10 Key CPP & OAS Facts You NEED to Know

[@wellbuiltwealth]

There is a gray hair shooting straight out of my goatee. It's literally all I can see when I watch this... 🙃

[@rexertek]

I never noticed it until you mentioned it. Now I can't stop looking at it!😁

[@wellbuiltwealth]

@@rexertek😭

[@RC-fh2lk]

So it starts lol!!

[@pwdrhrn]

You had to mention that. Now it's all I can see. Thanks.

[@denii9384]

Thank you so much for this valuable education, presented in a clear, concise manner! This presentation should be built into high school curriculums.

[@pauljose1261]

Probably the best presentation of this topic that I've seen. Clear, concise and factual. Thank you. Just to add to your point #3 Delay and point #4 Indexed to Inflation., the higher delayed payment with the bonus will receive a higher indexing adjustment every year for the balance of your life. So for those who can afford to wait until 70, the financial return is significant in both ways.

[@fazalrahaman5910]

Rhys, thank you for another informative video. Would you do a video on the Guaranteed Income Suppplement (GIS) and how it interacts with CPP and OAS. Thanks.

[@ddavidson5]

A couple of things I discovered when it comes to applying for OAS. 1) If you decide to defer your OAS you will have to apply to start receiving it later. Although they would have started my OAS automatically I deferred and when I did apply for some reason I needed to provide documentation like a marriage certificate etc. that needed to be certified at a Service Canada office. I'm not sure why but that was the process. 2) Apply at least 6 months before you want your OAS to start. They say on their web site 3 months (which I did) but that must be best case scenario, it took 6 months before I received any OAS.

[@bernadettebourassa8385]

This is helpful and concise as you promised👍🏻!

[@Jenomonix]

Love your videos Rhys. IMO should be required viewing for every Canadian. Hey, consider doing a video on RESP vs TFSA for your children’s education savings.

[@wellbuiltwealth]

Thank you!!

[@irinic9546]

Such a great video!! So informative and concise!!

[@Pkeats817]

I needed these reminders. 😊

[@mspeters1]

Another great video Rhys! Can you explain a bit how the GIS works? Much appreciated

[@wellbuiltwealth]

Thanks! I do cover that to some degree in this vid: kzbin.info/www/bejne/p2SvoISdd8xqY6s

[@mspeters1]

Thank you!!

[@neilbertram1922]

Great summary of a huge amount of information!

[@smalleaglefpv3186]

Great videos, simple and easy to understand!

[@jamesmcarthur5787]

Thanks for the details.

[@debbiemartell8100]

Such a great video, thank you so much!

[@kengilbert2620]

Thank you for the concise presentation. Just to clarify, it is only OAS that gets a 10% bump at 75, and not CPP?

[@wellbuiltwealth]

You’re welcome! And yes, you are correct.

[@whaler3232]

Fantastic cheat sheet!

[@michelhamel8898]

Very clear info

[@bobeos]

Great content. I would suggest to mention that CPP doesn’t apply in Quebec but rather QPP and the nuances

[@wellbuiltwealth]

True that!

[@LB20278]

After watching many of these CPP videos referencing retirement age of 60 versus older, I've never seen anyone talk about the break-even age when comparing retirement at age 60 instead of 65.

[@wellbuiltwealth]

I plan to do so in the future. In the meantime, check this: www.sunlifeglobalinvestments.com/content/dam/sunlife/regional/canada/documents/slgi/810-5086-04-21-should-you-consider-delaying-cpp-investor.pdf

[@laed3520]

Waiting until age 70 to collect my CPP makes a lot of sense for me. Only 2 more months for me. Mmmmm, Steak and Rib dinners every month till age 100.

[@sherryl8155]

Is CPP a mandatory program?

[@wellbuiltwealth]

If you’re employed, then yes.

[@RobSnow-ui4sz]

Great video- My question is - Is the amount shown when you log in to CPP the amount you will get if you work to age 65 and continue to contribute to CPP?

[@wellbuiltwealth]

You can confirm with Service Canada (and you should) but in our experience, the estimates are based off of your contributions so far and do not include your potential future contributions.

[@brl6219]

I was wondering if you have a general view regarding delaying OAS if there is no risk of clawback. A lot of planners seem to recommend starting at 65 as the break even is over age 80 and there are no survivor benefits. On the other hand, there is a lower base for inflation increases and a lower 10% increase at age 75.

[@wellbuiltwealth]

I understand your points for sure. However, it totally depends on your situation and your other sources of income. Most people I find are far more interested in delaying CPP than OAS (as the perks are more significant) and very few are interested in delaying both.

[@Andrew21882]

The question is however: how are both benefits going to be affected once UBI is implemented. There’s a lot of signs that it’s going to happen at some point and most people have no clue of it.

[@wellbuiltwealth]

Yeah, we’ll see how this plays out…

[@motoarzan791]

UBI would be the best thing to ever happen. Imagine all the government savings completely eradicating every single department that hands out money like welfare, EI Employment insurance, CPP, OAS, guaranteed basic income supplement, child tax credits, baby bonus, and any other top up's, tax credits or payouts such as covid benefits, energy rebates ect.... Everyone at age 18 gets lets say $25k. How it would work is if you make $30k at McDonalds...McDonalds pays the government the first $25k of your earnings, and then pays you directly the $5k balance. The government then reimburses you that $25k ($2083/mth). The guy who earns $100k gets $75k from his employers and the other $25k goes to the government and then back to you $2083/mth. So how do you come up with all the extra money for the people who don't earn the $25k like a stay at home mom or some lazy person....all the money saved from having ZERO government programs listed above. that is billions and billions. The key is the current system creates a "ceiling" and make people not want to make and earn more. UBI cr4eats a "floor" where the skies the limit. People get their $25k so they don't go homeless and hungry but they can then earn an unlimited amount extra without any clapback's.

[@James_48]

I strongly suspect that UBI, if it happens, and I am in favour of it, will be maintained outside of OAS and CPP and be more like EI. We already have a UBI concept for retirees in the form of GIS, so it seems most likely a separate plan would be developed for pre-retirees.

[@kennordsfan1494]

I dont think UBI will ever happen. With a cost of 84 billion a a year? What is going to disappear to have this be implemented? No welfare? EI? Then what abut CPP if you are getting UBI then how would be able for CPP when you dont pay into it? I cant see that happening CERB was bad enough who would work then?

[@kennordsfan1494]

@@James_48Why would you be eligible for CPP then? You wouldnt pay into it. UBI is a pipe dream that I dont support unless other programs are removed. Child benefit, EI Disability.

[@sunsetson2209]

Can one still draw or defer CPP if they are already drawing CPPD (Disability) until age 65? What about OAS?

[@kriskafowlski4463]

Thanks Rhys. I could only wish that I didn’t qualify for OAS. Ha. Although I am only 63 there is no chance of clawback. Although It Does seem like the clawback starting at around 90k and ending at 135k seem too high to me. Especially compared to the clawbacks for GIS starting at much lower income levels for people that could use the money more. I would be more than happy to forfeit my 750 a month if I had a retirement income of 135k plus. If I was King I would drop the OAS down and increase the GIS

[@wellbuiltwealth]

Maybe you should run for king :)

[@KevinBaggs]

Question about cpp. If someone is not at the max. But collects at 65 and continues to to work. Would they continue to controbute from their earnings and the max cpp payment would get adjusted up?

[@wellbuiltwealth]

Contributions between age 65 and 70 are optional if you’re still working. Any additional contributions will increase your benefit.

[@henryhunter5419]

Thanks for another great video. I do have a question about CPP indexing. Does the CPP indexing increase the payment by the same percentage whether you have taken it or not? In other words, if an individual receives a 6% CPP increase in their payment due to indexing, would the overall CPP maximum payout increase by the same 6% for those who have not yet taken CPP?

[@wellbuiltwealth]

Good question! Answer is yes. The benefit amount is always being indexed whether receiving currently or not yet.

[@henryhunter5419]

@@wellbuiltwealth Thanks for the quick reply. So, if I understand correctly, if the maximum CPP at 65 is currently roughly $1300 per month and, if the indexing generated an annual 5% increase, the maximum payout would be about $1659 by the time I hit 70. In that scenario, if one defers CPP until 70, they would receive 42% more than the $1659 or roughly $2356 vs. the $1659 someone would receive in that same year if they started CPP 5 years earlier at 65, is that correct? Thanks again, and I apologize if it is an obvious common knowledge question.

[@wellbuiltwealth]

@@henryhunter5419 No worries. If I understand what you are asking correctly, then yes. However, the person who started their CPP at 65 would also get annual indexing. Basically, CPP is indexed every year. Any delaying you choose to do would give you increases above and beyond the inflation indexing. Cheers

[@laed3520]

Hi Henry, the person who takes their CPP at age 65 would receive the CPI increase offered by CPP each year. But if you waited 5 more years than him, your increase over and above the 42% would be based on wage inflation which shows up in the change in YMPE each year. The YMPE's, last 5 year average, is the 3rd most important factor, after your years of contributions and amount of contributions made, in the formula used to calculate your CPP. This 5 year average is used to calculate your initial CPP ( the year you start your CPP), then every year after, you are like the other guy and you get the CPI inflation increase offered by CPP but you will have a larger base due to waiting, so every year your CPI increase would be higher than his, even if all other factors were the same. It's a bit of a roll of the dice because the YMPE and the CPI do not always follow each other. For example for my 5 year YMPE average (2020 to 2024) CPI increased CPP by 1.84%, 2.42%, 3.46%, 3.86% & 3.80% whereas the YMPE increased by 2.3%, 4.9%, 5.4%, 2.6% & 2.9%. So you see it varies. If I had taken my CPP at age 65 I would have received $1,071.17 per month but by waiting the extra 5 years till Jan 2024, I will receive $1,749.53. Had I taken my CPP at age 65 in Jan 2019, my Jan 2024 monthly CPP would only be $1,246.23 due to the CPI increases. The difference is only 40.39%. I'm giving up 0.7% because my birthday is in Jan and I would have to wait to start in Feb to get the full 42%, so my number would have been 41.09% & Not the 42% because my 65 year old self would have benefited slightly more from the CPI inflation than I will from the YMPE wage inflation. But like I said it's a roll of the dice. Life is like a box of chocolates. You don't always know what you are going to get. 😒 But I am very happy to have waited. That initial $503.30 extra per month will buy a lot of nice dinners out. In 2032 at age 78, I will surpass all the extra money that my 65 year old self would have received due to starting his CPP at age 65. My calculations show that at age 100 ( doable for me), My CPP will accumulate an additional $188,325 by waiting until age 70 over me taking CPP at age 65 assuming a 2% (CPI) Cost of Living increase each year after Jan 2024. If inflation is higher than 2% over the 30 years, then the gains will be even greater. I Hope this helps. Cheers LE.

[@James_48]

@Well Built Wealth I’ve always wondered if those average amounts quoted for what CPP recipients are receiving are inclusive of those that took CPP prior to age 65. If so, the numbers sort of appear skewed. I wonder if there is a figure for what the average would be IF everyone HAD waited until age 65?

[@wellbuiltwealth]

That's an interesting insight. And I've never even thought of it before. I'm sure there's data on that somewhere but I haven't seen it. If you find it, please share!

[@James_48]

@@wellbuiltwealthperhaps a better comparison would be the ‘max’ at the average age that CPP recipients opt to take their CPP. For instance, if the average age to start CPP is 63 years old then compare that value with the max, with a 14.2% discount (as an example). I don’t know is this data is available either. Just something to think about. I think too many people look at the avg and believe if they get more than that - great - but I personally believe many CPP recipients take it early to their detriment.

[@josephkeith6954]

Got a question - say Dan decided to delay CPP to 70. But he passed away at 68, will his wife get survival CPP from Dan? If not (since Dan has not started collecting CPP), it’s a big downside to delaying CPP. Thanks.

[@wellbuiltwealth]

She would definitely get the survivor benefit. Even if he hadn’t started his.

[@josephkeith6954]

@@wellbuiltwealth thanks for the quick reply. the system is fair sometimes :)

[@wellbuiltwealth]

Here’s a vid I did on exactly that topic: kzbin.info/www/bejne/naqxiaathaiArM0si=0rr0IZc4B_wzPcZN

[@josephkeith6954]

@@wellbuiltwealth thanks bro. I didn’t get it from the vid if you mention the same scenario. A “follow up” question I have is what if there’s a huge age gap. Say Dan was 68 but has not started collecting CPP and his wife is 55. What then? :) can she still get survival CPP and when?

[@cathywalker9924]

Just want to be sure I understood correctly - if someone qualifies for the full CPP benefit but is still working past age 65 and not collecting CPP yet, there is zero benefit to continue CPP contributions. Is that correct?

[@wellbuiltwealth]

Sorry, that is not correct. Continuing to contribute will add to your benefit. It’s just that it’s not mandatory after age 65.

[@gruff4036]

I thought the max anyone could receive was full benefit? Are you saying I can receive more than the max by continuing to work once I have earned enough CPP credits to qualify for full CPP at age 65.@@wellbuiltwealth

[@TvThoshiba]

If do I stop to work at 55 there is no way to make a contribution to CPP?

[@wellbuiltwealth]

Nope

[@motoarzan791]

IT'S ALWAYS BEST TO Take CPP early if you've retired early and haven't been and won't be contributing for many years up until 60. ie. I retired at age 49 (now 51). There is no sense delaying CPP until 65 or 70. The higher amount of years not contributing to CPP is worse than the age 60 penalty and delaying it won't increase the over all payments. In the end it doesn't matter anyway, if one has the means to retire way early then CPP will likely just chump-change and as for as OAS I'd likely have every penny clawed back.

[@Andrew21882]

What about if you retire at 60, delay CPP till 65 and not contributing for these 5 years, are you still going to be penalized?

[@James_48]

@@Andrew21882this is what I’m doing but I’ll be retiring at 60 and deferring to age 70. Doug Runchey ran my numbers and because I have about 85% max contribution years there is not a significant difference as those five years will get counted in my drop out years. Much depends on what you CPP contributions looked like from age 18 to 25 ( as typically those are the years that get dropped).

[@brianxyz]

@@Andrew21882 It depends. They'll drop your eight lowest contributing years when calculating your benefit. As long as you don't have 4+ more "zero" years you wouldn't be impacted under your scenario.

[@ddavidson5]

@@brianxyz It does indeed depend. I retired at 61 and did not start CPP until age 70, and it wasn't a consideration, but as I had reached my years of max CPP contributions, contributing any longer to CPP would not have increased my CPP at all. I was already "maxed out".

[@ode6105]

Would it make more sense to recover what one has banked into the CPP plan in one lump sum? Especially that the government has been already been using the CPP fund without paying interest? What is the procedure for the heirs to recover the UNUSED CPP sum one has paid into the plan, and has deceased before age 60?

[@gruff4036]

How has the Gov been using the CPP fund?

[@pismomann]

im 63 on OAS GIS and all my money is accumulating tax free in rrsps and tfsa .... I pay no taxes on 48k, I and my wife commuted our pensions to rrsps

[@liverpool3469]

You don't pay any taxes on 48k, how?

[@gruff4036]

Income splitting and tax credits. In 2024 a 65 yo Alberta couple can make 53K combined and pay no tax. They have personal exemption, age credit and pension credit X 2@@liverpool3469

[@ddavidson5]

@@liverpool3469 At age 63 I don't know how he can get OAS/GIS as you can't claim either until age 65. If they were age 65 then it's possible their OAS income alone is too low to accrue any tax owing and GIS is a tax free benefit. GIS pretty much insures that you have an income of about $24K a year or thereabout (I am not fully versed in the GIS rules and it's different for individuals versus couples). If he and his wife are over 65 and are claiming OAS/GIS individually with no other taxable income then there's the tax free $48K.

[@ode6105]

And as you delay receiving OAS till 70, you also don't qualify gor GIS until 70.😂

[@liverpool3469]

What! You have a goatee?? 😳

[@wellbuiltwealth]

Nope! It’s a chin wig.

[@liverpool3469]

@@wellbuiltwealth I shave clean once in every two weeks. My wife tells me I look 10 years younger!

[@wellbuiltwealth]

For the win!

[@ghostflight73]

So if someone retires at 60 or 62 but doesnt want to start taking CPP, wishing to delay until 70, do they need to keep contributing? Just trying to maximize what I can take out, but not put in more than I need so dont know where to learn about the 60-70 period where I might work a bit, but dont want any CPP out, but dont wish to add much. Any resources that make this clear, or shows options?

[@wellbuiltwealth]

You bet: kzbin.info/www/bejne/p2SvoISdd8xqY6ssi=F3mEJ44D36O7abVt

[@rizacatabui2115]

@wellbuiltwealth hello