighbourhood of James Bay is experience the antivax trucker brand of “freedom”. Incredibly load music playing from Rolling Stone sized stadium speakers. Local store employees being harassed for no other reason than they are doing their minimum wage jobs.

There was never any doubt the “trucker fake-freedom” protest was about anything other than being required to get a vaccine to be a normal contributing member of Canadian society. The current antivax truckers protest say they will stay until every mandate is removed.

News Flash for the antivaxxers – Pretty much every mandate is removed for vaxxed people, or is scheduled to be removed. It’s only the unvaxxed cowards that continue to experience “mandates”, as they should – they have made a choice to believe in fake science and put their own interests ahead of others.

And It appears that our wacko lefty Victoria city council is going to let the antivax truckers get a foothold in Victoria. As of yet there has been no move to curtail the advanced force of antivaxxers.

OMG – Victoria is going to be the laughing stock of Canada, if we allow the antivaxxers to occupy Victoria. After all we only saw the recent experience of Ottawa and Windsor (and 2 border crossing) and had several weeks advance notice from the antivax truckers themselves of their intent to occupy Victoria for months.

Be awesome when the cruise ships start coming into Vitoria within 4 block of the planned occupation. Nothing like having a few American tourist spit on to raise the city’s profile.

And finally, how tone deaf are these antivax idiots. Protesting for their selfish “freedoms” and calling our society fascist, when thousands of innocent Ukrainians are being murdered by Russia.

#35 PeterfromCalgary on 03.17.22 at 3:27 pm

Thanks Garth for the money making advice.

#36 ogdoad on 03.17.22 at 3:28 pm

Hey, if waiting and waiting and waiting for the CPP and OAS is your thing then wait away!

When I turn sixty I’ll have enough to fund my edibles habit….

Lets see…probably about 13-14 years of full-time work. Whats that worth?

Oh well. May as well LIVE!

Og

#37 Gerry on 03.17.22 at 3:38 pm

Agree, 100%. Take the CPP at 60 unless you really really need to have the higher payouts later. I made the same argument to my mom for 5 years, unsuccessfully. She finally agreed to take CPP on her 65th birthday. Died 2 months after her birthday. C’est la vie.

#38 Brian on 03.17.22 at 3:39 pm

It’s utter madness that the western nations are sending in all these arms to Ukraine. When the war ends, there will be many arms going to the black markets. Just imagine all the Manpads flooding into Ukraine. These manpads are designed to bring down planes. I can imagine some commercial passenger plane being brought down in Europe in the future. We should be negotiating a peaceful means to end the bloodshed instead of fanning the flames.

#39 Leroy full on Indian food on 03.17.22 at 3:42 pm

#34 Reality Check

“OMG – Victoria is going to be the laughing stock of Canada”

OMG – Canada is already the laughing stock of the the World because of our mandates and bib baby Trudeau.

#40 Jeremy on 03.17.22 at 3:44 pm

Garth has been so helpful to so many when it comes to investment help here.

But things are shifting dramatically, and so are my investments.

We are entering a time of whopping gains ahead for the Critical Mineral sector, especially with regards to electric vehicles and mining.

I am dumping all real estate, all B&D portfolios, and creating my own index funds for Critical Minerals.

I expect to turn $500,000 into at least $10 million within the next seven years.

Including my CPP money, which I am also taking early as Garth suggests ;)

#41 Leroy full on Indian food on 03.17.22 at 4:01 pm

#40 Jeremy
I am dumping all real estate, all B&D portfolios, and creating my own index funds for Critical Minerals.

I expect to turn $500,000 into at least $10 million within the next seven years.

__________________________

I hope you are joking. The higher the demand for EV’s the higher the cost of the minerals you refer to. Do you really think the majority of people will be able to afford a car with a battery costing $100k?

EV’s have already started to shoot themselves in the foot. See the price increases in Tesla’s over the past 4 years. If it was not for our tax dollars subsidizing these cars the industry would not exist.

How much longer will the tax payer put up with subsidizing the folk who can already afford an EV when most single parents can barely afford a non EV?

I wish you luck though.

#42 DBG on 03.17.22 at 4:02 pm

Break even calculations:

https://www.tridelta.ca/resources/cpp-calculator/

https://www.tridelta.ca/resources/oas-deferral-calculator/

You entirely miss the point. – Garth

#43 Steven on 03.17.22 at 4:09 pm

Market is already pricing in rate cuts.

2 more max then ,QT.

Anything else is merely but a dream. Like life.

The Fed said six this week. They should know (maybe even more than you). – Garth

#44 Barb on 03.17.22 at 4:09 pm

A praying mantis…appropriate given the daily Ukraine news.

#45 PeterfromCalgary on 03.17.22 at 4:12 pm

Does taking CPP early impact survivor benefits?

#46 Sail Away on 03.17.22 at 4:14 pm

After a lifetime of work… ah, to enjoy green pastures! Or is it being put out to pasture?

Semantics.

At 65, we’re going to have so many income sources to tap, it’ll be a logistical exercise in itself to keep track of them all. In the words of The Notorious B.I.G., ‘Mo money, mo problems’. As follows:

US Social Security x 2
US University pension x 1
BC Govt DB pension x 1
CPP x 2
OAS x 2 but probably clawed back. Unfair!
US IRA x 2
US Roth IRA x 2
RRSP x 2
TFSA x 2

That plus non-reg investments should put us right in the range of most Globe and Mail financial spotlight couples. I’d expect something like this:

‘Upon review, G&M financial experts conclude that the Sail Away family net assets of $564.75M should allow them to live a fairly comfortable life while still enjoying a month of tropical vacation, if spending is carefully monitored. We suggest shifting some of the riskier equity investments into safer, fixed-income in order to avoid running out of money in later years due to unforeseen market volatility.’

#47 Felix on 03.17.22 at 4:35 pm

A praying mantis is a far superior choice of a pet than a dogawful canine, plus it comes with at least 5x the IQ level of a mutt and barely .001% of the environmental impact.

#48 Sail Away on 03.17.22 at 4:38 pm

#40 Jeremy on 03.17.22 at 3:44 pm

We are entering a time of whopping gains ahead for the Critical Mineral sector, especially with regards to electric vehicles and mining.

I am dumping all real estate, all B&D portfolios, and creating my own index funds for Critical Minerals.

I expect to turn $500,000 into at least $10 million within the next seven years.

——-

Haha, good idea.

We have a family member (father of the husband of a cousin’s half-sister sort of thing) who went all-in on a startup cannabis company when T2 legalized it, with plans for retail outlets across BC, Canada, North America… and eventually, the Universe!

As far as I know, he doesn’t even smoke weed anymore. Don’t think he can afford it.

#49 peteinto on 03.17.22 at 4:40 pm

Pogey??? Just where do you think that money came from in the first place? take care Garth.

#50 Observer on 03.17.22 at 4:47 pm

#31 vanreal on 03.17.22 at 3:25 pm
If you’re still working at 60 then don’t take CPP it will just be taxed away. Also you cares if you die before you make up the difference by taking CPP later, you are dead people!

^^^^^^^^^^
Agreed.

Another point some may want to consider if employed past age 60, EI benefits are reduced by CPP payments.

#51 Stoph on 03.17.22 at 4:47 pm

#3 Bill on 03.17.22 at 2:09 pm
This doesn’t take into account taxes. They might be retired but if they are withdrawing from RRSPs (which is obvious given we are investing the CPP) CPP is still considered income tax and depending on the Province will be taxed around 20% before it can find its way into your TFSA.

———————————————————

This doesn’t change the conclusion as it doesn’t matter when the 20% is taxed. It’ll only reduce your after-tax amounts by 20%. This assumes that you have room in your TFSA to shelter after tax money.

This also assumes that your tax rate stays the same, as you may end up in a higher tax bracket or perhaps lose out on OAS if you delay CPP and get a higher monthly payment. Either of these situations support taking CPP early.

#52 enthalpy on 03.17.22 at 4:51 pm

Last I checked the data…the average age of someone who kicked it due to the big C was actually OLDER than our avg life expectancy…..

Still better to take the payments as early as possible.

#53 Linda on 03.17.22 at 4:58 pm

#45 ‘Peter’ – depends on circumstances. If you are already collecting CPP yourself & are receiving ‘the maximum’ you will not receive any additional CPP $ should your partner die. The current rules say the government will only pay up to the maximum for each person. If you do not yet receive any CPP, what you get as a survivor is based on the pension amount your partner would have received. So if your partner took CPP at age 60 the amount you’d get as their survivor beneficiary would depend on your age at their time of death & would be based on the amount of pension they were receiving. Currently the rules say if you are age 65+ you are entitled to 60% of the benefit your partner was receiving. If under age 65 you get a flat rate plus 37.5% of the benefit your partner received. Again, the moment you start collecting your own CPP benefit the maximum you will get including any survivor benefits is the maximum paid to a single person. There is no collecting two ‘full’ CPP benefits should your partner die. The only way to do that is for both of you to qualify to receive full benefits in the first place & keep on breathing.

#54 Observer on 03.17.22 at 5:02 pm

A Russian journalist who interrupted a live TV news programme to protest against the war in Ukraine says Russians are “zombified” by propaganda.

The journalist said she was detained and questioned by police for 14 hours, and fined 30,000 roubles ($280; £210) for the video. The authorities had been convinced she had been acting on someone else’s behalf, she said.

“Nobody believed it was my personal decision. They suggested it could be conflict at work, relatives who were angry about Ukraine or that I was doing it for Western special services.”

“They couldn’t believe that I had so many objections to the government that I could not stay silent,” she said.

Russian state television news has long been controlled by the Kremlin and independent viewpoints are rare on all the major channels.

It is also unusual for employees of state-controlled news organisations to express an opinion that differs from the official Kremlin position.

But since the war in Ukraine began, a number of journalists have resigned from top Russian TV channels: Zhanna Agalakova from Channel 1, and Lilia Gildeyeva and Vadim Glusker from NTV.

State-controlled Russian media refer to the war as a “special military operation” and paint Ukraine as the aggressor, describing Ukraine’s elected government as neo-Nazis.

https://www.bbc.com/news/world-europe-60778554

#55 Shawn on 03.17.22 at 5:08 pm

Sail Away said:

OAS x 2 but probably clawed back. Unfair!

****************
“Probably” clawed back? Surely you jest as you will surely be well into the claw back range and hopefully out the other side where it has all been clawed back.

Not sure I will achieve getting to where OAS is 100% clawed back for me and the wife but I hope so starting around age 71 with RRSP income. And I won’t consider that to be particularly unfair.

If we made $256,298 evenly split between the two of us excluding OAS then OAS would be all clawed back. This is the 2022 figure. A very nice income to aspire to for us, but not likely to get that high. Well, we will see how the RRSP grows.

#56 Faron on 03.17.22 at 5:09 pm

@The West & Sail Away

Oh, thanks. I hope that snare is comfortable. To clarify, these yachts have been fully appropriated by the government entities who seized them? Never to be returned and with no due process? Please provide evidence.

If you were paying attention (rather than engaging in disrespectful insults) you may see that the comparison against the case of the airliners is not a whataboutism at all. In fact, you have absorbed the very false equivalency Putin had hoped you would. If your outcry is at al common, it has clearly indicated that the Tucker Carlson audience is fertile ground for the propaganda that will surround a false-flag chemical weapons attack should Putin become desperate.

I know that’s a lot, so start with the evidemce that the yachts are fully owned by the states they are seized in. I’ll wait.

#57 cuke and tomato picker on 03.17.22 at 5:22 pm

I like the quote old guys are “oracles of wisdom” yes grab the CPP at 60 I have been collecting it for 19 years and my perfect wife for 15 years. There was a time I thought I would never retire but my perfect wife of 50 years felt that after our third child had their degree we should retire and move from Penticton B.C. to south Vancouver Island. We left our workaholic life behind in 2006 traveled the world saw everything we wanted to see enjoyed our grandson took our family to Disneyland
five times downsized from a 5400 sq. ft. house to 1830 sq.ft. My advice is retire as soon as you can you will
never be bored enjoy the charmed life. GLORY TO THE
UKRAINE.

#58 Moonshine on 03.17.22 at 5:41 pm

#6 Alberta Ed

Scotch is not useful, it’s my daily vaccine against the madness of today’s world!

#59 willworkforpickles on 03.17.22 at 5:44 pm

You can’t grow investments in foreign denominations in a TFSA or RRSP. Its all done in CAD. In other words , dollars that will become greatly devalued against one of the current real safe haven currencies that won’t become devalued as the dollar implodes in value over the next 5 years. These exotic Canadian savings accounts are no longer sound long term investment strategies.
Hell… TFSA’s will be gone/wiped out in another 6 years.

#60 JOHN PICKETT on 03.17.22 at 5:45 pm

Another reason to take an early CPP is to facilitate an early retirement or in my case, semi-retirement. After 40 years in the labour force in a physical demanding job, I decided at 59 that the wear and tare on the body was no longer worth it. However seeing guys go at 55 and vegetating I wanted to work some more years. So, I applied for a part-time position with my employer and got it. I got the early CPP and it filled out my missing take home pay. And, I still had my employer’s benefits package. In the last 3 years of work I was guaranteed 20 hours a week plus any extra hours if I wanted them. If the fish were biting I declined the hours. It was a good time in my life: lots of money, good health, and lots of leisure time. Go for it if you can.

#61 Sail Away on 03.17.22 at 5:52 pm

#56 Faron on 03.17.22 at 5:09 pm
@The West & Sail Away

…so start with the evidemce that the yachts are fully owned by the states they are seized in. I’ll wait.

——–

That’s good, because it could take some time to gather the requested evidemce. Proper evidemce gathering requires serious attention to detail.

Hang fire. Don’t post anything until I get back to you.

#62 kommykim on 03.17.22 at 5:53 pm

The problem with Allan’s calculations is that he isn’t taking into account that CPP is indexed to CPI.
ie: The compounded return would need to be 1.5% to 2.5% MORE than inflation.

#63 Ustabe on 03.17.22 at 5:53 pm

While your go-go years last a good long time, they start to become your go-slo years at a point.

For a while they intermingle but soon enough you are faced with no-go years overwhelming everything.

At 74 I’m sort of half and half go-go/go-slo but an old auto accident injury sustained when I was 16 is transforming from a bit of occasional pain to constant, requiring drugs, serious pain.

I’m now on prescription Naproxen as needed and its needed more and more often these days.

So enter that into your formulae.

#64 George S on 03.17.22 at 5:58 pm

At our pre-retirement course at work the instructor told us that the benefit of taking CPP at age 60 breaks even at age 78. They said that means that if you take your CPP at age 60 and live to age 79 you will end up with more money from CPP if you wait until 65. (there was no age 70 option at that time) Even though the average age of death once you make it to age 60 is 84 in Canada it was felt that it was better to take your CPP at age 60 because it can contribute to more fun in the first years of your retirement.
It is a gamble where you bet on how long you are going to live and in what state of health. And you never know what will happen.

#65 Sail Away on 03.17.22 at 6:00 pm

#55 Shawn on 03.17.22 at 5:08 pm
Sail Away said:

OAS x 2 but probably clawed back. Unfair!

——–

“Probably” clawed back? Surely you jest as you will surely be well into the claw back range and hopefully out the other side where it has all been clawed back.

——–

Au contraire, mon frere. It depends on tax and physical residence at the time:

“…if OAS payments are made to a physical resident of the U.S. – and not a Canadian physical or tax resident – the clawback provisions are eliminated, and the entire benefit is paid to the recipient. No OAS clawback would apply.”

https://cardinalpointwealth.com/2019/03/21/cross-border-retirement

#66 Dr V on 03.17.22 at 6:01 pm

While everyone’s personal circumstances are different, the biggest reason I took CPP early was to be able to preserve as much of my savings and investments as possible. Did not want to have a market crash AND have to start drawing the money down.

For a couple that will both receive CPP, please read Lindas’s comment 53. you do not want to draw down your investments in the early years in anticipation of higher CPP as upon a spouses death at least a portion of your spouses CPP will be lost and all of their OAS.

Thirdly, if you are self employed, and incorporated, you
have to pay both ends of the CPP on declared wages to income level of approx $64k . At over 11% it is not a good deal. If you have had strong contributions through the years, check with your accountant about taking a “CPP holiday” by still working but drawing dividends from your corp. Any savings remain in the corp for the time being.

Keep in mind that you cannot deduct any RRSP contribution from those dividends.

This would give the incorporated business person 5 income sources – public pension, RRSP, TFSA, non-reg and corp.

#67 Michael in-north-york on 03.17.22 at 6:04 pm

” #38 Brian on 03.17.22 at 3:39 pm

It’s utter madness that the western nations are sending in all these arms to Ukraine. When the war ends, there will be many arms going to the black markets. Just imagine all the Manpads flooding into Ukraine. These manpads are designed to bring down planes. I can imagine some commercial passenger plane being brought down in Europe in the future.”

Don’t worry about that. The Russian army has lost tons of its own weapons in Ukraine, that will saturate the illicit market for the years to come.

“We should be negotiating a peaceful means to end the bloodshed instead of fanning the flames.”

Negotiations with a confirmed psychopath can only succeed if accompanied by the show of force.

#68 wallflower on 03.17.22 at 6:24 pm

I know of a gaggle of folks and know a few personally who retired around 65 then died shortly thereafter. For the most part, they paid max payroll premiums… for basically zero CPP retirement benefit.*
Then TaxMan took a pile of their RRSP money!

My breakeven age was 76 so I took CPP at 60. I figure likelihood of getting past 76 ain’t brilliant and if I do get there, I can start mining a lot more of that RRSP money.

*I have often wondered but never inquired about those that basically retire but hold off on their CPP application but die beforehand. I guess they and spouse get nothing?!

#69 Scottie on 03.17.22 at 6:33 pm

DR V, precisely, my wife and I took our CPP early both at 60 and now at 66.5 have $90,000 after taxes, we are in a pretty low tax bracket. This $90,000 is in our TFSAs and earning us compound interest of $24,000 in 7 years with simple GICs with our credit union. Our RRSPs will be turned into a RRIF for each of us which will bring in $1,200 a month and our dividends from our equities is another $2,800 every quarter. We have some other bonds that bring in another $10,000 every six months interest so we are adding at least $35,000 a year to our investments, savings every year.

#70 Yukon Elvis on 03.17.22 at 6:50 pm

#38 Brian on 03.17.22 at 3:39 pm
It’s utter madness that the western nations are sending in all these arms to Ukraine. When the war ends, there will be many arms going to the black markets. Just imagine all the Manpads flooding into Ukraine. These manpads are designed to bring down planes. I can imagine some commercial passenger plane being brought down in Europe in the future. We should be negotiating a peaceful means to end the bloodshed instead of fanning the flames.
++++++++++++++
The US had those same concerns when they supplied the Muj with stingers during the Soviet occupation of Afghanistan in the 80’s . Those stingers were programmed to go dark after a certain period of time. No commercial or other planes were “stung” after the war as far as I heard.

#71 fishman on 03.17.22 at 7:00 pm

We’re in the Middle game now. Those Lenin weeks that come with the Openings are hard on the head. By their nature & classical training, Russians are taught to play the Middle game to a draw. Playing position & waiting for the enemy to make a tactical sacrifice & potential fatal mistake. The westerner is led to believe there are only good endings & is often disappointed. The Russian thinks the opposite & seldom disappointed.
Nato’s warriors are happy. Lots of action on the kinetic side now. Big budget increases. Transfers up close to the front line. While their proxy army learns all about the enemies dangerous tactics. Maybe after the Germans rearm we can all march through the Russian Steppes. What a novel idea. Nobody’s thought of that one I’ll bet. A sailor has to go to sea, A soldier has to go to war.

#72 willworkforpickles on 03.17.22 at 7:04 pm

Inflation is here to stay , I’m sure many are starting to see.
When they start telling you recession is here to stay in about a years time, that will be no joke either.
US interest rate increases at qtr point increments will reach the breaking point some time around the 7th instalment .
Having done nothing to quell inflation , those rate hikes will cease heading into recession. Monetary easing on a large scale will be restarted and inflation will soar ever higher.
Higher that is, into and within an inflationary recession combining inflation with recession in here to stay terms.

Congress and the Fed got us here with the monkey see monkey doer’s in Canada following in lock step and in no way shape or form can they fix any of it now and get us back out.
They have recklessly and irresponsibly driven us to the brink.
After the next couple years , economic crises followed by a collapse a couple years later still is inevitable and unavoidable.

The masses don’t see just how destructive government and Fed policies are … have been and continue on being to the detriment of us all.
Many will wake up and realize it in a few short years when deferring and piling on ever more debt is no longer possible.

Within 6 years or less, even the end of national sovereignty is foreseeable.

#73 ElGatoNeroYVR on 03.17.22 at 7:10 pm

#59 willworkforpickles on 03.17.22 at 5:44 pm
You can’t grow investments in foreign denominations in a TFSA or RRSP.
==============
Simply not true. You may want to shop around. RBC and TD definitely offer US denominated registered investment accounts through their direct investing divisions.They are separate accounts than the CAD denominated and you can transfer funds between them at current exchange rates.

#74 WTF on 03.17.22 at 7:10 pm

#34 “Already the Victoria neighbourhood of James Bay is experience the antivax trucker brand of “freedom”. Incredibly load music playing from Rolling Stone sized stadium speakers. Local store employees being harassed for no other reason than they are doing their minimum wage jobs.”
—————————————————————-
Yep, The Timbit Taliban stikes again

#75 ElGatoNeroYVR on 03.17.22 at 7:17 pm

#59 willworkforpickles on 03.17.22 at 5:44 pm
==========
As a follow-up for example in IA even though they show your totals in CAD you can most defintely purchase US denominated funds and hold them in USD. This is for RRSP and TFSA.
Ask your brokerage or financial adviser.

#76 Chaddywack on 03.17.22 at 7:18 pm

What about people like me who have a DB benefit pension that starts at 60? It gets reduced at 65 to take into account the CPP starting. Wouldn’t it make more sense to take it at 65 considering the pension reduction and much higher income before 65? I don’t see any point in taking it early, taking a hit to the CPP and then taking a second hit from my work pension at age 65.

Further my pension income plus the CPP at 65 would likely claw back my OAS completely, so in that case isn’t it worth delaying the OAS until 70 if it’s all going to be clawed back anyway?

What are us DB people to do?

#77 Nonplused on 03.17.22 at 7:23 pm

Maths are hard, but for once a calculation I can agree with. You have to compare total payouts. Comparing just the monthly or annual payouts means that you don’t account for the fact that with later payouts CCP is just returning your own money to you faster, but later. You can think of it as a “return of capital”. It’s not really a profit or a gain. It’s your own money coming at you over a shorter period. Better to get that money back earlier while you are still alive, and invested it yourself if you don’t need smokes & beer money.

#78 conan on 03.17.22 at 7:51 pm

Putin replaced his 1000 strong retinue of personal servants and has fired/imprisoned key people in the FSB and military. He is getting super paranoid about his personal safety.

Can’t get that Door’s song out of my head.

Apocalypse now (for Putin.)

The End.

https://youtu.be/ZeMlQEWEg2Q

#79 Professor Peter Griffin on 03.17.22 at 7:56 pm

DELETED

#80 Slim on 03.17.22 at 7:59 pm

#34 Reality Check

Yes, this sort of thing seems to be another sign of the kookiness which is somewhat fashionable again in these times.

#81 crowdedelevatorfartz on 03.17.22 at 8:13 pm

@#38 Brian.
“We should be negotiating a peaceful means to end the bloodshed instead of fanning the flames.”

+++

Unfortunately Putin has been know to use “peace negotiations” as a ruse or delay tactic while his forces regroup.

The Afghanistan War ( before Putins time) eventually ended when the mothers of dead or drug addicted Russian soldiers grew tired of attending funerals.

As for the 2 Chechen wars… The Russian army fought to a stalemate in the first conflict ( Boris Yeltsin’ s rule)and then pulverized Chechnya in the second war ( Putin in charge).

Expect Putin to follow the same tactic in Ukraine.
He will pulverize the cities and infrastructure and eventually….. leave.
It may take years to rebuild.

Unfortunately that’s what happens when the West ignores ruthless dictators ( with nukes) and the Russian people stumble along, accepting their corrupt leaders and their crappy lives.

#82 willworkforpickles on 03.17.22 at 8:22 pm

Some here with reading comprehension disorders don’t comprehend the demise of the US dollars world reserve currency status is future tense.
The mess the world is in requires the major economies of the world to restructure as is each their objective before this can and will happen.
The unanimous intent of world leaders to upend the dollar is already a hard wired decision among them.
The US economy will be declining steadily, not restructuring along with major economies over the next few years.
When these global up and comers restructure, a replacement reserve currency will emerge. It will be reality. The forces with this eventually becoming a reality are already too great to stop it.

Not a chance in this lifetime. – Garth

#83 Nonplused on 03.17.22 at 8:39 pm

Time to rebalance those portfolios again:

https://thepoliticalinsider.com/over-a-third-of-americans-are-willing-to-risk-nuclear-war-with-russia-poll/

The “net present value discount rate” for calculating the money value of time just moved to something like 20%.

I’m thinking go ahead and buy that new boat. Maybe a Harley. Those new Pan Americas look nice, even high tech. As long as the hysteria continues, 20% per year of capital could be diverted to making sure this year was your best year ever, fun wise. Make it a Keg night.

I wonder if the covid pandemonium was just a test to see how hysterical the crowd could be made over clearly false propaganda? Nuclear war? Over what? If they can get the masses to buy into that, literally anything is possible, including waking up dead one day. I mean everybody, the same day.

Buy all the things.

#84 Little Red Riding Hood on 03.17.22 at 8:44 pm

The Ant and the Grasshopper, how subliminal.

Genius

#85 mike from mtl on 03.17.22 at 8:49 pm

#73 ElGatoNeroYVR on 03.17.22 at 7:10 pm
#59 willworkforpickles on 03.17.22 at 5:44 pm
You can’t grow investments in foreign denominations in a TFSA or RRSP.
==============
Simply not true. You may want to shop around. RBC and TD definitely offer US denominated registered investment accounts through their direct investing divisions.

Exactly. Most decent Canadian domiciled brokers offer accounts in CAD and USD no problem. Sure you can’t open a $JPY or $GBP TFSA who cares, by proxy we are blessed access to US market which has nearly all the best cross listed corps you’d want to own ETF or not.

Yeah RBC and TD are not going anywhere. The feds could perhaps change the contribution/extraction laws at some point in the future granted, but I’d really doubt they’d ever stoop as low as confiscating our meagre savings. Even broke Russia has not gone down that path.

#86 Observer on 03.17.22 at 8:54 pm

#62 kommykim on 03.17.22 at 5:53 pm
The problem with Allan’s calculations is that he isn’t taking into account that CPP is indexed to CPI.
ie: The compounded return would need to be 1.5% to 2.5% MORE than inflation.

^^^^^^^^^
Yes, was also going to say that Allan neglected to consider CPI.

#87 KADAM on 03.17.22 at 8:59 pm

Desperation in housing continues even in Prince George, BC.

From a Reddit post:

“Opinions on what the real estate market is gonna look like in the next few months

I’m trying to buy a house in PG right now and I have offered $10,000-$15,000 over asking on a few houses but not had any accepted offers yet. There’s nothing on the market I really like but i am really feeling the pressure to buy before my interest rate is unfrozen and rises. Im wondering if anyone has any projections of what they think the market is going to look like over the next few months? I don’t know if I should just put a big offer on an ok house that I’m not in love with or if I should risk it and wait for something better to come up.”

#88 willworkforpickles on 03.17.22 at 9:03 pm

#73 & 75 ElGatoNeroYVR

“#59 willworkforpickles on 03.17.22 at 5:44 pm
You can’t grow investments in foreign denominations in a TFSA or RRSP.
==============
Simply not true. You may want to shop around. RBC and TD definitely offer US denominated registered investment accounts through their direct investing divisions.They are separate accounts than the CAD denominated and you can transfer funds between them at current exchange rates.

#59 willworkforpickles on 03.17.22 at 5:44 pm
==========
As a follow-up for example in IA even though they show your totals in CAD you can most defintely purchase US denominated funds and hold them in USD. This is for RRSP and TFSA.
Ask your brokerage or financial adviser.”
…………………………………………………………………………………………………

True enough no argument…but you missed my point entirely. Both the US and CAD dollar will come under attack . They will become much devalued in the next few years , and as i said , safe haven (not denominated in any dollar form) foreign currency denominated instruments that should maintain current values while dollars erode over time cannot be placed in TFSA’s or RRSP’s without being converted to dollars , CAD or US.

Defeats the purpose holding safe haven currencies entirely in order to preserve today’s dollar values when the dollar, projected to drop later this year and keep dropping against those foreign currencies just gets automatically converted back to dollars.

Yeah..uh hum

Converted to dollars automatically in TFSA/RRSP accounts, then only to descend in value against the foreign currency just converted out of within them.

#89 Henry on 03.17.22 at 9:16 pm

I am glad we have built our RRSPs, TFSAs, GICs, term deposits, provincial bonds and strip bonds to a very decent amount giving us $67,000 a year income. We just retired and I am waiting for my pension to go into my LIRA. We are glad we are debt free for 10 years now and have our house paid off, cars paid off, no credit card debt etc.

Did you see reverse mortgage rates 6.78% and $1,800 a year setup fees, wow. This means in 10.61 years, your reverse mortgage balance doubles, $300,000 becomes $600,000. This is in a still tame, lower interest rate environment. The way interest rates are going up we will see 9% or higher reverse mortgage rates and that will mean a doubling of reverse mortgage debt in 8 years. The rule of 72 shows you how long sometimes takes to double, divide 72 by your interest rate. Get out of debt or it will crush your finances big time.

I know this as many of our strip bonds are in the 5.5% to 6.5% in our RRSPs and 3.85% to 4.55% in our TFSAs. Compound interest works that way and the rule of 72 tells you when it doubles. I think we will see current provincial strip bond rates of 3.25% to 3.5% will be in the 4.25% to 4.75% sometime in 2022, early 2023 and GIC, provincial bond rates currently 3% to 3.15% will be at least 3.75% to 4% in the same time period. I would not be surprised that in coming years bonds, strip bond rates reach 6% to 7% and GIC rates get to 6% or more.

#90 Ponzius Pilatus on 03.17.22 at 9:16 pm

#83 Nonplused on 03.17.22 at 8:39 pm
Time to rebalance those portfolios again:

https://thepoliticalinsider.com/over-a-third-of-americans-are-willing-to-risk-nuclear-war-with-russia-poll/
———————-
If this poll is correct, it confirms it to me that their hatred for anything Russian seriouly blinds their judgement.
This is not a Hollywood Movie.
No one gets out alive.
Hatred for Russia is the only thing that unites the 2 parties.
And Biden is fanning the fire.

#91 willworkforpickles on 03.17.22 at 9:21 pm

#82
“Not a chance in this lifetime. – Garth”
…………………………………………………………………….

Your opinion , its your blog and its your show.

…still , can’t change what i know about it or my mind otherwise.

My word on it is it will become clearer and brought more into focus as the next couple years pass.

#92 baloney Sandwitch on 03.17.22 at 9:26 pm

As others have pointed out – math on early withdrawal of CPP only works if you put it in a TFSA. If you have other sources of TFSA why bother?
Once taxes are factored in, it’s better to delay as the compounding is imbedded in the higher payout at 70. Also, if you don’t need the income why take it? It is basically longevity insurance.

We are funny people – paying after-tax dollars for decades into a plan we then don’t want to withdraw from until age 70. Weird. – Garth

#93 DON on 03.17.22 at 9:30 pm

@Ustabe , George S , Dr. V

Thanks for the insight gents.

Thanks for the blog topic reminder Garth…time goes fast.

#94 Barry on 03.17.22 at 9:33 pm

Next year I’ll be 70 and delayed OAS until then. Why the delay for a measly 36% you say? Well … I don’t need it for one thing. Got enough because I’ve been in dividend growth stocks for decades income keeps going up – this year another $5000 with all the dividend hikes. That’s the ticket but who listens to me. Keep bulking up your TFSA too. Now they can claw back half of my OAS (which they will) and I can use the other 5 grand to pay taxes on dividends which is not very much here in BC and property tax too. Ya gotta plan

#95 Flop… on 03.17.22 at 9:35 pm

We are funny people – paying after-tax dollars for decades into a plan we then don’t want to withdraw from until age 70. Weird. – Garth

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

I’d take it at 55 if they let me.

55 is the new 70 after a life in construction…

M47BC

#96 Shawn on 03.17.22 at 9:51 pm

We are funny people – paying after-tax dollars for decades into a plan we then don’t want to withdraw from until age 70. Weird. – Garth

*********************************
Looks like you are referring to the CPP plan? If so, you might have written that a little quick? CPP contributions are tax deductible so I think that makes them pre-tax dollars. And half the contribution typically comes from the employer.

Different strokes for different folks. I agree with Linda at 24 on this.

Imagine a one income couple. The husband makes a good income up to age 65 maybe even 70. Faces high tax due to still working in his 60’s. No work pension. He delays CPP until 70. Then immediately croaks. Our hero has left his widow with a nice little fully indexed Defined Benefit pension plan for life as the survivor benefit in this case will be very high.

Keep in mind a lot of people hate being forced to withdraw from their RRSP at age 71. A lifetime of savings is sometimes hard to reverse… Ask Ronald Read. Some plan to live until at lest 92 like Ronald.

#97 Philco on 03.17.22 at 9:52 pm

#82 willworkforpickles on 03.17.22 at 8:22 pm
Some here with reading comprehension disorders don’t comprehend the demise of the US dollars world reserve currency status is future tense.
The mess the world is in requires the major economies of the world to restructure as is each their objective before this can and will happen.
The unanimous intent of world leaders to upend the dollar is already a hard wired decision among them.
The US economy will be declining steadily, not restructuring along with major economies over the next few years.
When these global up and comers restructure, a replacement reserve currency will emerge. It will be reality. The forces with this eventually becoming a reality are already too great to stop it.

Not a chance in this lifetime. – Garth
=========================
US has the most stable markets (that aren’t completely corrupt) largest economy in the world. Tons of countries preferer to trade in USD look at Mexico their not selling houses in Pesos.
Been hearing the end of King dollar for a long time. Garths right….never bet against the US of A.

#98 Linda on 03.17.22 at 10:01 pm

#76 ‘Chaddy’ – first, give thanks that you will have so much income that OAS isn’t required. Seriously, are you going to stress about ‘losing’ what totals $7,707 per annum (2022 maximum OAS) before tax? If not getting OAS is your biggest issue in retirement you are one lucky beaver. Note, if you have a pension partner you can split your pension income. The clawback amount for OAS is per person, not per household.

#99 Doug t on 03.17.22 at 10:02 pm

#57 cuke and tomato

Please stop sharing details of your “Disney” life for the love of all that’s holy – we get it we get it your life is a Rockwell painting, a Bing Crosby motion picture, a Hallmark card – please please stop the sappy syrup

#100 Michael in-north-york on 03.17.22 at 10:03 pm

https://thepoliticalinsider.com/over-a-third-of-americans-are-willing-to-risk-nuclear-war-with-russia-poll/

That’s good. Nobody wants a nuclear war. However, we must accept the possibility of a nuclear war, if the enemy starts it.

If we commit to avoiding a nuclear war at all cost, then the ruthless nuclear-armed dictator will keep pushing to the brink, and then demanding concessions for pulling back. There will be no end to his demands, he will want to occupy all NATO countries one by one.

#101 Observer on 03.17.22 at 10:11 pm

Rather than worrying about what happens if we die early (thus not collecting as much total CPP as we could have), perhaps we should give more thought to whether we’ll live longer than expected. If living longer than expected isn’t going to risk running out of money, then take CPP early if you want to. Otherwise, delay it.

#102 Jeff in Vic on 03.17.22 at 10:35 pm

Great Post… love the analysis the reader did! Keep on doing the voodoo you do Garth! Can’t believe I have read 99% of your posts since you started back in the Greenspan “Irrational Exuberance” days of 2008! Similar feel right now as back then when the market peaked and BAM… the financial crisis hit us like a ton of bricks.

#103 AM in MN on 03.17.22 at 10:41 pm

#7 medavidj on 03.17.22 at 2:22 pm

The question is why are two million seniors below the poverty line. If we can educate people not to drink an drive, how about some quality time in school teaching financial independence.

——————————————————-

The biggest reason is a lack of family. How many of these 2 million are or were long term married to just one spouse?

Very few.

You’re not allowed to teach that in public school because it doesn’t fit the prevailing narrative… which is also one of many reasons why you should keep your children out of public schools.

Statistically it is the single biggest factor.

#104 Stone on 03.17.22 at 10:44 pm

It will be a while before I can take CPP however, one thing is very clear. I will take it at 60 or earlier if the option is available by then.

Here’s the thing. I love my B&D portfolio and it churns out a very nice, tax efficient income. By my taking CPP earlier, it means less income I need to drain from my B&D.

Or, it means I can take out as much as would have pre-COP and use the lovely CPP deposited to my account to reduce my tax bill. How? Use the CPP money to pay the income taxes owing, not from the funds I take from my beautiful B&D.

Isn’t that…winning?

#105 cramar on 03.17.22 at 10:53 pm

There is one fallacy as I see it with this logic of taking early Gov’t. pensions. The issue of investing the earlier payout so that much later you are wealthier is not practical for many people. For the simple reason that most people NEED those payments for living expenses, and it is not discretionary income that can be invested. For those who have great private pensions, or are already wealthy, this method works. But for average people who are living pay check to pay check, if they can keep working to 65 or 70 then collect, they will be better off.

#106 kommykim on 03.17.22 at 11:24 pm

RE: #88 willworkforpickles on 03.17.22 at 9:03 pm

True enough no argument…but you missed my point entirely. Both the US and CAD dollar will come under attack . They will become much devalued in the next few years , and as i said , safe haven (not denominated in any dollar form) foreign currency denominated instruments that should maintain current values while dollars erode over time cannot be placed in TFSA’s or RRSP’s without being converted to dollars , CAD or US.

Defeats the purpose holding safe haven currencies entirely in order to preserve today’s dollar values when the dollar, projected to drop later this year and keep dropping against those foreign currencies just gets automatically converted back to dollars.

Yeah..uh hum

Converted to dollars automatically in TFSA/RRSP accounts, then only to descend in value against the foreign currency just converted out of within them.

=======================================

What? Just buy unhedged ETFs, like VXC (Everything but Canada), XEF (Europe, Asia, and Australia), etc.
All things being the same, if the CAD drops against the countries those ETFs are in, then the value of the ETF goes up by the same amount. Google “unhedged ETF”.

#107 Ustabe on 03.17.22 at 11:46 pm

#99 Doug t on 03.17.22 at 10:02 pm

#57 cuke and tomato

Please stop sharing details of your “Disney” life for the love of all that’s holy – we get it we get it your life is a Rockwell painting, a Bing Crosby motion picture, a Hallmark card – please please stop the sappy syrup

There is a significant difference between someone who just seems happy to have made it to the finish line and some one who posts only for self aggrandizement.

I’ll refer you to post #46 and ask, why one and not the other? Different rules for different posters? Gasp!

#108 Bob Dog on 03.17.22 at 11:50 pm

I have not heard a word about Canadian homes owned by Russian billionaire. I guess our housing market is not on the table. Let’s send loser Canadian to fight Russian soldiers to protect the assets of Russian billionaires.

Your own corrupt politicians are the enemy.

#109 Dean on 03.18.22 at 12:01 am

Cramar, I know alot of people waste a lot of money that live so called paycheck to paycheck. If they really were serious about topping up the 2 most important tax advantaged accounts in Canada, RRSPs, TFSAs then they would have easily 15 to 20 times CPP, OAS average income equivalent $240,000 to $320,000 accumulated over the next 20 years. It is much easier than most think, RRSP contribution, RRSP tax refund take that reinvest with other money in TFSA contribution. Do this each year and get even a low 3% rate on that each year and $9,000 to $12,000 a year saved which includes average RRSP refund of $1,800 a year so really $135 to $195 a week+RRSP refund will be doable especially for a couple.I know many people waste $25 to $30 a day on just fast food, junk food, other crap they don’t need. Don’t get me started on smoking, drinking and other bad habits not just financially either.

#110 Sail Away on 03.18.22 at 12:01 am

#57 cuke and tomato picker on 03.17.22 at 5:22 pm

I like the quote old guys are “oracles of wisdom” yes grab the CPP at 60 I have been collecting it for 19 years and my perfect wife for 15 years. There was a time I thought I would never retire but my perfect wife of 50 years felt that after our third child had their degree we should retire and move from Penticton B.C. to south Vancouver Island. We left our workaholic life behind in 2006 traveled the world saw everything we wanted to see enjoyed our grandson took our family to Disneyland
five times downsized from a 5400 sq. ft. house to 1830 sq.ft. My advice is retire as soon as you can you will
never be bored enjoy the charmed life. GLORY TO THE
UKRAINE.

———–

Thanks for the post. It sounds like you and your cheerful family are enjoying life with an appreciation for its wonderful abundance. So nice to see truly happy, joyful, and grateful people. Life is good.

#111 TurnerNation on 03.18.22 at 12:08 am

Trending:the most popular profession these days on Tinder is the Gas Station Attendent.
“Hey bebe let me fill your tank. Special rate for you.
Afterwards we will nozzle closely.”

#112 MalcolmM on 03.18.22 at 12:58 am

The analysis of when to take CPP seems to be incorrect. In the example, taking it at age 60, you only need about 1.4% compound return to reach 156k by age 77. But the person taking CPP at age 65 won’t have just 156k at age 77, they can also invest their pension.

#113 Bdwy on 03.18.22 at 1:14 am

#59 willworkforpickles on 03.17.22 at 5:44 pm

You can’t grow investments in foreign denominations in a TFSA or RRSP. Its all done in CAD

……..
Dammit man, you just blew alot of credibility. I trade almost exclusively us listed stocks in usd in both tfsa and rrsp. Have been since 1997 for rrsp.

#114 Faron on 03.18.22 at 2:14 am

#61 Sail Away

Ah yes. Having been respectfully shown (in the face of your disrespect) that your arguments are junk, you scuttle away trailing a stream of small minded mockery of an irrelevant typo.Pretty clownish behavior for a “respected business” owner.

#115 Jane24 on 03.18.22 at 2:36 am

It’s not what you make in retirement. It’s what you spend. Ensure that you have no big monthly bills. Our three biggest monthly bills are £195 ($ Cdn 341) for property tax, £300 ($ Cdn 525) for food and £195 (£341) for heating and electric combined. I know that all three will be going up due to world events but honestly all our other bills are relatively peanuts. Have no debt.

We learned that big houses have big bills attached so downsized into modern 1800 sq ft which is cheap to run.

We have had the posh cars but now have an economical, reliable VW and Kia that we own.

Since we figure at 68 and 71 we may only have 15 years left we buy a lot of stuff second hand as let’s face it as soon as you open a box it is second hand anyway.

Since heating costs are high and going higher, we are going to start wintering over in low cost, cheap counties, This winter coming up we are trying out Cambodia.

Our best tip is to get a holiday home or even use your own home and put it on http://www.homeexchange.com. This gives you free holidays for life. This year we are doing Puglia, Nottingham, Copenhagen and Montreal during the summer. Still thinking about where to go in October.
Sardinia would be good.

Get out of high cost Canada.

Seize the day. Those 15 years are going to tick away very quickly. Yes get the CPP at 60. You may not even have the 15 years. Who knows.

#116 Piet on 03.18.22 at 3:22 am

An option worth considering is to retire at age 60 but delay collecting CPP for a few years. Assuming income will be relatively low during those gap years, this provides an excellent opportunity to deregister some RSP money without being too heavily taxed on these withdrawals. This method worked well for me.

#117 willworkforpickles on 03.18.22 at 4:14 am

#97 Philco

“never bet against the US of A.”
……………………………………………………………………………………………………..

…and so , precisely what the gullible masses go on believing without question, not minding the epic cataclysmic changes to come as they drink the Kool-aid of that now blind falsehood daily.

#118 Joe Lalonde on 03.18.22 at 4:52 am

Hi Garth,

Backed into a corner with no other options.

He certainly wouldn’t have started this in motion…

When the [International Monetary Fund] starts saying the Ukraine conflict “may” trigger a new world order of global economic and financial systems, we should pay attention, because behind those statements is a reality that no one has mentioned yet.

Think of it this way… If Russia was to just simply withdraw from Ukraine, do you think the western financial sanctions and multinational corporations would just reverse themselves?   Of course not.  What was never mentioned in the sanction package, pushed by NATO and western alliances, was the no retreat Rubicon they created.  Removing Russia from the SWIFT financial exchange was/is irreversible; so too are the global banking sanctions triggered by political will.

What does that mean?  It means from these moments forward something else, some other form of financial transaction process, is going to be needed for Russia and their allies to engage in commerce, banking and economic activity together.  Russia, China, Iran, Saudi Arabia, India, Brazil and other nations are now in a position of being forced to create another mechanism for trade and commerce.

The petro-dollar may factually be dropped as a part of this.  The issue is not ‘if’ it will happen, the issues are how and when they will happen.  Vladimir Putin was pushed into this position by the western financial response, and don’t think for a moment that China and Russia are unhappy about it.

. . .

This is not a ‘losing scenario’ for Vladimir Putin.  Independent payment networks, out of the influence or reach of the U.S. government, are something Putin would openly embrace.  Indeed, the creation of that new financial system for transactions was the primary intent of the BRICS economic alliance.

Pay very close attention to anyone who would say “Putin has already lost”, or any iteration therein.  Putin and Chairman Xi will embrace this new global financial system of independent mechanisms based on value that is separate from the U.S. dollar.

Regardless of the outcome in Ukraine, this situation within the international financial world is not a loss for Putin.  Additionally, and not coincidentally, this new financial world order is also embraced by the domestic ideologues inside the United States who have long felt that our geopolitical power was grossly inflated by the economic value of our currency in the world of trade and finance.

Not only does President Putin and Chairman Xi welcome this new order, no one is smiling bigger than former President Obama and his ‘fundamental change’ crew.

THIS is the change they were hoping for.

A weakened dollar means the wealth behind the valuation is removed from unilateral U.S. benefit, and with that removal wealth spreads around the globe into the trade and payment networks that are based on non-dollar transactions.

All the players who look at the USA as an arrogant and entitled economic system, only made possible by the dollar as the reserve currency, will equally embrace a new financial system.

Klaus Schwab and the WEF/Davos crowd will look happily at a western financial system valued on the currency of a collaboration of nations similar in value to how the Euro was established.

The central bankers in the EU, the IMF, the World Bank, and the WTO will all work on this new fragmented financial system. Perhaps the underlying currency will be digital, which aligns with the need for a western styled digital identity.

This is a direct outcome of the DC political system, NATO, western government and the multinational corporations all aligning to take advantage of the crisis that Ukraine presents.

The new financial mechanisms will likely line up with the Build Back Better program of clean energy and carbon trading.  All of the systems merge together into one unified western valued global financial system.

It’s stunning how no one in Washington DC is seemingly against this outcome.  It’s almost as if they realize, in the biggest of big pictures, the scale of the U.S. debt and deficit is so large that a massive reset is needed.  [Insert Captain Obvious Here]

Regardless of the Ukraine outcome, Putin, Xi, Obama and Klaus Schwab have already won.   The only real losers are American citizens, many of whom were duped into putting Ukraine flags in their social media avatars without thinking about the longer-term consequences.

And what core Countries would this be you ask?

When the [International Monetary Fund] starts saying the Ukraine conflict “may” trigger a new world order of global economic and financial systems, we should pay attention, because behind those statements is a reality that no one has mentioned yet.

Think of it this way… If Russia was to just simply withdraw from Ukraine, do you think the western financial sanctions and multinational corporations would just reverse themselves?   Of course not.  What was never mentioned in the sanction package, pushed by NATO and western alliances, was the no retreat Rubicon they created.  Removing Russia from the SWIFT financial exchange was/is irreversible; so too are the global banking sanctions triggered by political will.

What does that mean?  It means from these moments forward something else, some other form of financial transaction process, is going to be needed for Russia and their allies to engage in commerce, banking and economic activity together.  Russia, China, Iran, Saudi Arabia, India, Brazil and other nations are now in a position of being forced to create another mechanism for trade and commerce.

The petro-dollar may factually be dropped as a part of this.  The issue is not ‘if’ it will happen, the issues are how and when they will happen.  Vladimir Putin was pushed into this position by the western financial response, and don’t think for a moment that China and Russia are unhappy about it.

So, it is what it is…
China Lockdowns because of virus?
I don’t think so.

One last point.
Currency can be made to infinity…resources needed to make this happen are very narrowly limited and our politicians really failed in understanding how products needed are created.

#119 Sail Away on 03.18.22 at 7:30 am

#56 Faron on 03.17.22 at 5:09 pm
@The West & Sail Away

To clarify, these yachts have been fully appropriated by the government entities who seized them? Never to be returned and with no due process? Please provide evidence.

If you were paying attention (rather than engaging in disrespectful insults) you may see that the comparison against the case of the airliners is not a whataboutism at all. In fact, you have absorbed the very false equivalency Putin had hoped you would. If your outcry is at al common, it has clearly indicated that the Tucker Carlson audience is fertile ground for the propaganda that will surround a false-flag chemical weapons attack should Putin become desperate.

———

Ah. Several things to unpack here… like a multi-surprise Kinder egg. Let’s use the discussion as a learning opportunity. In an itemized way:

1. The West decried foreign seizure of Russian citizens’ assets

2. Sail Away responded with a roadmap of the precedent used throughout history for similar citizen asset seizure.

3. Faron introduced the word ‘permanently’ to the seizure question and requested a specific list of assets seized permanently by the US and NATO, and further requested these seizures meeting specific requirements he just invented be compared and contrasted to confiscation of assets by Putin.

This is where the discussion became intellectually dishonest by Faron’s introduction of no less than three logical fallacies, known as ‘The Straw Man’, ‘Whataboutism’, and ‘Ad Hominem”. To wit:

A. The ‘Straw Man’ introduces a specific subject to a debate for the express purpose of distorting the core discussion, then arguing against the purposefully distorted subject. The distorted subject in this case being ‘permanent seizure of assets’.

B. ‘Whataboutism’ is rhetorical trickery that involves accusing others of offenses as a way of deflecting attention from the subject at hand. Specifically in this case requesting comparison of NATO seizures from Russian citizens to seizures of foreign company assets by the Russian government.

C. ‘Ad Hominem’ attacks the other party of the discussion rather than the discussion subject itself. Specifically in this case claiming disrespectful insults (they weren’t, they ridiculed the use of whataboutism instead of being intellectual honest), and second, labelling the other party as ‘Tucker Carlson audience’.

Luckily, the above three logical fallacies were implemented a bit ham handedly, so easily spotted and illuminated. It is nearly impossible to hold rational discussions with practioners of logical fallacy-ism, since the discussion constantly shoots off on unrelated, booby-trapped tangents. Hope this was helpful!

#120 BillyBob on 03.18.22 at 7:31 am

My retirement financial plans have always been predicated on the assumption of zero government or private pension, hence arbitraging high income in zero/low-tax jurisdictions plowed into diverse investments, to low-cost lifestyle locale. Only seemed sensible to invert the situation from low-income/high-cost Canada.

But even surplus to needs I still intend to collect my pittance of CPP the day I’m eligible. And gonna make sure they mail a cheque instead of direct deposit. I expect it’ll be pleasant to open the mailbox and see an envelope with a Canadian flag on it every month and know it’s buying my Pilsner Urquell.

Life’s about the little pleasures, after all. :-)

#121 crowdedelevatorfartz on 03.18.22 at 7:59 am

@#118 Joe Conspiracy

As soon as you started spewing the “new world order” tripe…..gone.

It isnt about
Putin is a scheming murderer that will do anything to stay in power.
Nothing else matters to him except saving his own (rather large) head.

#122 crowdedelevatorfartz on 03.18.22 at 8:01 am

@#114 Faron.
“Pretty clownish behavior ”

+++

Physician…heal thyself.

#123 Retiring soon? on 03.18.22 at 8:11 am

Just wondering, if you plan to stop working at 60 but delay taking CPP for say 2 years, will your actual benefit not be reduced due to not paying into the plan for those 2 years?

#124 willworkforpickles on 03.18.22 at 8:46 am

#118 Joe Lalonde

That article from “THE LAST REFUGE”
“IMF-reports-the-ukraine-crisis-will-fundamentally-alter-global-economic-trade-finance-and-political-order” you cut and pasted isn’t too particular with regard to the twilight of the Petro-dollar and the rising Petro-yuan . Doesn’t cover the coming complete and total shift enough to do it any real justice.

#125 Sail Away on 03.18.22 at 8:46 am

#114 Faron on 03.18.22 at 2:14 am
#61 Sail Away

Ah yes. Having been respectfully shown (in the face of your disrespect) that your arguments are junk, you scuttle away trailing a stream of small minded mockery of an irrelevant typo.

——–

Your typos are proof to me of God’s beneficence.

Beauty, after all, is in the eye of the beerholder.

#126 willworkforpickles on 03.18.22 at 9:10 am

#113 Bdwy

” #59 willworkforpickles on 03.17.22 at 5:44 pm

You can’t grow investments in foreign denominations in a TFSA or RRSP. Its all done in CAD

……..
Dammit man, you just blew alot of credibility. I trade almost exclusively us listed stocks in usd in both tfsa and rrsp. Have been since 1997 for rrsp.”
………………………………………………………………………………………………………

No…to the contrary , I was referring to dollars without adding the US dollar in with the CAD regarding specifically the TFSA’s and RRSP’s.

By stating “investments in foreign denominations” I was referring to currencies other than the dollar , any dollar denomination, such as the Swiss Franc for instance…that would automatically be converted into dollars.

Sorry for the confusion.
This is why I usually try to elaborate with details as much as I do to avoid misunderstandings.
My bad for not going into enough explanatory detail with this particular post creating the misunderstanding.

#127 KLNR on 03.18.22 at 9:29 am

@#21 Søren Angst on 03.17.22 at 3:00 pm
And more fun for the Retiree number crunchers.

If living in the Left Coast, take a drive to Burnaby Hospital.

3rd floor (if I recall correctly).

Geriatric wing.

Observe the “Golden Years” everyone is saving up for.

[Palliative’s on 2nd, Timmy’s also on 3rd]

most folks simply don’t want to acknowledge this truth.
you’re on bonus time after 60.
momento mori.

#128 Ponzius Pilatus on 03.18.22 at 9:45 am

So, we had about 100 posts claiming to know when the right time is to take the CPP.
And they had the “numbers and calculations” to back it up.
One even said age 78 was the magic number.
This always reminds me of the old accounting joke, where the boss asks the accountant “What is the number?”
And the accountant answers “What do you want it to be?”.

#129 Ponzius Pilatus on 03.18.22 at 9:48 am

#120
You Sir,
Are a despicable specimen of a human being.

#130 willworkforpickles on 03.18.22 at 10:04 am

#106 kommykim

“What? Just buy unhedged ETFs, like VXC (Everything but Canada), XEF (Europe, Asia, and Australia), etc.
All things being the same, if the CAD drops against the countries those ETFs are in, then the value of the ETF goes up by the same amount. Google “unhedged ETF”.
…………………………………………………………………………………………………………..

Yes… but this isn’t quite on the point i was making to begin with.

At any rate i agree with what you are saying here and could add… if what you’re looking for is exposure to the European equity markets and their currencies, you can do that with Canadian ETFs. The iShares MSCI Europe IMI Index ETF (XEU) and the Vanguard FTSE Developed Europe All Cap Index ETF (VE) both trade on the Toronto Stock Exchange in Canadian dollars. But their underlying holdings are denominated in pounds, euros, Swiss francs, and others, so you have exposure to these currencies as well as the stocks themselves. If and when the currencies appreciate in value relative to the Canadian dollar, and they will in time now…you’ve just preserved the current value of your dollars against a future dropping CAD.

#131 Atrate on 03.18.22 at 10:14 am

Like a lot of folks on this blog, I am 60 and still working. I pay the maximum in CPP premiums, and have been doing so for a while. I don’t see the benefit of collecting CPP only to see 50% of it disappear into the maw of the tax man. However, I was wondering if anyone had factored post-retirement benefits (PRB) into their equations?

The PRB program allows Canadians who are over 60, receiving the CPP but still working and contributing to the CPP, to receive additional benefits for their contributions.

The program started in 2012 and the first PRB payments were made in 2013.

Do any of you blog dogs have any experience with this? Garth, do you have any insight to offer?

Do you earn over $250,000 a year? That’s the only way you will lose half of CPP to taxes. If that’s the case, you certainly do not need to vex about something as inconsequential as the PRB. – Garth

#132 Gruff403 on 03.18.22 at 10:18 am

Delaying CPP is like refusing a raise. Imagine the boss says “I’ll give you a 36% raise in five years but until then you get nothing.”
I can do more with less now then I can with more later when the knees and back are done.
Check out drpensions website. For a small fee you can get exact CPP amounts from someone who actually knows all the answers and you can make informed decisions based on your individual circumstances.

#133 willworkforpickles on 03.18.22 at 10:31 am

For the sake of brevity, my plan is to convert about half to 60% of my US dollars to Swiss francs and then out of Swiss francs into Euro’s whenever Europe restructures its economy and future banking system. All to preserve the current value US dollars now hold against a future dropping dollar many economists expect to occur.

#134 BillyBob on 03.18.22 at 10:35 am

#129 Ponzius Pilatus on 03.18.22 at 9:48 am
#120
You Sir,
Are a despicable specimen of a human being.

=========================================

And here I was thinking the small pleasures associated with collecting a Canadian government cheque weren’t to begin for more than ten years. Thanks for the early smile! lol

Would it be too much to ask why claiming a pension benefit I paid into during my working years in Canada and am thus legally entitled to, is despicable? Or were you moralizing over my intention of spending it on beer?

I mean, at least I won’t waste it.

#135 Philco on 03.18.22 at 10:38 am

#82 willworkforpickles on 03.17.22 at 8:22 pm
====================
Hey Prickles…I was just thinking….So go with what?
Euro = Heinz 57 pile of dog doo.
Chinese yuan = train wreck economy crooked market
Russian Ruble = is now rubble.
King dollar looks like a diamond in comparison to the rest.

#136 Dharma Bum on 03.18.22 at 10:41 am

The idea that you’ll get more money from our dodgy federal government if you wait longer for it is an illusion.

Like Garth says, if it’s a “sweet deal” that the government is offering you, don’t take it. It’s not to your benefit. They have it all figured out and the odds are rigged in their favour.

The government is happier having it in their hands than in yours. Big surprise. They are thieves. They remind me of the mafia guys saying that they’ll just hang onto your money for you and keep it safe. It’ll be here for you when you need it. Donworryboutnuthin. Itakecareeverythin.

Yah. Right.

No thanks, I’ll take care of my own money today. It’ll yield more than what the government’s promising in the future.

Guaranteed.

Go on. Take the money and run!

https://www.youtube.com/watch?v=ido6NrjGi2o

#137 Dharma Bum on 03.18.22 at 10:53 am

#105 cramar

But for average people who are living pay check to pay check, if they can keep working to 65 or 70 then collect, they will be better off.
——————————————————————————————————-

Boy, that sounds like a blast.

Working like a slave until 70, then collecting a poverty line stipend that you pretty much funded yourself for close to 50 years.

“Better off”.

Ain’t life grand?

#138 Ponzius Pilatus on 03.18.22 at 10:58 am

#127 KLNR on 03.18.22 at 9:29 am
@#21 Søren Angst on 03.17.22 at 3:00 pm
And more fun for the Retiree number crunchers.

If living in the Left Coast, take a drive to Burnaby Hospital.

3rd floor (if I recall correctly).

Geriatric wing.

Observe the “Golden Years” everyone is saving up for.

[Palliative’s on 2nd, Timmy’s also on 3rd]

most folks simply don’t want to acknowledge this truth.
you’re on bonus time after 60.
momento mori.
——————————-
I think most people know of someone who has/had Alzheimer’s, and are aware how devastating this disease can be.
For many, this is an incentive to put aside even more, so that they are not a financial burden.
That makes it even more important not to tie up up all your assets in RE, which can be tricky to monetize, when the need arises.
But I speak from experience, that spending more money does not necessarily translate into better care.

#139 Nonplused on 03.18.22 at 11:08 am

The blowback begins.

The action by the US Federal Reserve and the US Government to seize Russia’s foreign reserves was not only illegal, but worse, it was stupid.

The message has been sent to all nations that hold reserves of any kind, treasuries, cash, gold, euros, what have you, in the US banking system: All your money belongs to us now.

Consider:

https://mishtalk.com/economics/what-does-china-do-with-a-dollar-thats-no-longer-risk-free-buy-gold

Strangely, the US may have just lost the long war. And to nobody but themselves. This can only have happened because they keep electing and appointing people with the mindset of children to run things.

Trust, once lost, cannot be recovered. Buy all the things. It’s what all the others are going to be doing. Slowly at first, then all at once. Don’t be late. There are way, way, way too many dollar claims out there to satisfy even a smidgen of them if they start leaving the hypothetical world for the real world.

#140 Faron on 03.18.22 at 11:12 am

#119 Sail Away

Ah yes, the 4AM diatribe. Hallmark of the stablestest genui who truly value and embody emotional control.

But, you digress. Shall we get back to the argument about the effect of freezing oligarch marine assets on the US dollar’s reserve currency status? Or do you need a face- and ego-saving offramp so that you can scuttle off to a dim corner to catch up on some shut-eye?

#141 DON on 03.18.22 at 11:13 am

https://www.ctvnews.ca/canada/canadians-cutting-back-spending-on-groceries-restaurants-as-inflation-rises-poll-1.5824545

https://www.cbc.ca/news/canada/calgary/calgary-inflation-cpi-gasoline-groceries-prices-1.6387525

Turns out Albertan’s have more consumer debt than other Provinces….?

#142 Socialist woke billionaire on 03.18.22 at 11:20 am

#120
You Sir,
Are a despicable specimen of a human being.
#########

Same approach as #120, respect sir. Ignore the stupid comments..

Canadian government needs to be taught a lesson.lool

#143 Damifino on 03.18.22 at 11:21 am

#123 Retiring soon?

Just wondering, if you plan to stop working at 60 but delay taking CPP for say 2 years, will your actual benefit not be reduced due to not paying into the plan for those 2 years?
———————————

It wont be much and will depend more upon on how much and/or how long you’ve been in the plan.

I retired at 56 and started taking CPP at 60 (it was a 30% penalty then, now it’s 36%). Still, I had been paying into the plan since its inception in 1965 when I was a teenager of 14 working a summer job. I think in that year I paid around 5 bucks in total.

Today I get the typical amount someone who’d been in the work force about 40 years would get, (and who took benefits early), about $700/mo.

#144 I don't know on 03.18.22 at 11:31 am

#117 willworkforpickles on 03.18.22 at 4:14 am

Actually it is your understanding of the global financial system, specifically how power is projected, that looks like it came from a youtube video or facebook comment section. Rudimentary at best, but easily sellable on a youtube video for clicks and views.

If the USD had a timeframe of 50 years of reserve status, it has just been extended to 100 years after the events of the last three weeks.

All it takes is a cursory look to see who is really consolidating power here. Pay attention to who has superior demographics and geography. Pay attention to who can step up to the plate and offer diplomatic solutions. See who everyone looks towards in times of crisis.

Your correct about US debt being high, but it also has to be compared to assets to get the full picture. When compared to total US assets (physical and monetary), the debt isn’t as crushing as it appears.

IDK

#145 Nonplused on 03.18.22 at 11:39 am

#100 Michael in-north-york on 03.17.22 at 10:03 pm
https://thepoliticalinsider.com/over-a-third-of-americans-are-willing-to-risk-nuclear-war-with-russia-poll/

That’s good. Nobody wants a nuclear war. However, we must accept the possibility of a nuclear war, if the enemy starts it.

If we commit to avoiding a nuclear war at all cost, then the ruthless nuclear-armed dictator will keep pushing to the brink, and then demanding concessions for pulling back. There will be no end to his demands, he will want to occupy all NATO countries one by one.

—————————————–

Yes, you are quite right. Biden and a long list of dictators before him have come to occupy most of Europe with their nuclear weapons close behind them. From Moscow this looks rather ominous. And if history is any guide, once Ukraine falls the invasion of Russia is a year behind. To the west, it seems impossible that the west would ever invade Russia for the fifth time in 200 years, we tell ourselves such sweet dreams, we want nothing but peace after all and would never dream of war to get say land and oil. But the Russians have a lot of unmarked graves that kind of burn an impression in their minds as to what happens next. First Poland, then Ukraine, then Russia. It is the same every time.

Ukraine will not fall to the west. It will be a desolation before that happens. All the money the US is pumping in will just make the final result more dismal, and the ruin of Ukraine more complete. It must be remembered that Russia hasn’t taken the gloves off yet, not even close. And they are already running out of targets. Nothing to do but bomb the supply convoys coming out of Poland and wait things out at this point.

#146 Russ on 03.18.22 at 11:56 am

Ponzius Pilatus on 03.18.22 at 9:48 am

#120
You Sir,
Are a despicable specimen of a human being.
=============================

Hey Ponz,

What did you find despicable about comment #120?

I musta missed something as I took the point being if you have a low retirement income it goes farther in a BCC (best cost country).

Cheers, R

#147 kommykim on 03.18.22 at 12:09 pm

RE: #117 willworkforpickles on 03.18.22 at 4:14 am
#97 Philco

“never bet against the US of A.”
……………………………………………………………………………………………………..

…and so , precisely what the gullible masses go on believing without question, not minding the epic cataclysmic changes to come as they drink the Kool-aid of that now blind falsehood daily.

=======================================

The Roman empire didn’t fall in a day… It took centuries and it was more of a slow transformation than a collapse. The same goes for the USA. Not likely to happen within our investing time frame.

#148 Dr V on 03.18.22 at 12:23 pm

116 Piet

“An option worth considering is to retire at age 60 but delay collecting CPP for a few years. Assuming income will be relatively low during those gap years, this provides an excellent opportunity to deregister some RSP money without being too heavily taxed on these withdrawals. This method worked well for me.”
—————————————————

Everyone should look at their record of contributions in order to determine how many low contribution years they have already. Delaying the CPP after stopping work adds years of zero contributions and could lessen the increase expected by delaying the benefit.

The CPP “invite” at age 59 they send out will give your
expected benefit at 60. The fine print says that contributions must continue to be able to receive the full
increase if taken later.

Also watch drawing down your RRSP too quickly, unless
it is large (say $500k+). Have your advisor run a tax simulation. Mine worked out noticeably better if I spread out my income over several accounts. Surprised both me and my adsvisor.

#149 West is defeated already on 03.18.22 at 12:31 pm

Give up your car and start walking. That’s an order.

The International Energy Agency (IEA) on Friday directed global governments to urgently cut oil supply to domestic consumers and encourage compliance with its call for lowered consumption.

The IEA 10-point plan to drive “changes in the behaviour of consumers” and reduce gas demand at the pump includes reducing speed limits, working from home three days a week, more electric cars, car-free Sundays, more cycle lanes, cheaper public transport and greater use of long-distance trains over planes.

The IEA also called on the OPEC+ group of oil-producing nations led by Saudi Arabia and Russia to help “relieve the strain” on markets, while warning that the world faced the biggest shock to supply “in decades.”

The outbreak of war in Ukraine has already led to major economies, such as the United States and Canada, sanctioning Russia by banning imports of oil as prices soar accordingly.

Rotflmao, biggest recession ever is baked in the cards..

#150 lee on 03.18.22 at 12:57 pm

The average fully detached house in Toronto is now approaching $2M. Only wealthy people buy $2M homes. I think Canada gets about 200,000 economic class immigrants a year who come with money or skill. Expect the $2M to keep rising, interest rate increases or not. People with high incomes buy houses.

Maybe you should read this before posting further comments. – Garth

#151 Sail Away on 03.18.22 at 1:04 pm

#140 Faron on 03.18.22 at 11:12 am
#119 Sail Away

Ah yes, the 4AM diatribe. Hallmark of the stablestest genui who truly value and embody emotional control.

But, you digress. Shall we get back to the argument about the effect of freezing oligarch marine assets on the US dollar’s reserve currency status?

——-

Completely irrelevant, but I usually wake up somewhere between 3-5am, and from then until 7 is hyper productive. Clear head, no distractions, ability to concentrate fully. I enjoy all-nighters on occasion to really noodle out complicated conundrums. One secret to success. Army strong!

In answer to your question: Naw. Speculative.

#152 Michael in-north-york on 03.18.22 at 1:10 pm

#145 Nonplused on 03.18.22 at 11:39 am

Biden and a long list of dictators before him have come to occupy most of Europe with their nuclear weapons close behind them. From Moscow this looks rather ominous. And if history is any guide, once Ukraine falls the invasion of Russia is a year behind. To the west, it seems impossible that the west would ever invade Russia for the fifth time in 200 years, we tell ourselves such sweet dreams, we want nothing but peace after all and would never dream of war to get say land and oil. But the Russians have a lot of unmarked graves that kind of burn an impression in their minds as to what happens next. First Poland, then Ukraine, then Russia. It is the same every time.

Ukraine will not fall to the west. It will be a desolation before that happens. All the money the US is pumping in will just make the final result more dismal, and the ruin of Ukraine more complete. It must be remembered that Russia hasn’t taken the gloves off yet, not even close. And they are already running out of targets. Nothing to do but bomb the supply convoys coming out of Poland and wait things out at this point.
===

Are you day-dreaming? Or did you just forget to take your medications today?

Russia is going down. Nobody will invade them from the west. They will happily sell their Siberian lands to China, since the incompetent and corrupt bosses in Moscow can’t manage those lands themselves and wouldn’t let the locals do the business. They already sold hundreds of square kilometres to Chinese companies for business. Russia retains the nominal ownership of those lands for now. In a couple of decades, China will formalize the status.

Once Russia loses Siberia, they can do whatever they want in their remaining little pen. Few natural resources left in the European part of Russia, no modern industries, so who cares.

#153 Philco on 03.18.22 at 1:20 pm

#147 kommykim on 03.18.22 at 12:09 pm
RE: #117 willworkforpickles on 03.18.22 at 4:14 am
#97 Philco

“never bet against the US of A.”
……………………………………………………………………………………………………..

…and so , precisely what the gullible masses go on believing without question, not minding the epic cataclysmic changes to come as they drink the Kool-aid of that now blind falsehood daily.

====================================
The Roman empire didn’t fall in a day… It took centuries and it was more of a slow transformation than a collapse. The same goes for the USA. Not likely to happen within our investing time frame.
==================================
Yup why worry about it. All empires fail eventually.
The Mexican Peso blew up in 1994. People survived with hard assets. They knocked a few zeros off of it, jammed up interest rates to curb inflation, attract capital and carried on. I was there.
Just like all the nutty worrying about a housing or stock market wipeout here. Nothing you can do. The gold bugs will straight ya all out. LOL

Personally I never counted on CPP or others.
Just built my biz and still building more stuff today. I can can get a 15-20% return on my ###### buildings plus its an inflation hedge. Each to his own.
I guess CPP is bonus stuff.
Best

#154 Don Guillermo on 03.18.22 at 1:45 pm

#141 DON on 03.18.22 at 11:13 am
https://www.ctvnews.ca/canada/canadians-cutting-back-spending-on-groceries-restaurants-as-inflation-rises-poll-1.5824545

https://www.cbc.ca/news/canada/calgary/calgary-inflation-cpi-gasoline-groceries-prices-1.6387525

Turns out Albertan’s have more consumer debt than other Provinces….?
*********
Since Alberta has the youngest population it probably makes sense that they carry more debt. As a bonus it seems to bring some people joy.

#155 Phylis on 03.18.22 at 2:03 pm

Hmmm, must be a full moon a risin’.

#156 Faron on 03.18.22 at 2:08 pm

#151 Sail Away

Oh of course, you “is” hyper productive at 3AM. On the internet. Never dolefully doomscrolling or dopamine pawing at the futures markets or watching cute cat vids or catching up on Adele gossip. That’s cool. I’m the handsome blend of Tom Hanks and Jake Gyllenhall on the internet. Fact. Ask BillyBob. He likes to talk about how I look.

Of course, hyperproductivity to a respected engineer who is logical and chock-a-block full of self- and emotional- control means dedicating a chunk of that most valuable time to posting to a meaningless comments section in reply to a guy he doesn’t want to interact with. Totally makes sense.

Best part about guys who proclaim to have all the self control on the glorious Earth is that they somehow keep leaking SAGIs like a byproduct of an Olestra diet. Thanks bro.

Anyhow, interesting that nonplusedomirsov dredged up the same trope about asset seizure and the demise of the US dollar as The West and that you hitched your wagon to. Gosh, it’s almost as if this is now a right-wing talking point. You know, like those Tucker Carlson segments that Putin sees to having aired on Russian state media. I wonder why?

Also, and this is a real whataboutism (not to be confused with my evidence of a faulty basis for argument) have you ever cared to look at instances of real asset forfeiture abuse in the US? Against its own citizens? I know these “woke” civil liberties aren’t your bag, but worth a gander:

https://www.aclu.org/issues/criminal-law-reform/reforming-police/asset-forfeiture-abuse

#157 Phylis on 03.18.22 at 2:13 pm

#132 Gruff403 on 03.18.22 at 10:18 am
Delaying CPP is like refusing a raise. Imagine the boss says “I’ll give you a 36% raise in five years but until then you get nothing.”
I can do more with less now then I can with more later when the knees and back are done.
Check out drpensions website. For a small fee you can get exact CPP amounts from someone who actually knows all the answers and you can make informed decisions based on your individual circumstances.
Xxxx
…or you can get it for free… follow the links.
https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html

#158 Observer on 03.18.22 at 2:33 pm

#148 Dr V

The CPP “invite” at age 59 they send out will give your
expected benefit at 60. The fine print says that contributions must continue to be able to receive the full
increase if taken later.

^^^^^^^^^^^^^
Not sure what you are saying here.

Hmmm

#159 Lee on 03.18.22 at 2:47 pm

# 150 Follow-Up,

The fact that the average wealth of immigrants can, depending on length of time in Canada, fall below that of the average Canadian born person does not respond to my argument that economic class immigrants alone (of which I suspect 100,000 per year come to TO and require 50,000 or so places to live) can keep Toronto prices rising. Let alone the many other immigrants who need a place to live. These are not foreign buyers either so I’m not pooping on foreign buyers. This is a lot of people with money or good levels of skill. When Canada only hopes to build 150,000 new residences a year, and probably few of which will be in Toronto, 50,000 goes a long way to filling inventory. It’s all agents talk about.

There are over 55,000 new housing units currently under construction in Toronto alone. – Garth

#160 Sail Away on 03.18.22 at 3:55 pm

#156 Faron on 03.18.22 at 2:08 pm
#151 Sail Away

Of course, hyperproductivity to a respected engineer who is logical and chock-a-block full of self- and emotional- control means dedicating a chunk of that most valuable time to posting to a meaningless comments section in reply to a guy he doesn’t want to interact with. Totally makes sense.

——–

Yes, it does make sense. I am always working on my writing, thought process, and thought-to-paper organization. It greatly helps to have interwoven logical fallacies and misrepresentations with which to practice. Thanks! And in advance as well.

Correct, I do not enjoy interacting with you, but will often reply. Care for a test? Try this: don’t respond to my comments, don’t pull up my historical posts to try to prove a point, don’t compare me to the worst of history’s oppressors, don’t gratuitously liken me to any of the -isms or -ists your brain tells you would be a good idea…

And wait to see if I initiate contact. Deal? Starting in 3…. 2…. 1….

#161 Dr V on 03.18.22 at 4:27 pm

158 Hello Observer

I pulled out my CPP invite from 2018. Here is the wording

“If you were 65 today, based on your average
pensionable earnings since age 18 you could receive a
retirement pension of $y…….If you apply at the age of
60, you could receive a retirement pension of $x.”

I confirmed that x = 0.64y so 36% less or 0.6% per mo for 60 mo.

It’s the words “average pensionable earnings” that is the trick. if you dont work from 60 to 65, this average would drop, and the benefit at 65 will be less than y, but still more than x.

You’re allowed to drop out some low earning years to calculate this average. I used up most of those with school. If you havent used those up, you may be able to drop some or all of the 5 years from 60 to 65 as well.

I calculated my “average” from the years listed on the invite and wound up within a couple of dollars of their payment at 65, confirming that I would still need to pay that “average” to receive that amount. The small
discrepancy may be due to how they use the years you turn 18 and 65.

But if you still receive a wage, you still contribute even though the benefit may not be increased.

Hope that helps. Not sure if you can create a Service Canada account and get a statement of your contributions.

#162 willworkforpickles on 03.18.22 at 4:50 pm

#147 kommykim

“The Roman empire didn’t fall in a day… It took centuries and it was more of a slow transformation than a collapse. The same goes for the USA. Not likely to happen within our investing time frame.”
……………………………………………………………………………………………………………………..

The same doesn’t go for the US. Convert that to decades and then years with the never in history before rising national debt structure now leading us to ruin.

#163 willworkforpickles on 03.18.22 at 5:03 pm

#135 Philco & #144 I don’t know

You two are just too far out in left field with your obvious reading comprehension deficit disorders for me to go on responding to your nonsensical comments.
You Philco especially have taken what i have actually said well out of context with your reading comprehension mish-mashs. And you, I don’t know, with that selective reading problem of yours.

#164 willworkforpickles on 03.18.22 at 7:39 pm

If the USD had a timeframe of 50 years of reserve status, it has just been extended to 100 years after the events of the last three weeks.

All it takes is a cursory look to see who is really consolidating power here. Pay attention to who has superior demographics and geography. Pay attention to who can step up to the plate and offer diplomatic solutions. See who everyone looks towards in times of crisis.

Your correct about US debt being high, but it also has to be compared to assets to get the full picture. When compared to total US assets (physical and monetary), the debt isn’t as crushing as it appears.

…………………………………………………………………………………………..

I had to come back to this one as you are so completely wrong on all points…the only thing you ever hit the nail on the head with is the handle you go by…I don’t know. At least that’s bang on , because you really don’t know what you are talking about as usual.

First off …I don’t as i have previously mentioned, get any significant deal of info that i use from any posted you-tube source.

And so, with regard to the time frame of the reserve currency where you say the events of the last 3 weeks have greatly extended its potential life cycle.
…well the events of the last 3 weeks have actually reduced it and if anything even sped up its demise.

Biden with his failed foreign relations record has gotten even worse with his my way or the hi-way mishandling of China. His overbearing imperiousness of sanctions powers he holds the world hostage too. And the very fact the debt bubble economy has been created by overzealous US governments enabled solely by the world’s reserve currency status.

We have a corrupt US government who have always felt it their unabatable right to create debt without consequence. They have created the current mess we are in and so far as to have left no solutions to get us back out. They were were only enabled to do this to this great extent in holding of the world’s reserve currency status. They had the ability to do as they wished but should never have done so in as far as destroying the economy with this power.
Now there is nothing going on with the current government even concerned with changing course, so world resentment continues to build.
This is why the world has lost faith in the US dollar and although stuck with it for now , wait in desperation to leave it behind before it implodes.

This wipes out the next point you made as its being rendered moot and will become entirely ineffective moving ahead in the next few short years .

Your last point regarding US assets and debt is well out of the picture, way off base and has nothing to do with US reserve currency status and where its headed.

What a bizarre disconnect of understanding of these world issues you just think you know all about.

I can barely believe just how far removed from actual fact and even the way some of you can just whip up comment from your own botched understandings the way you and others here go on doing.

#165 willworkforpickles on 03.18.22 at 7:42 pm

That last post of mine was to be headed and directed to #144 I don’t know.

#166 Observer on 03.18.22 at 8:04 pm

#161 Dr V on 03.18.22 at 4:27 pm

Thanks. Food for thought.

#167 M. Towne on 03.19.22 at 11:50 pm

Taking it early may make sense in the abstract, and for those of us who have other resources, it probably does.

But unfortunately if you’re one of those people who is going to have to rely on CPP and OAS for your entire retirement income, you ‘re going to need every penny you can get. And so the argument “take the money at 60 when you’re still young and healthy enough to enjoy it” gives way to “delay taking it until 70 and keep working in the meantime, while you’re young and healthy enough to do so.” Which suuuuuuucks but when the rest of your life could still be decades, even if you’re poor… that extra 42% is going to make all the difference.