Deferring CPP makes NO sense!

[@Tylerjames-v7m]

I’m worried about retirement planning and I want to ensure a comfortable future. I’ve worked hard my entire life and I want to enjoy the fruits of my labor without financial stress. I’m really concerned about whether I’ve saved enough and invested wisely.

[@DiegoVelasquez-r3x]

I completely understand. Ensuring financial security in retirement is crucial. Have you considered consulting a financial advisor?

[@Tylerjames-v7m]

Yes I have. But I don’t know who exactly to trust to provide the right advices and guidance for me.

[@MikeHollow-rz5dl]

True. I have been in contact with a CFA that specializes in retirement planning. His expertise can help optimize your savings and investments.

[@Tylerjames-v7m]

Who’s this CFA? And how can I reach out to him?

[@MikeHollow-rz5dl]

JOSEPH NICK CAHILL

[@jonl559]

You missed a big part of the advantage of delaying CPP. CPP IS INDEXED FOR INFLATION. The larger the payout, the greater the increase over time that inflation adds to your CPP payment. Many pensions and investments are not indexed for inflation.

[@dkchef]

And the tax hit I will taking when I take the CPP earlier while still having an income, and/or not splitting pension.

[@garth217]

My Pension is indexed that why I took CPP at 61, so I would not be clawed back with my OAS

[@garth217]

​@@dkchefI split my pension

[@MrXR77]

I retired at 60, and my only income from 60 to 66 will be the meltdown of my RRSPs each year. From 66 to 70, my only income will be OAS ($618) + the full supplement ($1072) + TFSA if needed. Your RRSP is not your friend at retirement time, and if you take CPP at 60, that little amount will stay the same for the rest of your life. Unfortunately, most people spend more time planning their summer vacation than their retirement.

[@danag812]

This is a very good point. One must always be aware of tax implications. Your scenario shows how individualized this decision is. Enjoy your retirement!🎉

[@parkerbohnn]

Some have to take CPP early to avoid getting clawed back on their OAS at age 65

[@colinmagee5155]

Exactly. Found this video to simplistic in it's message. There are so many things to take into account like taxes, income sources, laddered income, etc. In some cases, you just NEED the money or have a lower life expectancy, so take it early. But if have any of pension, rsp, tfsa, lira, etc, EVERY scenario I've seen of retiring at 60 doing RSP meltdown and collecting OAS at 65 and CPP at 65 or 70 gives MORE AFTER TAX income per year from 60 onwards

[@macdaddymgiarc]

@@parkerbohnn I will have to take CPP later, so that I can get as much OAS from 65-70. It will be clawed back once I start getting my CPP.

[@macdaddymgiarc]

@@colinmagee5155 100% this is a terrible video for convincing people there is only one way to do it. It is a multidimensional problem and this video only looked at one dimension. There is no one-right answer. The video did not emphasize this but pushed the early narrative only....

[@lynnrush7166]

If you leave a lot of money in a RRSP when you die (because you have not been taking it out) your estate will be paying a large tax bill. This could mean you got less from CPP when younger and then paid more back to the government when you die. Everyone needs to do the math for their individual situation.

[@lorettakoch7408]

My mother sits on millions as she never took out enough. We will pay Over $250,000 taxes on her estate

[@IKTGWIW]

@@lorettakoch7408 If the RRSP has $1 million when the person dies, the tax will be around half a million dollars.

[@paulb9156]

RRSPs should be rolled over to a family member’s RRSP to defer the taxes.

[@lynnrush7166]

@@paulb9156 Works if you are married, but not if you are single.

[@GreggGordon]

@@paulb9156 They are rolled over to the spouse. Beyond that, why should they roll over once both have passed? RRSPs have always been about deferring tax.. you went into it agreeing that you'd eventually pay that tax. It's up to you to be smart about when you pay it to minimize the tax owing. But since you got away with no tax when it was earned, you do need to eventually have it as part of yoru income.

[@RBittante-p3p]

There are tax brackets to consider. You have to have start withdrawing at 70 and deplete by 90. The reason why you withdraw pension first because you want to reduce the tax bracket. You will be paying the government more tax.

[@vzeq24]

It does not make any sense to take CPP at 60 when you have a large sum in RRSP. First, you have to withdraw your RRSP money (as much as possible as fast as you can). I'm not saying to spend them. So, you better defer CPP and OAS in this situation and live out RRSP money. One size does not fit anyone.

[@samspade1841]

There are a lot of factors that go into when to take CPP. One important factor to consider to delay to 70 is the 42% increase in those benefits. With the CPP inflation adjusted it will be higher than 42%! Another reason to delay when to take CPP is the guaranteed higher monthly income for the rest of your life. I think your video missed a lot of points about the benefits of delaying. I have met so many seniors who have told me they wished they had waited. And so many regret taking it early. Again this is dependent on a number of factors but in my cae I will draw down my registered accounts and delay until 70 for the guaranteed higher income for the rest of my life. And for those who ask what I think if I die early. Who cares, I’m dead. And with my registered accounts lower my estate won’t lose as much to taxes. Everyone has to look at their personal situation and decide. Too many just take the money early and regret it later

[@williamleakey2720]

If you die at 71 you have lost a lot of money, and you are spending your money instead of the governments. If you have a spouse it is better to leave her the money in a RRSP or RRIF, insteam of increased spousal benifits.

[@KeithHanlan]

​If you are betting that you will die at 71, your health must be very poor. If you reach 65, your life expectancy in Canada is approximately 85. 60% survivor cpp based on a deferred 1.42 multiplier is 85% of the nominal pension and 115% of the pension started at age 60.

[@samspade1841]

@@williamleakey2720I won’t care if I’m dead. But if I live into my 90’s I will be able to smile knowing I made a smart decision. Everyone I know who took it early regrets their decision

[@tristanblackwood1917]

Taking CPP early or late depends on a lot of factors. Talk to a financial planner before taking your CPP.

[@Imsosmrt1999]

As a former CFP, I sometimes wonder if I watch these videos out of some sort of masochistic impulse.

[@jasonricard5058]

Makes you scratch your head, eh? Imagine giving this blanket advice to our clients.

[@blackwatch7151]

This makes no sense. It doesn’t cost you $60,000 to wait until 65, it’s the same $108,000 and you get it over 14 years either way.

[@snowwhite2709]

If you are not working, or working PT, you likely are using your savings to supplement your income if you wait till 65.

[@elp2689]

I guess it just means that if you die at age 64 you got nothing from the government.

[@dt8787]

Agree. This guy doesn't make sense.

[@alexanderdeclercq982]

I just turned 60 and took my CPP now, one big reason is because i already have a fantastic federal military pension with indexing and a smaller PSPP (Public Service Pension Plan) also with indexing. My wife also get CPP & AOS. So i am sitting pretty as long as i have my health. Only been retired for about a week so far. I do not have RRSP i invested in GIC's and saving in my TFSA instead. All is good.

[@johnoa1146]

I am 73 I deferred CPP and OAS to the max., age 70. I continued working until age 71. Before "doing what I did", I sat down and read the opinions of the various belief cults. 1 - take CPP and OAS ASAP. 2 - take CPP and OAS at age 65. 3 - defer OAS and CPP to the max. I read about break even points etc. Totally unsure which way to go. Then the comment by someone cleared the arguments above off the table. He basically said, "if you can defer, do so to get the maximum payout so that you can have the most cash for living" (I am paraphrasing). He went onto say, "So what if you die before you reach the break even points... "Who cares, because at this point you are dead!" I loved it. I decided I wanted maximum retirement resources. **** This is the most important thing **** I worked, with good pay to age 71, Putting a few more years into my RRSP contributions. (Another deferral win). I still think it was the way to go! I liked my work, it paid well.

[@normjohnson4629]

Thanks for the advice. Thinking I will do the same. Just turned 60 so need to work another 11 years but my job is easy and pays good so why not. Cheers!

[@garmin1488]

As he said you didn't defer it , you didn't retire till 71, so you took it when you retired. At 71 you're lucky to live 10 more years. But you're lucky to have liked your job, most people don't after 35 years.

[@frankcentofanti9317]

Who wants to work that late in life no thanks

[@george1055]

@@frankcentofanti9317 exactly!!!

[@davidr9651]

@@frankcentofanti9317 When you make 200K per year, why not?

[@rb239rtr]

Fundamental math issue- you have to account for inflation with your expected earnings on the $60k, so you have to make much more than 6%. With historical inflation rates of 2-3%, you need to make around 8.5% to stay even, and you cannot have any down years. If you have a -20% year at 65, you run out of money at 80 years. If you have 3 Zero growth years at 61,62,62, you run out of money at 77. If you have one Zero year at 61, you run out of money at 82. At 70, if you have a minus 10% year, while all the others are plus 8.5 %, you run out of money at 84. You have to manage this 60k your entire life and be good at it to match CPP. Meanwhile, defering CPP and spending the 60k in the meantime is way easier to manage, and if you mess up badly, go back to work. How many of us average 8.5%, year after year. Not many. If your health is good or even middling, take the sure bet and defer your CPP.

[@James_48]

Great comment!

[@elbowstrike]

This sounds like the opinion of a financial management company that wants to collect their management fees for a lot more years.

[@James_48]

It sure does!

[@sunfun2010]

Everyone has different situations, me using up RRSP from 60 to 65 makes great sense full CPP at 65 is by far better.

[@marionsutcliffe1119]

Biggest risk in retirement is outliving your money. If you can manage it, deferring to 70 mitigates that risk. It also makes it possible to receive the GIS for 5 years starting at age 65.

[@Sola_Scriptura_1.618]

The only thing worse than outliving your money is not enjoying your retirement because you don't live long enough!

[@parkerbohnn]

The biggest risk is getting all your old age security clawed back and ending up in a nursing home.

[@parkerbohnn]

No one gets GIS evenb people on welfare make too much money to get GIS.

[@marionsutcliffe1119]

@@parkerbohnn If you are getting oas clawed back, you are doing ok. And old age care is pretty much a given, So better have a chunky cpp to help pay for it.

[@1966johnnywayne]

@@parkerbohnn Nursing homes are overwhelmingly female occupied, and as a single (divorced) male, I'm statistically more likely to die in my home (paid off) than being neglected, or even abused in a nursing home. I have several young nieces who work in long term care homes, and like so many young women today, openly espouse animosity towards older White males. They claim that their contempt for White men doesn't impact how they do their job, but I'm sure the reality is otherwise.

[@blairkinsman3477]

I want to add some more math .. same example my CPP is $1000 taking it at 60 means $640 .. I’m still working and I haven’t (and won’t) maxed out my lifetime RRSP .. if I plan to retire at 67 and I start taking it at 60, I will receive (640x12x7) $53.8k into my bank account .. but, throwing that $640 a month with 3% inflation increase at my 8% RRSP gives me $79.0k at age 67. Calculating the depletion of that $79.0k fund (same 8%) at $440 a month to make up the difference (360 inflates to 440) the $79k fund is permanently self sustaining (it actually increases to $83.8k over the next 8 years) so there is no break even - and my kids get to keep it when I’m gone

[@alhumphreys5784]

But you won’t get $640 in your bank account! You will deduct whatever your tax rate is off that because you are still working!

[@jasonricard5058]

Interesting video. Although he makes a small mention of this being case specific, it leans very heavily towards the “take cpp early”. I can tell you with absolute certainty having worked through many, many financial plans, that this is very case specific. The math being presented is telling a small fraction of the story. Bottom line is.. absolutely do not base your retirement plans on videos like this. Always, always work with a financial planner.

[@baconbutty1131]

Indeed, good call. Also, will taking CPP at 60 push you into a higher tax bracket? People should figure out tax implications before taking a government pension early.

[@GreggGordon]

@@baconbutty1131 Yep. My brother-in-law had he and his wife both toke CPP and OAS early, while he was still working. Not only did they get less monthly, but then they probably lost almost half of that reduced amount to taxes.

[@Grimenoughtomaketherobotcry]

If he was still working under 71, then he should have been contributing to his RRSP to defer his/their taxes. After 65, you can also income-split RRSP withdrawals if it helps with the tax burden. Also, if you collect CPP at 60 and continue working and contributing to CPP, your CPP is topped-up annually to reflect the previous year's contribution. This ends when you turn 65. It could also impact your tax situation, especially if you've neglected contributing to your RRSP or charitable contributions, and get bumped into a higher bracket.

[@tessiechanp]

Retired at 55. Is CPP good or bad? When to take it? From 1983 to 2020 Total CPP contribution's = 120,302.55 without any growth over 37 year's. For 2022 Maximum monthly pension at age 65 is $1,253.59 or 15,043.08 per year. 96 months or 8 years Needed to get back what was put in. $120,302.55 at 8% after 10 years I would get $20,464.67 annual dividend.

[@AngeloMantzios]

CPP is great. Take it at 60 and keep more of your money in your pocket! And congrats on the early retirement. That's awesome!

[@martik778]

Max contribution from 1983 to 2020 as an employee would be 56,675 so you'd get back your portion in about 4 years. 4% dividend is more realistic.

[@kevlar111]

This is terrible advice. Glad this is the first video of this guy I watched, I won’t waste time watching anymore.

[@HuplesCat]

Lol if you need it take it at 60. If you do t need it take it at 60 and invest it. Average age of death is 82. Sure if you take it at 70 and live to 119 you get way more than taking it at 60 but….

[@kevlar111]

No. You don’t take it for the sake of investing it. There many examples from many channels that CLEARLY outline this.

[@jasonricard5058]

I agree, not great advice. It’s very tip of the iceberg. Quite a lot of simpletons in this thread

[@ddavidson5]

⁠@@HuplesCatthat "average age of death is 82" statistic you are using is from birth. It's higher for those that have already reached their 60s because they avoided dying at a younger age.

[@erikk5992]

Good for you

[@BinuDauti]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[@VivekLuna]

I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks.

[@BinuDauti]

@@VivekLuna Quitting may not be the best approach if you ask me. This is where an AI comes into the picture. I barely have time to trade myself as my job swallows up most of my time. *MARGARET MOLLI ALVEY*

[@VivekLuna]

@@BinuDauti Oh please I’d love that. Thanks!

[@BinuDauti]

*MARGARET MOLLI ALVEY*

[@BinuDauti]

Lookup with her name on the webpage.

[@johnmcdonald5998]

Most current avg life expectancy in Canada is 81.4 years, down from 81.6. I did not see the gender differential. A new reality, some of us who have pensions, and homes, and savings (three jobs at one time), will have to use the CPP to assist family members if the current housing shortage continues, at least for a few years. A lot of my friends are now "re-assisting" their adult chidren who are gainfully employed, but can't afford homes. Everyone's financial needs are unique. I agree, educating onself is the best option moving forward. Thanks for sharing.

[@1966johnnywayne]

The contributors that are most likely to die in the 10 year catch-up period are men, particularly truck drivers, construction and factory workers, which is, IMHO, the reason for the government pushing this rationalization. This "wait until 70" push with the perverse +0.7% incentive (early withdrawal penalty having recently been increased from 0.5% to 0.6% to disincentivize PLEBS "early retirement") to not take what should be yours (I didn't agree to this plan) is a government pushed strategy to transfer "male wealth" to temporarily help offset the increasing cost of maintaining retired women as the number of female CPP recipients is currently around 250K higher (plus 800K more female "survivor" pensions) than males and increasing. Also, I suspect that the average male CPP pension is currently much higher than the average female CPP pension, further incentivizing government to push "wait until 70". Point being, men have different considerations than women when deciding what is the best retirement age for you.

[@ddavidson5]

One thing to think about when deciding to defer CPP or not... If you look at the Canadian Pensioner Mortality (CPM) tables used by pension plans you will see that a 65-year-old couple has a 50% chance that one of them will live to 94 with a not unreasonable 25% chance that one of them will live to 98.

[@awebuser5914]

When you are 90+ _you don't spend money_ in any meaningful way.

[@ddavidson5]

@@awebuser5914 Not that I said anything about money but since you brought it up... Why is the number one worry for pensioners "running out of money" if they won't need it? I don't know about you but personally I'd rather have a decent secure income until I die than not. But that's just me.

[@awebuser5914]

@@ddavidson5 The "running out of money" thing is extremely rare and really for those with absolutely no illiquid assets prior to retirement (house, cottage, etc.) The vast majority of retirees will have a house and other assets and those can be leveraged for income or completely liquidated, if needed. The bottom line is that if you "run out of money" post-retirement, there was obviously a huge problem with your retirement savings to begin with and you really should not have retired when you did, or you did not budget in any realistic manner and overspent. Painful, but true...

[@michaelcooke4492]

Missing a lot of factors. What about indexing? What about the 10% bump up at age 70? What about GIS?

[@BehindTheVault]

kzbin.info/www/bejne/j3ilhXZ4fbV6pMk

[@AngeloMantzios]

Again, you can take it whenever you want. But deferring CPP means you're funding that difference. So just run the numbers.

[@michaelcooke4492]

@@AngeloMantzios Agreed you miss the first five years but if you live long enough you more than make it back. If you take $1200 at age 65 as opposed to $800 at 60 you will eventually pull way ahead. Also all indexing will be based on the higher amount ie. 2% raise on $1200 is a lot more than 2% on $800. And at age 75 you get a $120 a month raise as opposed to $80 a month not factoring in indexing. And for low income seniors GIS calculations have to be considered. There is no way you can say that for all people deferring is a bad idea. I agree,work the numbers.

[@AngeloMantzios]

@@michaelcooke4492 your whole plan is based on “if”. Isn’t that kind of risky when it comes to money & retirement?

[@michaelcooke4492]

@@AngeloMantzios All retirement planning is based on “if”. People argue “What if I die before 65? I will have left all that money on the table”. A more important question is “What if I live to a very old age? How do I maximize my income?” I would argue if you don’t need it to live and you have no reason to believe you’re going to die young you should wait. But as always get professional advice and crunch the numbers.

[@1966johnnywayne]

Obviously you haven't addressed the tax implications of drawing at 60 vs 65 or even 70, as each case is going to require individual scrutiny due to the tax costs of drawing down your personal pension in conjunction with CPP income. Also, 6% "modest" return is probably a little high as most people will be much more cautious with their investments during the retirement years. Finally, the motivation to draw at 60 is greater for a man than a woman due to life expectancy differences.

[@Jackie9020]

That’s the best explanation I’ve heard on this subject.I’m shocked no one I follow or talk to has mentioned this from this angle,1 year to go before 60, many thanks!

[@BehindTheVault]

SO glad you enjoyed the video!

[@kevlar111]

Talk to someone about this. This video is wrong.

[@snowwhite2709]

​@@kevlar111how is it wrong?

[@rb239rtr]

@@snowwhite2709 Fundamental math issue- you have to account for inflation with your expected earnings on the $60k, so you have to make much more than 6%. With historical inflation rates of 2-3%, you need to make around 8.5% to stay even, and you cannot have any down years. If you have a -20% year at 65, you run out of money at 80 years. If you have 3 Zero growth years at 61,62,63, you run out of money at 77. If you have one Zero year at 61, you run out of money at 82. At 70, if you have a minus 10% year, while all the others are plus 8.5 %, you run out of money at 84. You have to manage this 60k your entire life and be good at it to match CPP. Meanwhile, defering CPP and spending the 60k in the meantime is way easier to manage, and if you mess up badly, go back to work. How many of us average 8.5%, year after year. Not many. If your health is good or even middling, take the sure bet and defer your CPP.

[@samspade1841]

Do not just follow this advice. You may regret it. You should analyze your specific situation with someone independent who has knowledge about financial planning. This guy didn’t discuss the 42% increase in CPP if you delay until 70. And if you factor in inflation adjustments it will be closer to 50%. And then you can count on that income for the rest of your life. If you die early it won’t matter because you’re dead.

[@SilverPaladin]

The way I see it, the government has done the math. If they want you to defer your cpp, it must mean they will benefit over you in the long term. I have learned that I should actually do the opposite of whatever the government says I should.

[@alhumphreys5784]

Actually the gov wants you to take it earlier, because if you live longer it costs them far less in benefits and if you die earlier the beneficiary gets much less!

[@jonl559]

In looking at this again, your math is flawed here. Net income from government in both scenarios is a wash at age 74 but the cost to top up the “take CPP AT 60” scenario to 1000/ mth from 60 to age 74 is (1000-640=360x12=4320x15 years (age 60-74) is a total of $64,800. You missed that in your calculations.

[@saloninegi7062]

Some paranoid types saying the government is giving KZbinrs instructions to say to delay the pension. There's a strong argument in favor of delaying the pension in today's high inflation environment, because the benefit keep rising. In contrast to investing your own money and hoping to at least track inflation, the CPP benefit offers a risk free return.

[@James_48]

Absolutely! I will willingly transfer this risk to CPP at age 70 and fund my retirement with my hard earned savings prior to that.

[@jl4482]

That was a great video. I have been watching many videos on when to take CPP. I was leaning towards the RRSP meltdown and take full CPP at 65 or 66 but that may have changed. I am fortunate to have an indexed pension that will cover most of my retirement. CPP and OAS Is a bonus. Thanks again

[@BehindTheVault]

So glad you enjoyed the video!

[@garmin1488]

Couldn't agree more, I took my DB at 55 after 32 years , now work part time, make even more money and will take my CPP at 60 on my birthday. I know people who still work full time and took their CPP at 60, not sure that's worth it but they want every dime to live now.

[@liamtaylor4955]

The reason I'm holding out to 65 (now just 26 weeks away) is so I can get CPP and GIS and OAS all started on the same day. My intent is to not have to work AT ALL when I retire, so I don't want to "top up".

[@benvolman4976]

Because when you take the paltry cpp at 60 you need to rely on depleting your savings to survive. The average person who is making decent money can continue to accumulate funds to better ensure comfort in old age. If you're in good health keep working. Is the host part of a reverse mortgage company? Cat food manufacturer?

[@1962terri]

Listening to this is just like a wake-up call! I will turn 60 in Nov 2022 and taking my CPP. It only makes sense! Thank-you!

[@BehindTheVault]

So glad you enjoyed the video! Happy Birthday

[@parkerbohnn]

They pay you a fortune not to take it and if you're broke you won't have to worry about getting all your OAS clawed back.

[@itsthepoolguy]

This is all based on a life expectancy of 74, more than 50% of Canadians are on average living passed 80. Look at everything like you said.

[@dawna4185]

ya, but what is the quality of life at 80 and beyond? too many didn't invest in what really matters and that is good health!

[@MC-do4dw]

@@dawna4185Didn’t you know that 80 is the new 60?!

[@dawna4185]

i work in a nursing home and there are no "new 60 year old's" lol.....@@MC-do4dw

[@James_48]

Correct, and the more risk you vacant transfer to CPP and OAS the more stable your retirement income stream can be.

[@jbmop]

A 6% inflation adjusted return isn’t exactly modest, especially considering it’s not going to be all equities because of the time horizon.

[@mrslcom]

No answer is absolutely right or wrong. It all depends on your health, finances, and personality. If you delay CPP and die early, you’ll lose out on CPP but likely have a small RRSP tax liability, and vice versa.

[@BoreasCastel]

Between threats of taxing unrealized capital gains, a near refusal to let Canadians leave, frozen bank accounts of protesters, imprisonment of men who don't pay alimony that they don't have and can't get, the tossing of prenups, and the blatant dishonouring of wills, I'd say spending and giving most of your wealth away before you die is a far more sensible option than having faith that your rights to decide over your wealth will be respected after you're gone. Only reason I listed the rest is to point out that it's a clear trend.

[@edstepanic2214]

You’ve got me rethinking my retirement strategy. We appear to have entered a high inflation period that is likely to persist. I believe CPP is indexed to the CPI (too low IMHO) so I wonder what effects high inflation will have. Seems to me that taking CPP at 60 remains the better choice.

[@James_48]

If you think high inflation will persist and you have your own savings to bridge the gap to age 70 then why not wait for an inflation adjusted, 42% higher payment. Higher inflation is a strong argument to defer.

[@bipolarpunt5721]

If you live longer than 74, which most will, you will lose by taking CPP early.

[@monex90210]

Watch the video again. You are paying $60K out of your pocket for foregoing to 65.

[@GreggGordon]

@@monex90210 No you're not. Some idiot on the internet that failed math class saying doesn't make it true. If you move $60K from one side of the equation then you have to subtract it on the other side.. that's simple algebra. Taking it early means you now have to come up with an extra $60K to pay your expenses between 65 and 74.

[@AfterDeath1986]

Also if you are a dude and married a younger lady which is the norm.. and women like 7 years longer then men... This guy doesn't make sense.. it is how much cpp will pay us.. we can drawdown rrsps to avoid high income taxes by delaying cpp as well etc.. so by winding down your rrsp you increase your cpp and avoid higher taxes all at the same time

[@Jojo-o6o6w]

Not knowing when I will pass away I think taking cpp at 60 is the best plan. I feel its nothing more than a gamble to defer it.

[@pladam7198]

Everyone’s financial situation is different. One size does not fit all. Retirement age, RRSP’s and OAS clawback weigh into my decision to delay collecting CPP.

[@vzeq24]

The biggest problem with the CPP is its performance. According to some studies the CPP average annual return is around 2%. " For Canadians born after 1956, however, the CPP rate of return is a meagre 3.0% or less-and that rate of return declines further to 2.1% for those born after 1971. So, if you place your contribution in GICs instead of paying CPP you might have a better return. If you take the CPP at 60 and you invest it yourself for 10 years you'll get a better return than delaying it to 70.

[@rogerbudgell4226]

I disagree with you .. I waited till 65 and so happy I did !

[@DavidWilson-ps8gx]

This is a very good video. However, the one thing not taken into consideration is your tax liability upon death. If you have RRSP or LIRA and you did not melt them down. When you pass, while still having a large amount of similar investments, 40 to 50% will go directly to the government. Therefore, instead of going to your family, you have now given back any savings you might have benefitted from following the scenario offered in this video. As a tax planning measure, you need to think of your situation as a whole as indicated in the video. But by leaving out the tax planning aspect of your estate, you can cost your estate hundreds of thousands of dollars. Just remember that no one approach fits everyone, and your situation differs from your neighbour. Granted deferring your Cpp or Oas will mean you will have to front end load your plan by subsiding your initial retirement. But this is done as part of your overall estate planning and save you thousands.

[@johnoneil5728]

The overall value is not the way the average person lives their lives. It's the monthly expenses you need to live. $1000 goes a lot farther than $700.

[@wwoodcox]

Everyone’s situation is different. I am 63 and have been working to de-register my RRSPs/LIFs. CPP gets in the way by increasing my tax rate. Die with money registered in RRSP is more money wasted in Taxes more than a few CPP payments.

[@ThisOldMan-ya472]

All these experts NEVER factor current income and tax liability. I am 69 and did not want to have an even more reduced pension because of taxes. If I am still alive when I turn 70, and get my expanded pension, and my other incomes stop, I will be comfortable and smiling. Besides, those who took a pension at 60, do not enjoy the larger inflation and other pension adjustments.

[@dryster123]

I am sure comments will be mixed, it is situational. I took CPP at age 60, I had been retired since 50. The addition of the CPP to my curated income still meant I paid no tax, and I did not need the CPP money, so I invest it in my TFSA. The "break even" point of 74 is actually extended to 86 using historical stock market returns of 7.41% (optimistic) - however, taking CPP early definitely depends on your tax situation.

[@garth217]

Perfect analogy. My RRSPs are my savings..CPP is also my money. You have to be insane to burn through your RRSPs to double your CPP at 70. My CPP at 61 is 10,000 a year. Thats 90,000 earned before a cent of CPP at 70. So that's 130,000 at 74 .5 vs 90,000. But here's the thing, im not spending my CPP currently because my pension has a bridge Benefit until 65. That 40,000 is going into my TFSA which is currently earning 11%. My RRSP withdrawals are minimal currently and earning a great return right now. In fact the money i withdrew this year has been recouped in interest. I can't imagine spending all of my RRSPs over 5 years just to get more CPP. My high interest savings account is currently earning me 3500 this year.

[@rb239rtr]

You have a good pension. This plan of poster is flawed for those without a good pension

[@10drowsy]

I submitted my CPP Application to activate at my age 61. Just a few week after my birthday. During age 60, we live off some of my company pension and saved up RRSPs. This works for us....

[@brianponcelet3529]

This is dumbest advice you can get. The only time you want to collect CPP if your health is poor and you don’t expect to live very long. Have lots of RRSPs? Collecting CPP only compounds your Tax burden. I noticed there is no discussion on Taxes. Get independent advice!

[@robpatyna8658]

great video!! I am 60- work full time and make a decent wage. I put into RRSP through work and on my own. I will work until 67 probably. my question why not take my CPP now ( I don't need the money ) an put it all in RRSP until I retire that way I get the tax benefit and interest on that money for the next 7 years ?

[@sholbech22]

this really depends on your person financial situation, but 67 seems late!,.. there is a very good chance that you (or your spouse) will live into your 80's, so unlike this video, plan out to 85-90! The CPP plan rewards those that can wait until after 65 with a guaranteed 8.4% yearly rate of return!!! Guaranteed!!! .. potentially look at maximizing TFSA account/limit, then RRSP, then open account... On withdrawal... spend your RRSP first! 60-70, you've saved it, enjoy it.... take the guaranteed 42%+ inflation protection (65-70 deferral of CPP)... again every situation is different.

[@brenthalliday8068]

The answer to this question is different for each individual. There is no absolute correct answer. But a 6% return assumption is aggressive. Not easy to achieve.

[@Sola_Scriptura_1.618]

Great video. I suggest everyone do the math for themselves! I thought this would be the case, but I have yet to do the math. I have a few years before I need to make a decision.

[@brassj67]

If you are still working full time until you are 65 then it makes sense to take it when you are 65 but if you retire at 60 then it makes sense to take it at 60 unless you don't need it. It may be better to draw down a RIFF because of the tax implications when you die. For larger RIFFs, the government are going to get a lot of tax back if you die early

[@roger1818]

Every situation is different. While I agree you need to look at the big picture of how your retirement is funded, the best way to do that is to run the numbers and see which option gives you the most money. Financial planners have software that will do just that.

[@dogomanmosca7436]

Awesome stuff, the best scenario ever period! Thank you for making this video...I am subscribed for more great stuff. Kind regards, Frank

[@BehindTheVault]

Glad you enjoyed it!

[@wl03bu]

@5:00 Why would I fund my retirement with my own money instead of the government's? Because if I wait the government will give me more money! Sure I could die at age 69. I could also die tomorrow. Would your recommendation be not to save for retirement?

[@johndownes3891]

If you are looking at the totality of everything, then shouldn’t tax implications also be factored in to the decision making process?

[@johndeveau1686]

Health conditions play a factor in a big way being heart issues etc. All these factors depends on you gambling that , you stay healthy till your 80 or 90

[@ivobiancucci4528]

If you like your job why collect at 60? If you need the money at 60 my question is what did you do with all the money you earned before that?

[@andylowell7405]

Everyone says to meltdown rrsps and defer OAS. However ince you use your savings, they are gone. At some point you will die ir your spouse and you lose their OAS completely and onlt get a portion of their CPP. I just feel like its better to take CPP and OAS for both of us while we can and transfer our RRSPs into dividend stock in a TFSA, where is can grow and provide thae maximum dividend income. That's my current plan in 2 to 5 years time. Would melting down rrsps actually be better? I and my spouse have pentions but will need to supplement with additional funds. I just don't like tge idea of using my RRSP funds. There will be less and less dividend income as it diminishes. I want and need my money working for me. Do I have this wrong??

[@garmin1488]

No you don't have it wrong, take the CPP and OAS and let your money grow or take out just what you need to supplement your pensions.

[@saloninegi7062]

Thank you so much! One thing I'd like you to address: in today's high inflation environment, with the CPP benefit rising faster, if not taken, is it still better to take it early? I lost my job at age 49, and didn't like the thought of starting all over again. Fortunately' I've always been an investor. I sold my home and moved to a less expensive country with nice beaches and better weather. For the past 11+ years, I've been funding myself. My investments have been getting hammered lately, though, like most everyone else. I invest in solid blue chip equities, not bonds. I've been grappling with whether to take CPP now or wait five years. There's lots of good advice online about this, but you've cut to the chase. I haven't heard else anyone talk about how I'm making up that deficit, even if, in my case, the difference is only a couple of hundred a month. It does all add up. I'm thinking about it from this fresh new perspective, and if I'm still on the fence, I'll take it at say 62 or 63. Many thanks!

[@parkerbohnn]

I can give you some winners at the racetracks around the world.

[@James_48]

Reach out to Doug Runchey who can give you a personalized analysis on your CPP options within a few pennies

[@wealthgenerationstrategies]

Interesting conversation to be sure. I'm very two minded on this decision though. I think it will come down to where you will fund your life while not taking CPP. Personally, I still think it makes sense to defer CPP as long as possible because I intend to work at least part time to cover my lost CPP during those years. If you will be bleeding down your funds, I do tend to agree with your point of view. I think it really comes down to sitting down with a financial advisor and running the scenarios.

[@uncleal13]

I heard a lot of people recommended taking it early before covid. Then around late 2021 they all started to say take it later. It's like the government sent them instructions at the same time to delay CPP withdrawals. I turned 60 last fall and only delayed it to the new year. So this January I got my first payment.

[@parkerbohnn]

Don't bet it all on one race.

[@1966johnnywayne]

The contributors that are most likely to die in the 10 year catch-up period (delaying to 70) are men, particularly truck drivers, construction and factory workers, which is, IMHO, the reason for the government pushing this rationalization. This "wait until 70" push with the perverse +0.7% incentive (early withdrawal penalty having recently been increased from 0.5% to 0.6% to disincentivize PLEBS "early retirement") to not take what should be yours (I didn't agree to this plan) is a government pushed strategy to transfer "male wealth" to temporarily help offset the increasing cost of maintaining retired women as the number of female CPP recipients is currently around 250K higher (plus 800K more female "survivor" pensions) than males and increasing. Also, I suspect that the average male CPP pension is currently much higher than the average female CPP pension, further incentivizing government to push "wait until 70". Point being, men have different considerations than women when deciding what is the best retirement age for you.

[@dkyrtata6688]

I have decided to take CPP and OAS at 65 because I do not want to risk having OAS clawed back. So I have been grappling with the calculation with my own assumptions. The plan would be to invest the said $640/month for 5 years so that I can mimic the CPP bonus payout that I would receive at 70. The investment would be in an ETF that either pays nothing in distributions or pays in ROC so that the growth is not stifled by taxes -- at least for 5 years until I turn 70. The problem is that I am actually getting less than $640/month in CPP because the income is subject to taxes. In contrast, the CPP grows tax free during the 5-year deferral period. So break-even seems to be more difficult even with the investment earning capital gains which is subject to half the amount of taxation.

[@awebuser5914]

If you are worried about OAS clawbacks, you don't need to watch videos like this since your annual *retirement* income exceeds $82,000!

[@dkyrtata6688]

@@awebuser5914 I want what I am entitled to and not penalized for investing wisely over the years. Watching videos like this keeps me informed of my options. Everybody should do the same. No need to "dummy-up" just because one can afford it.

[@niceguy8305]

First video after watching hundreds where this is the route im thinking of taking. As well as taking it out early, you can invest this early cpp and take out less from rrsp or lira

[@Dom.Perignon123]

Just saw this > very interesting perspective > there are many school’s of thought on this subject but it’s great that we have several options based on personal needs, wants, objectives, etc > I’m fortunate to have a DB and bridge but have always felt that I’d hedge my bets come 60 - don’t defer too long but don’t eat too much reduction - and aim to pull cpp trigger around 61-62. I haven’t calculated the finer details but the yearly cpi increase will be based on lower amount; not sure how small/big impact that would be, but needs to be considered. That is part of my logic for a more balanced approach. I also need to be cognizant of potential rrsp tax bomb if I push that out too far so will take a balanced approach to ensure taxes are smooth throughout retirement. Thanks for your perspective BTV!

[@saloninegi7062]

Angelo, could you please address when to withdraw CPP in today's high inflation environment? The benefit increases by percentage. If the initial amount of your CPP benefit is higher, each percentage increase will also be higher in absolute dollars.

[@bhavin24888]

This is a different perspective I never heard of. Nuce video. If you die early without taking cpp government enjoya and give to someone else

[@James_48]

And what is live to 90? If you plan on dying early, will you deplete your own savings quickly?

[@parkerbohnn]

Some have to take CPP early to avoid getting clawed back on their OAS at age 65

[@James_48]

One must have unite a significant retirement income to trigger substantial OAS clawback.

[@parkerbohnn]

@@James_48 $90,997 is barely enough to survive on the the greater Toronto area. I don't know anyone who didn't get all their OAS clawed back.

[@James_48]

@@parkerbohnn well, I think in terms of couples, where $180k / year in retirement, where in most cases there is a paid for house, should provide a well above average retirement with no, or virtually no OAS clawback. We live in the GTA and expect our combined retirement income - well below $180k, will provide everything we could ever want for in retirement.

[@parkerbohnn]

@@James_48 You can stuff virtually everything in something that doesn't produce income like an index fund that reinvests dividends or gold bars but most people don't figure it out in time to avoid the clawback.

[@wayneandrews1022]

Not sure I see how adding to your income avoids OAS clawback.

[@franceshanlon1]

This really all hinges on taking it at 60 not working and living off your savings idk does that make sense ?

[@James_48]

Only if you’re an advisor who avoids his clients starting to sell their RSPs at age 60 instead of taking CPP.

[@glow9999]

Where are you going to get 6 % and take up to 30 years to deplete that amount? And do you have an extra $360 to top up to $1000? Sounds like BS. I’ll wait extra 5 years to get full CPP and end up with more at age 85, not 74 at break even.

[@HuplesCat]

Five years in a tfsa makes break even 80.

[@metalmanmike3815]

Tax brackets people...Tax brackets OAS clawback people....OAS clawback Single/Married? That comes into thought process too. Best to have your own scenario analyzed by someone you know who understands finances.

[@donnyg6595]

It may not be available if you wait till 70…. That’s putting too much trust in the government

[@FillupOnSilver]

Great Video ... and what is also behind the vault is PRB. Me age 67 still working semi-retired collect cpp at 60 oas at 65 and my prb earned since age 60 and will continue to age 70 I broke-even with 36% reduction in cpp 2 years ago just because of PRB. The financial planners/advisors never include prb in their anaylsis. haha

[@jasonricard5058]

No you didn’t. It’s clear you don’t have a financial advisor

[@ratan012]

Love this. You are the best. You got excellent clarity.

[@AngeloMantzios]

Sweet thank you!

[@nielsbeck7461]

But what if i need the 1000 per month minimum to retire, then i cant take it at 60, i need to wait till 65

[@dsteffler54]

Your logic is ridiculous.

[@caperboy1169]

Exactly

[@RobCain-p1p]

Is it wrong to continue to work and still draw cpp at 60?

[@sholbech22]

not wrong. you may get some additional CPP contributions each year you work ... but the biggest thing is the monthly/yearly CPP penalty for taking CPP at 60 is very impactful.

[@tanyaperrin8844]

Deferring CCP can make a LOT of sense, and anyone who doesn't understand that should not be giving advice to anyone else!

[@GreggGordon]

"By my math..." is something you shouldn't say until you learn how to better use math. You need to actually figure out the entire financial pictures... something anyone giving advice needs to do before they start trying to offer anyone advice.

[@ovid4]

No one is collecting $1000 mth for CPP

[@James_48]

Lol

[@sholbech22]

my dad owned his own lawn / landscaping business..(after working 40+ year in the grocery store business) he deferred his CPP 65-70, and is one of the few in the country at max CPP + full deferral = his rate is just over $1,900.00/ month!

[@davidjohnmiller4849]

When my current rent is over 1600$ not including bills/expenses/FOOD ect ... cpp is a fucking joke

[@Grimenoughtomaketherobotcry]

CPP isn't intended to entirely pay for your retirement. It's only one "leg" of it, the "government pension" leg, along with OAS, and if you qualify, GIS. Another leg is your company pension, if you have one, and the third is personal investments: your real estate, RRSP, TFSA, and non registered investments and bank accounts.

[@kriskafowlski4463]

Ya. But what about GIS? Taking CPP @60 will add to taxable income and lower GIS

[@BehindTheVault]

Hi Kris, take a look at our GIS video. kzbin.info/www/bejne/j3ilhXZ4fbV6pMk

[@AngeloMantzios]

What about it? Openly, how many people are retiring early to take GIS? But again, if you're not collecting it, it means you're funding the difference.

[@RCML27]

GIS only kicks in at 65. So if you take CPP at 65, then you're taxable income will be higher than if you take it at 60, and will result in a lower GIS. So for really low income seniors, it would be best to take CPP at 60 if you want to maximize your GIS.

[@jasonricard5058]

It’s pretty likely that a senior with income low enough to collect GIS will not have any near max CPP.

[@bobbush5339]

I do agree with you. Never trust CRA and take as soon as possible.

[@cciornei8001]

best explanation foir deferring!

[@davidw5393]

Revenue Canada and stats Canada point out that the average Canadian lives to age 85. That means many people will live well past that age. Doing this financial planning exercise and cutting off at age 74 is certainly not providing what I consider a good picture of what most people will be facing. Too many Canadians seem to think they're going to die earlier and I guess the sad or unfortunate message for them is they're actually going to live. And they are going to get substantially less money in their retirement by following an early CPP plan. A proper planning exercise should be based on those factual dates and show the plan up to at least age 85 which will show that deferral is the most financially beneficial in most cases. I encourage people to build a complete financial plan based on those factual longevity numbers from revenue Canada based on age 85 and look at the bottom lines. While some people will die early many people won't. That's a very relevant consideration when providing retirement planning information.

[@martik778]

I think 65 is good compromise vs age 70 because most will slow down in their 70's and won't be spending as much money in their slow-go to no-go years.

[@monex90210]

I don't disagree with your view on longevity. What is the quality of life for most beyound 75 years of age though? More CPP to pay for public retirement home with payment based on financial resources

[@davidw5393]

@@monex90210 I think it depends on your expectations about retirement life. I'm in a variety of sports clubs and we have members in their 80s and even '90s actively participating and the quality of life is very positive. Statistics would point out or if you've ever been on cruise ships, you'll see more and more older people are spending lots of money, traveling and enjoying life. They need lots of money to fund that. Personally, our expenses since we've retired have gone UP as we retitred and we looked at our pre-retirement expenses and budgeted for 20% INCREASE to fund all the great quality of life activities that we could do for the next 20 plus years. And that includes all kinds of intellectual activities and social fun. This is why I think it's so important that you look at averages as some people will age gracefully and have an incredibly positive retirement that last well into the 90s. I know others that I could say in their 50s that basically are couch potatoes. Mentally and physically . So what about that quality of life? Quality of course is in the eye of the beholder so I don't know what each member here would see as a quality life ahead. But statistics are quite clear you're going to live long and if you take steps, you can certainly improve the quality and length of your life. And from the groups that I've talked to the notion that your expenses will go down in retirement seems to be unfounded. It certainly relates to people that have a big mortgage to pay off but lots of people don't have a mortgage. So when you look at your expenses moving forward, what's going to change? You're going to be spending a lot more on enjoying life and of course you need to consider that you are getting older and we know from statistics that older people spend way more money on health care. So you're going to need a lot of money in the later stages of your life, perhaps even more than in the earlier stages. There's no one size fits all but I would suggest people base their planning on public statistics. The question that probably matters most is having a year by year plan for every year until 90 to see that you (and partner if applicable) are well taken care of financially. But it all comes down to individual perceptions about their future in retirement and how they are going to make sure they have more than sufficient funds to pay the bills for every single year. Assuming you're not going to be sitting and simply watching the grass grow from your rocking chair. There are plenty of tools out there and we certainly have our own to show every single year and every single source of income we anticipate over the lifetime of the plan which extends until age 90. Lots of good times ahead. Emotionally, psychologically and also financially.

[@James_48]

@@martik778 as I see it, one point of maximizing CPP by deferring to age 70 is to ensure I have a higher, guaranteed, indexed to inflation payment that I don’t have to manage. It’ll be done for me. In the event I need private healthcare assistance I’ll be in a better position.

[@Ricky-eo5ym]

Man great advice. I can't believe more people don't think like this . Let's say you take all the money and invest it from 60 to 65 you are going to have a huge nest egg to work with . Not to mention if you put that money in some safe blue chip stocks that are paying 6% dividend or REITs paying 10+%. People wake up!!!

[@franceshanlon1]

This really all hinges on taking it at 60 not working and living off your savings idk does that make sense ? 6:57

[@James_48]

This approach makes a lot of assumptions about returns that are not guaranteed, whereas CPP deferral and inflation protection is guaranteed. The average investor cannot: A) avoid spending their CPP instead of diligently investing it B) avoid touching it before 65 C) actually achieve inflation protected growth to achieve the mathematical outcome you are describing. Some savvy investors might make it happen some small percentage of the time.

[@frankcentofanti9317]

I have watched so many different points on this so frustrating how do you know who’s correct everyone says something different really frustrating. This vid makes sense so does the last one I watch that said 65 was better WHO IS CORRECT FRUSTRATING

[@tivertontom]

record at higher volume please

[@Mechone11]

If your melting down your rrsp the tax savings more than offsets what you say your losing

[@daveaird96]

This guy math is completely OFF. If you get a 1.75% Increase with indexing. Would you rather have that on the 1000 a moth or the 640 a month. That's only the first year. What about after 15 years of inflation increases. It's compounded back to the first year. You are getting increase on your exising increase., you may need that extra money one day in the future. What if you live well past the 74. You loose the 36% and the inflationary increase for the rest of your life. If money is tight already and you are still working. Wait till you are at least 65

[@alhumphreys5784]

Good for CPP if you take it at 60. They save a couple hundred thousand per person

[@CalmPlains]

Wellllllllllllllllllllllllllllllllllll you did not factor CPP indexing to CPI...

[@danag812]

This was excellent! Ive jad rhis argument with so many ppl but you actually put numbers behind it! Thank you and im glad i found your channel!

[@jancyking582]

TRUTH! And you don’t even talk about the financial loss of a surviving spouse. I deeply regret delaying my CPP until age 70. My spouse, who is younger by 10 years, will certainly not reap the benefit of my delay. For this reason, he will take CPP as soon as he is eligible. What most people don’t understand is that a surviving spouse will receive 60% of the deceased partner’ CPP. If both partners were already receiving the max or close to max CPP, there is absolutely a cap. Most of what I have saved by delaying my CPP will be lost to my partner upon my death. I feel like I have made foolish, albeit with good intentions.

[@rodhurst5831]

out live the spouse problem solved

[@martik778]

between zero and 36% NOT 60%

[@jasonricard5058]

This is an example of why people need to work with financial planners and not watch youtube videos