tag:blogger.com,1999:blog-5465015914589377788.post1936383191475305290..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: A Conversation About CPPMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-5465015914589377788.post-41780465007303170442022-05-30T17:36:25.046-04:002022-05-30T17:36:25.046-04:00Thanks for pointing out those material differences...Thanks for pointing out those material differences between CPP and QPP. I'm not up on QPP.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-12285332752407195762022-05-30T17:25:53.407-04:002022-05-30T17:25:53.407-04:00Interesting. If I may suggest, at least a HEADS-UP...Interesting. If I may suggest, at least a HEADS-UP for QC residents who get QPP instead of CPP. The regimes are similar but not identical. QPP does NOT have an extra provision for dropping out zero or low-income years between 65-70. Those years are included in the calculation, zero or not. And instead of 17% dropout , QC's Is 15%. Could make the "delay to 70" decision less attractive in QC, for those with insufficient dropout room. Needs number- crunching case by case, of course. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-15572779750558901052022-04-14T12:42:55.971-04:002022-04-14T12:42:55.971-04:00Hi Greg,
I'll have to disagree with "We ...Hi Greg,<br /><br />I'll have to disagree with "We all know we will never get most of it back." CPP is a well run system that invests far better than most Canadians do. The typical Canadian gets more back than they would have got by investing their CPP contributions themselves.<br /><br />Keep in mind that payments for CPP starting at 70 are more than double the size of CPP payments starting at 60. So, it doesn't take multiple decades for the larger payments to catch up.<br /><br />Another thing to keep in mind is that CPP payments are indexed to inflation. This means that the relevant investment return is whatever VRIF produces less inflation.<br /><br />The main reasons to take CPP early are that you don't have savings to live on now or you're sure you'll pass before you're 80. There are a few other less common reasons as well.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-65216375500611019532022-04-14T11:11:03.519-04:002022-04-14T11:11:03.519-04:00Hi Michael,
I retired last August and will be 60 i...Hi Michael,<br />I retired last August and will be 60 in October. I've read a lot of these articles and it seems most analysts believe 70 is the magic number to start drawing. A lot also say income for decades. Well, after 60, there really are not a lot of decades left. I paid into CPP all my working life and my employer matched it. We all know we will never get most of it back. I'm starting to entertain the idea of taking CPP at 60 and investing it, even if it is only going to earn me 4% in something like VRIF with DRIP, at least I'm getting more years of CPP in and will have added to my portfolio if I were to not be around much after 70 for example. What are your thoughts on this?<br /><br />Thanks,<br />GregGregnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-87526190296727430852022-04-01T21:50:00.156-04:002022-04-01T21:50:00.156-04:00Hi Sandrider,
Unfortunately, your advisor's r...Hi Sandrider,<br /><br />Unfortunately, your advisor's reasoning doesn't make much sense to me. It's true that your CPP plus your CPP survivor's benefit is subject to a maximum, but that maximum adjusts if you didn't take CPP at 65. All the gory details are here: https://retirehappy.ca/cpp-survivor-benefits/<br /><br />What you say about making sure what's best before starting CPP is very true. You can't change your mind.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-80786664633004069122022-04-01T21:41:18.974-04:002022-04-01T21:41:18.974-04:00My husband died unexpectedly at 59. I was 56 so I ...My husband died unexpectedly at 59. I was 56 so I got survivor's benefit based on his CPP contributions. When I approached 60, I asked my advisor if I should start my own CPP. Since I had retired at 55 and spent most of my working years paying less than the maximum, my benefits were going to be very reduced. He did the numbers and determined that in my case, since the combined benefit can't exceed the maximum payout, there was no benefit to me to postpone starting, so I took my CPP at 60. I often wonder if his calculations were correct, but once you make the decision to start, you can't change your mind. So really do a lot of research if you are in a position like I was. As soon as I started my CPP, my survivor's benefit was reduced and I think it will go down again when I hit 65. Sandridernoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-47262429735329457622022-04-01T12:51:42.916-04:002022-04-01T12:51:42.916-04:00Hi Jer,
Glad you like it. I see a constant strea...Hi Jer,<br /><br />Glad you like it. I see a constant stream of arguments for taking CPP at 60 that just don't hold water.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-21554936588864727472022-04-01T10:00:28.198-04:002022-04-01T10:00:28.198-04:00Well done, Michael.
You touched on what I think a...Well done, Michael.<br /><br />You touched on what I think are the key points, and the ones that lead me to plan on deferring out CPP until 70.<br /><br />Yet each spring, tax season, I have to answer to my accountant who fully believe in the "get it at 60 because you might die" philosophy. I shake my head and question why I deal with him.<br /><br />Thank you for creating a very good reference piece that I'm sure I will link to in the future.Jerhttps://www.blogger.com/profile/00569776775109607962noreply@blogger.com