A Solid 33 Minutes of CPP Knowledge Every Canadian Should Know

[@Richard-ht1qk]

Invaluable information. Required listening/viewing for every 55 year old Canadian.

[@ParallelWealth]

Thanks

[@DavidRedpath-s7v]

I would say required for every Canadian starting work.

[@dvdvno]

Simple rule of thumb: if you stop being deducted for CPP or EI premiums at any time during the year, you have made the max contribution to CPP for that year. Took my CPP at 60, continued to work til 65. With the Post-Retirement benefit, I didn't lose the whole 36% in 5 years. I did use the money to buy my very first new vehicle and pay off debt that was higher than 7.2% interest. Everyone is different.

[@jrock1724]

HEY, I'm a fairly long way away from retirement. But i love these videos. So much information on your channel!

[@James_48]

The PWL site is extremely empowering and really does a great job of removing the guess work for near retirees. 2-3 years to go Adam!

[@dominiquetheeasyminimalist]

This calculator is amazing, thank you so much for sharing it! It's eye opening, and it can change drastically when you decrease or increase the life expectancy.

[@ronwiebe4816]

Very well laid out - So many people need this

[@ParallelWealth]

Thanks Ron. Merry Christmas to you and the family.

[@SummitMan165]

Very good stuff ! Excellent épisode ! Thanks for your good works !

[@ParallelWealth]

Our pleasure!

[@moehashmi]

Thank you for this

[@FeydHarkon666]

We love you man, Happy New Year

[@ParallelWealth]

Happy new year! And many thanks.

[@SlickSydney]

Very informative. I found you at the perfect time. This is the year I make all these decisions. Thank you.

[@ns123]

Great informational video, thank you

[@RajSingh-ns6bc]

Great video, as always.

[@OptimisticHominid]

Adam, at 6:38 you say "when we look at the difference between CPP at 60 and 65 it was around $2,500 a month". I think you meant $2,500 a year, and I think that's the difference between 60 and 70.

[@nickstark8479]

Everyone's numbers will be different... But generally, receiving at 60, 65 and 70 would net you 64%, 100% and 142% of your potential CPP payments. So waiting until 65 is a 1.56X increase while waiting to 70 is a 2.22x increase compared to receiving at 60. Meaning a difference between 60 and 70 being 2500 per year is unlikely, since receiving $2000 vs $4500 per year respectively is well bellow the average yearly payments.

[@garth217]

​@nickstark8479 he was making a point that Adam misspoke. Most people knew that

[@DoneByD]

@@nickstark8479 The $2,547 a year difference is the total amount of real dollars extra per year you get by deferring to age 70. You get this higher total annual real dollar retirement income amount by using your savings at a higher rate earlier in life and then also getting a higher CPP benefit later in life relying less on your retirement savings at that time. It's an increase in real dollar annual spend for your entire retirement period to RIP date (in this case from age 60 - 90).

[@heidilevens6284]

Great presentation on CPP. Do you know if it’s possible to pay “make up years” if some years were missed? Thank you!

[@James_48]

It is not possible to purchase or otherwise make up for years of no CPP contributions

[@heidilevens6284]

@ thank you for responding. Good to know.

[@ParallelWealth]

No you cant

[@heidilevens6284]

@@ParallelWealth Thank you! 🙏

[@nadmak9093]

I have been on disability since 2016... and hence have not contributed. Does that mean I will have a huge penalty come age 65 when my CPP disability ends? I was contributing the max for 17 years before getting ill. Or will my CPP benefits be roughly the same I am getting right now?

[@katethegardener]

Good question, I would like to know this too.

[@rabbiddog]

Fundamentally, they can not penalize you for not contributing during your disability because you couldn't work. That would be discrimination based on disability.

[@James_48]

The PWL calculator will utilize disability periods (that can be configured) to do the calculation.

[@grantwatkins2898]

When delaying to 70, do you apply to start as of the 70th birthday month? Or, the month after, which is the payout date?

[@ParallelWealth]

You could start either, but usually month after

[@bkgdnoize111]

Would have liked some info about cpp credit splitting for divorcees and how can we reflect split credits in the cpp calculator?

[@ParallelWealth]

Current calc doesn't have it built in yet.

[@yvonnevandenberg7606]

Adam, first off all, thankyou for all your information. My husband and I both plan to wait until age 70 for CPP. However, I have one question. My benefit will only be 60% and my spouse 100%. If he were to pass early I would be bumped up to his age 65 amount; if i were to pass early, he would not receive a bump up as he is at the max. Would it be beneficial for me to take my CPP at 60 or 65 in this case? I have made some rudimentary spreadsheets that would still lean to both delaying to age 70. Please advise.

[@ParallelWealth]

Usually not. Worth having your planner run for you though

[@bboyda4399]

What if you retire at 55? Extra info. Receiving private pension with bridging and have enough rrsp to cover 65 to 70.

[@OptimisticHominid]

Adam, in the example, I can see that inflation is 2% and portfolio gain is 5%, but what is the target estate value at age 90? Thanks

[@claudia-vp1kd]

Can you do one for immigrants? I came here and just working 20 years, do I still have those years deducted, even if my kids were Born before I emigrated here? Thank you

[@annashulman4717]

Second that. I am an immigrant too, only working from 2007. My future numbers of CPP аnd OAS will be so small it's depressing. My RRSP and TFSA are minimal. I couldn't save more, we had to support our children as a first priority. I have to downsize to at least to get rid of mortgage, but my retirement concers me.

[@dantremblay3180]

Love the Channel Adam, i've learned so much. I was just curious, I have been paying the maximum CPP for a number of years now and as of last year, started CPP2 the full amount. I have 9 years left to work of which I will be paying the maximum CPP and CPP2. Will CPP2 make that much of a difference? Do those who pay CPP2 get more? Thanks,

[@ParallelWealth]

Yes it will boost the final payout

[@JakeNorth24]

Could you please do an updated video about OAS and GIS? How to qualify and when to begin collecting. Are these sustainable or are they dependent upon the current political environment at that time? Much appreciated Adam and team! 😊

[@lw1405]

Did you not listen to his video in full? At 15:20 he talks about sustainability-- oops....apologies to the poster I replied to. Clearly I wasn't paying attention to what he was asking!

[@brianxyz]

@@lw1405 Video deals with CPP not OAS and GIS.

[@JakeNorth24]

@@brianxyz Thank you!😊

[@lw1405]

@@brianxyz Thanks for that Brian-I edited my reply.

[@vhateverlie]

Any chance you'll have a comprehensive video on the CPP2 for those of us going to retire in 30 years 😅

[@ParallelWealth]

Coming soon

[@OptimisticHominid]

My personal preference is to look at money in today's value. That way, I have a better idea of what I'm truly gaining. My spreadsheet tells me that if I delay CPP from age 62 to age 70 (with 2.5% inflation and a 6.43% portfolio gain), our estate at age 90 will be $86,231 higher. However, if I adjust to today's value, it's just $43,436. There is an added twist because I use a dynamic portfolio gain: the early CPP payments allow me to have a slightly more aggressive portfolio (the fixed income is set at what I need, not at a percentage). The end result is that delaying CPP from age 62 to age 70 increases our estate value by $32,312 at age 90. So, that's how much I'm playing with when trying to decide when to start. Note: I have many non-contributory years, I'm also on the boundary of the next tax bracket up, a higher CPP will bleed into that higher tax bracket vs drawing from my TFSA. A higher CPP also reduces the Age Amount tax credits.

[@ParallelWealth]

100% agree. Always inflate, but look at nominal dollars

[@mikellock]

I really enjoy your videos… I’m 52 and left Canada at 40 for the USA. I’m now starting to look ahead and your videos are helpful to at least point me in the direction of questions to ask. Does Parallel Wealth help with people like me who have retirement saving in Canada, but have “new” lives in the USA?

[@ParallelWealth]

We would recommend a US based advisor if you plan to retire there.

[@MorzhSD]

Try retire mitten he has some videos on transborder situations

[@annashulman4717]

Will I get more $$ by taking CPP at 65 vs 60 if I retire at 60, therefore won't actually contribute for those 5 years? Are those 5 years into 7-8 non contributory years?

[@James_48]

Yes, the years from 60-65 will count as non-contributory years. But, in many cases, one will still benefit from deferring CPP beyond 60, all the way to 65 or later. This is especially true if one contributed the CPP maximum in the majority of their working years before age 60.

[@Backtoreality1873]

I’m retiring at 55 and the numbers don’t make sense to delay taking CPP. I’ll be calling it at 60.

[@donovjo]

If I retire at 65 but delay my CPP to 70 do I pay into CPP between 65-70? I’m currently self employed

[@RichardSadlowski]

I retired in August can I still do fianacal planning

[@ParallelWealth]

Of course. Many hire us well into retirement. Never too late to pay less taxes!

[@JeanVeuPu]

If i understand good , i am 66 still working , expecting to work until 70 , i still paying CPP and maximize contribution each year until 70 i ´d pay maximum for 39 years , i better stop paying because i will not get more $ from it ? And should i began to collect CPP or wait until 70 when i retired ?

[@YvonBolduc_Tip007]

Yes, only for 39 years @ max contribution.

[@ddavidson5]

As I understand it once you are past age 65 and still working you don't have to keep paying into CPP if you don't want to. As far as I know you don't have to start your CPP then, you can still defer which, if you are still working, is probably a good idea but you'd have to run the numbers. If by age 65 you already have your 39 years at maximum CPP contributions then there's no reason to keep on contributing even if you are still working.

[@phil6926]

I’m not sure how any other calculator would be more accurate than Service Canadas. It gives your benefits at 60, 65, and 70 based on their record or your contributions. Am I missing something? Please let me know.

[@davecarpenter4917]

Service Canada does some assumptions into the future that you cant change. With the PWL calculator, you can specify future income . Also, the PWL lets you make a scenario where you start CPP (at say 60) and then continue working (starts to add PRB funds into CPP). You can also adjust CPI and wage growth (which affects YMPE, which affects how much CPP you get when you start CPP).

[@James_48]

In addition to what Dave said, if one stayed at home to care for children there are additional drop out years that get considered. The PWL calendar has a tool to configure this. Service Canada does not consider this when posting the amounts.

[@Backtoreality1873]

Service Canada has no idea about your personal situation. Kind of a theme with this government.

[@DoneByD]

@@James_48 the PWL calculator does let you put in dates for children however it doesn't let you share those years between the 2 parents. So the calculator CRDO provision is definitely useful in some case but certainly not all cases. In our case my wife would claim some of the CRDO years and I would claim others so this calculator does have limited use (unless I just didn't see the option to select only certain years for CRDO). Doug Runchey might be the best option in these cases still.

[@phil6926]

For our situation it’s not that complicated. We “retired” at 60 and have lived off savings/RRSP’s and my wife’s “bridge” pension since. Our only concern is when to start CPP and or OAS, I’m turning 65 in 2025

[@lw1405]

Wow- I get three different numbers for taking CPP at 70 using the 3 calculators. On the CRA account, $1519, Doug's site, $2056 and PWC's site, $2372. I'll take Ben's calculations. But that's a very big swing. What do I believe?

[@murraytown4]

The only number that matters is that from the Government.

[@brianxyz]

@@murraytown4 That's not true. Service Canada's estimates are the worst as they assume what you've made in the past, on average, is what you'll make in the future which is not always true. PWL's figures are higher as they take inflation into consideration.

[@murraytown4]

@@brianxyz the Government is the one paying your CPP benefits, not some random company. It will pay according to its data. It’s like taxes. H&R block may prepare your taxes but CRA will tell you how much you have to pay or are refunded.

[@brianxyz]

@@murraytown4 Those are estimates on Service Canada's website. Doug Runchey worked for them for 30+ years and has written numerous times that those estimates are garbage useless you're very close to retirement.

[@James_48]

I think the PWC site takes projected wage inflation into account as well.

[@teenidol18]

Might skip this one. Can you talk about OAS? Would be really valuable to have information on that.

[@ParallelWealth]

Many videos on OAS ..and many more to come!

[@Roof_Pizza]

My understanding is that you can delay taking CPP and collect GIS if applicable, is this true?

[@ParallelWealth]

GIS is tied to OAS. So yes, you could delat CPP and collect GIS if eligible.

[@Roof_Pizza]

@@ParallelWealth Thanks for confirming for me.

[@johnwillock6787]

One thing I never see it, is that if the calculation of inflation is 2.5 percent you need to take that into consideration in the overall numbers in the timing. The actual growth in truth would just be 4.5 percent correct? Of course it’s only one number in the total calculation.

[@James_48]

When deferring CPP past age 65 you not only get the 7.2% boost, but also the increase in wage inflation - so you get both increases.

[@roberttaylor3594]

Hard to imagine I'll be taking CPP before 65, but probably not 70

[@gmac2249]

if I die before i collect CPP what does my spouse get?

[@dragonfly1146]

Survivors Pension, Death Benefit (1 time only) Google it

[@James_48]

Yes, your spouse would receive a spousal benefit based on your contribution history.

[@MegsCarpentry-lovedogs]

Well, I received a letter that stated that I was dead as of Sept, 2024! I called and it was to be sorted however it is not. How could they confirm that I was dead? There was no death certificate in sight. Just the heads up in case anyone else had this issue. :) Meg, chiming in East Canada.

[@OptimisticHominid]

"I received a letter that stated that I was dead as of Sept, 2024!" Well done, you're living proof of life after death!

[@ramspace]

Hi Adam, Please mention that QPP can be delayed until 72.

[@jameserskine9980]

The required return at 60 is 11%. 64% × 1364 = 873, 7.2% × 1364 = 97, 97 ÷ 873 = 11%. Each year delayed decreases the percentage return because the denominator increases by $97. Take early to invest debunked, mostly.

[@fredhooshi4294]

can hardly manage my daily expenses

[@xgmbx3468]

ROI for watching this type of content has exponential returns. Yet no one has enough patience or attention span to do it. 🤷

[@ParallelWealth]

Average watch time currently 6-7 mins. Missing a LOT of great free education.

[@xgmbx3468]

@ParallelWealth I'm 42 and I would be hard pressed to find even 5 people that would actually listen to even 5 minutes of this video. Financial planning has never been more important but people think we can still just exchange time for money forever. Not good.

[@richardmichael59]

Your math has me confused. Comparing from age 60 to age 70 your increase in CPP should be 79% . How does that only amount to an increase of $200 a month? If he is getting $9000 a year at 60, with the percentage of increases yearly if he waits he would receive $16,100 a year at 70. That’s $591 more a month. Once again I am confused on your calculations. What am I missing?

[@James_48]

It isn’t a 79% difference. If say, you would receive $1,000 / month at 65 you would receive $640 (36% less) at age 60. If you defer to age 70, instead of $1,000 you would receive 42% more, or $1,420. $1,420 is about 120% more than $640.

[@garth217]

​@James_48 if you win the lottery, what percentage is that?

[@pablopiquante3227]

How long we live is really the wild card in the planning process. I thought mortality tables had average lifespan guesses of about 82, not 90. Also, what about factors in our current lifestyle that reduce our lifespans like stress, unhealthy relationships, unnatural chemicals in our food, air, and body (those we take voluntarily and those coerced upon us by the government). Unless we can invert those factors, we may not even make it to 82! And when do we really need the money and are going to use it? If we take care of ourselves and are lucky enough to still be living in our 80's, not just alive, we will be in our slow-go/no-go years. Will we actually get to enjoy our CPP or will it just go to our bank accounts, taxes and our heirs? Everyone has a different situation so please make a decision with as much information as possible.

[@johnnyv5995]

100% agree. Waiting until 65-70 to have an extra $200/month while emptying your own 'bank account' makes no sense to me - especially when you consider that once you pass away your spouse gets next to nothing from your CPP. In my case taking it at 60 will allow me to finance my travels while I'm still hopefully healthy & able.

[@OptimisticHominid]

"those coerced upon us by the government" That's funny!

[@dvdvno]

Very good real life analysis.

[@svenhodaka9145]

Exactly, retirement financial planning is not an exact science! The challenge is creating an equation to solve for about 25 (or more) variables. Just be reasonable about your choices and best wishes to you.😁

[@ParallelWealth]

Life expectancy for a 60-65 in North America is late 80s. If you are a couple there is better than 50% chance one lives in 90s

[@Montrealmum]

Wish someone could do this for the QPP😢

[@dominiquetheeasyminimalist]

It's similar overall, and the calculator can be used for QPP

[@Backtoreality1873]

Retiring early in your early mid fifties? You’ll be taking your CPP at 60 if you’ve done the math.

[@ParallelWealth]

If you have done the math, likely not. We do plans for this scenario weekly and would rarely make sense financially. More of an emotional decision if taking early.

[@DoneByD]

Sorry disagree... The CPP timing decision isn't just about the math, it's how the decision fits into your overall financial plan as well as the way you value whatever it is you want to get out of CPP and your retirement... The math, as Adam and many others, have demonstrated generally pays off to wait to 70 if you are expecting to live past 85ish. This of course means you are measuring the total cumulative lifetime benefit received as your most important goal. There are good reasons to take CPP earlier than 65 and there are good reasons to delay to 70. It's just depends upon how those reasons resonate with you and which ones fit best to your overall situation.

[@garth217]

Things to think about timing of CPP OAS clawback Having to live off your RRSP and being left with little or none of your own money at 70 Delay means you have little or none RRSPs to pass to a surviving spouse. CPP survivors benefit is a small fraction of your CPP and is based on the amount at age 65 not what you get at 70 if you Delay. I took CPP at 61 because I retired the first time at 54..non contribution years kicked in. Im putting my CPP into my TFSA and high interest savings account.

[@ParallelWealth]

This is the biggest decision you will make around CPP - financial versus emotional. As long as your plan still allows you to meet financial needs and goals then all good. Too many take it early and can't enjoy retirement financially the way they could have.

[@garth217]

​@ParallelWealth delaying CPP works for many people because as you say its guaranteed money indexed to inflation. Im lucky to have a pension that does the same. I can't aggressively meltdown my RRSPs because of taxes then OAS clawback. My RRSP withdrawals will last until 85 or more if i based my withdrawals on the additional income i would have got if i delay my CPP until 70...but im getting that money NOW , why wait 9 years ? That extra money in my TFSA sounds better to me. That pushes my breakeven point to 79 and ill still have 15 years worth of RRSPs left. Thanks for keeping us informed and up to date.

[@kc218]

CPP for immigrants to Canada would be interesting…. There are a lot of us!

[@jillybean6604]

trying working in canada for 40 years and then ask again.

[@murraytown4]

CPP is for all Canadians, regardless of origins.

[@DoneByD]

Should have watched the video - CPP is for anyone as long as you've made at least one contribution to the plan...

[@heidilevens6284]

It’s a good question. I came to Canada 17 years ago. It would be interesting to know if it’s possible to pay make up years. I have paid in to other countries systems, so that will add on at retirement too.

[@DoReMeaCulpa]

​@@heidilevens6284No, you cannot pay "make up years". Geez, especially since you say you have pensions from other countries, don't be so greedy.

[@angelocardoc]

Most people die after age 55. I'm retiring early and spending my kids inheritance. FTS working like a slave.

[@DoneByD]

When comparing lifetime cumulative increased CPP benefit why does that amount always reflect the nominal dollar amount? Your example states increased income in real dollars for delaying goes up by $2,547/year if you wait till 70 to start CPP. So a person will be collecting the $2,547 in real dollar terms for 30 years (Age 60 - 90) the lifetime cumulative dollar effect of delaying for 10 years (age 60 to age 70) is really $76,410 (in real dollar purchasing power terms). By changing to nominal dollars I believe the example artificially inflates the cumulative lifetime dollar amount benefit because a user is thinking in real dollar terms (todays dollars) yet the $119,000 (nominal dollars) can only buy goods or services in todays dollars to the $76,410 point over the next 30 years. Because of this, I feel the $119,000 figure is really irrelevant in the discussion. Am I missing something?

[@OptimisticHominid]

No you're not missing anything. It's my view too that we should be looking at the value in today's dollars. See my comment about 6 hours after yours.

[@GoodTimeCatchers]

7% is a pretty easy yearly gain. And it’s then ensured you’ve gotten your money vs potentially dieing and getting nothing before age 70.

[@ParallelWealth]

But 7% would leave you far behind delaying CPP. We have another video showing the break even is closer to 13%

[@RajSingh-ns6bc]

One question no one answers. Does the CPP payout increase if someone contributes more than 39 maximum years? For example. 1986 age 18 to 2025 at age 57 someone contributes the maximum amount into CPP every year for 39 years. If they work any additional years past 39 and contribute more maximum years.

[@YvonBolduc_Tip007]

Only the best 39 years, if more years @ max contribution, no change since you have achieved the max payout

[@RajSingh-ns6bc]

Thank you. That was my understanding also. I will have to run a few different scenarios through the CPP calculator.

[@RajSingh-ns6bc]

Are the 8 dropout years mandatory? What if someone has 13 partial years and 34 maximum years. With 8 dropout years that still leaves 5 partial years. Can some of the 8 dropout contributions top up the 5 partial years remaining to achieve 39 maximum years?

[@James_48]

⁠@@RajSingh-ns6bc No, it doesn’t work that way. The dropout years will be the years with the least amount of CPP contributions, including whole or partial years when one did not work, or worked part time.

[@RajSingh-ns6bc]

Thank you. After doing some research, I found that out. I used the CPP calculator with my particular contribution scenario and have come to the conclusion that even if I work to 65 and and have maximum contributions moving forward which I will, I will be $45/month short of my possible maximum if I had 39 years of maximum at age 65.

[@Dom.Perignon123]

i think i figured it out.... put your disability/child years first before putting zeroes for those years