tag:blogger.com,1999:blog-5465015914589377788.post2678806870394837560..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: What Happens to My CPP If I Die Early?Michael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger28125tag:blogger.com,1999:blog-5465015914589377788.post-32448202270893102982021-10-08T00:13:06.782-04:002021-10-08T00:13:06.782-04:00Hi Deana,
If you get a My Service Canada Account,...Hi Deana,<br /><br />If you get a My Service Canada Account, you can look up a table of all the amounts you've contributed to CPP every year you've worked.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-69485370982361688272021-10-07T17:05:20.774-04:002021-10-07T17:05:20.774-04:00How can you find out exactly how much you had cont...How can you find out exactly how much you had contributed towards your CPP?Deana Cheney Howardhttps://www.blogger.com/profile/12858652522209454553noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-2602120440040540232021-03-02T13:23:13.730-05:002021-03-02T13:23:13.730-05:00Unknown,
I'm sorry about the loss of your mot...Unknown,<br /><br />I'm sorry about the loss of your mother. <br /><br />The way CPP works is the trade we make to get larger payments. If we treated CPP as individual accounts that pass to heirs upon death, the payments would have to be substantially smaller. The trade we make is a good one because we're better off with big payments while alive than leaving larger inheritances.<br /><br />It's similar to fire insurance. If you pay for years, but your hose never burns down, you don't get your money back. All the premiums paid by all homeowners (after the insurance company's cut) go to a small number of people whose houses burn down.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-18698128261689768582021-03-02T12:58:41.417-05:002021-03-02T12:58:41.417-05:00My Mom paid into CPP for 35-40 years. Only started...My Mom paid into CPP for 35-40 years. Only started collecting last year. She passed away completely unexpectedly and all they have to offer is $2500. But this isn't a problem, you say. Anonymoushttps://www.blogger.com/profile/10178942603274146611noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-18724778084154818942020-03-05T11:43:35.245-05:002020-03-05T11:43:35.245-05:00kt: So you're saying you want lower CPP paymen...kt: So you're saying you want lower CPP payments? Because that's what we'll all get if the government eliminates the longevity risk component of CPP payments.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-4311923609560187542020-03-05T11:25:45.181-05:002020-03-05T11:25:45.181-05:00... yes we have paid into CPP for 40 years... but ...... yes we have paid into CPP for 40 years... but the government has invested and used our money for 40 years. Believe me, we weren't just giving our money to the government, just to be able to get the same money back... you don't give a dollar to get a dollar back. The money we paid in if handled right, should be 10 times the amount. It should be handled just like an investment. If there is money left over at time of death, there should be a beneficiary listed to get a pay out.<br />kthttps://www.blogger.com/profile/08156325477865268337noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-74173619254865397702017-12-10T14:47:24.219-05:002017-12-10T14:47:24.219-05:00Since writing the comments above, I've decided...Since writing the comments above, I've decided that my analysis of when to take CPP and OAS was wrong because it didn't take into account the fact that I need to plan for the possibility of a long life. As explained at the URL below, delaying CPP and OAS will give me more income certainty in the future, which will allow me to spend more early in retirement.<br /><br />http://www.michaeljamesonmoney.com/2017/12/should-you-delay-taking-cpp-and-oas.htmlMichael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-68306433297993336012016-06-08T07:26:00.625-04:002016-06-08T07:26:00.625-04:00@Unknown: No, that's not true. If you want CP...@Unknown: No, that's not true. If you want CPP to be a bank account, then you'd have to accept that your benefits would stop as soon as you reach your life expectancy. If you happen to live longer, tough -- the account has been drained. The promise to keep giving you benefits if you live long comes at a reasonable price -- the end of benefits if you die young.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-55444729230958205842015-09-27T15:14:53.858-04:002015-09-27T15:14:53.858-04:00@Peter... So if you take the CPP early, you win ...@Peter... So if you take the CPP early, you win big if you die young. If you defer taking CPP, you win big if you live longer than normal.<br /><br />So to recap...Take it early, your possible results are (1) Right strategy, but you are dead. Or (2) Wrong strategy and you are still alive and perhaps running short...<br /><br />By taking it as late your possible results are (1) Wrong strategy but that's OK because you are dead. Or (2) Right strategy and you are still alive to enjoy it!<br /><br />I know what I am choosing...Garthhttps://www.blogger.com/profile/14367654772040176371noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-27394174530885080062015-08-23T21:31:15.290-04:002015-08-23T21:31:15.290-04:00Take it early, NO exceptions! NONETake it early, NO exceptions! NONESpeculatorhttps://www.blogger.com/profile/12133256840250747304noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-46843216113280883222015-08-23T13:05:43.031-04:002015-08-23T13:05:43.031-04:00@Jean: In the cases I've looked at where you t...@Jean: In the cases I've looked at where you try to maximize after-tax retirement income when drawing CPP, OAS, RRSP/RRIF income, etc., the best results came from drawing CPP early (assuming you retire early). The actuarial changes make it a closer call, but didn't change my results. I don't think early CPP being better is a universal truth, though. Each person's situation is different.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-55746135295671391702015-08-23T12:33:12.700-04:002015-08-23T12:33:12.700-04:00You understand that CPP is a bargain (no other way...You understand that CPP is a bargain (no other way for most people to get that low MER and diversification!), so I'll trust your advice more than many investment columnists. But I'm interested that you'd say it's often better to take CPP early - with the new regulations brought in a few years ago, I had thought the actuarial adjustment was such that unless you have a health problem or lose your job pre-65, it's unlikely that taking early CPP would be to your advantage. Jean Lionhttps://www.blogger.com/profile/03081604118382069708noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-6567777522497872482015-08-23T09:37:08.541-04:002015-08-23T09:37:08.541-04:00@Peter Wolf: Because of the reduction in CPP benef...@Peter Wolf: Because of the reduction in CPP benefits from taking them early, it can sometimes make sense to wait to start collecting, but in most of the cases I've looked at, it does makes sense to take CPP as soon as you stop working (or age 60, whichever is later).Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-73354612423807379092015-08-23T08:40:05.002-04:002015-08-23T08:40:05.002-04:00This is why I plan on tapping into my contribution...This is why I plan on tapping into my contributions as early as I can. Age 60 for me which is next year. Because we don't know and neither do the plan administrators so take your money at the earliest possible date. This is the same useless complaint I hear all the time about EI contributions. What you receive over the course of time FAR FAR FAR exceeds your contributions. It's not even close. You collect more in 1 year of CPP or EI than you would contribute in 10 years. <br /><br />It's a great deal no matter how you slice it. It's all indexed to the CPI so another great benefit attached to it. So you die early, (what is that date)<br />nobody knows. It's a personal pension plan this CPP, based on your earnings. It's not an estate planning tool, when you're gone so is your CPP - TAKE IT EARLY! YOU MIGHT DIE WAITING!Speculatorhttps://www.blogger.com/profile/12133256840250747304noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-13002102333640233142015-08-21T08:01:42.961-04:002015-08-21T08:01:42.961-04:00@Anonymous: I suspect its more a case of not thin...@Anonymous: I suspect its more a case of not thinking everything through.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-46647277904038637662015-08-21T08:01:02.808-04:002015-08-21T08:01:02.808-04:00@Anonymous: You're right that we need to consi...@Anonymous: You're right that we need to consider positives and negatives. Looking at only one side is like expecting to get your insurance premium back if you never make a claim.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-34138139277954974962015-08-20T21:43:45.823-04:002015-08-20T21:43:45.823-04:00Are we expecting to get something for nothing?Are we expecting to get something for nothing?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-35116827807837642782015-08-20T21:39:40.706-04:002015-08-20T21:39:40.706-04:00Why are we looking at one side of the coin, i.e. C...Why are we looking at one side of the coin, i.e. CPP not compensating you enough if you die early. We should be considering in tandem the benefits of living longer than the expected age of death. Not to mention the added bonus of having longevity insurance, inflation protection and the investment risk mostly removed. If we supposedly die "early" we are short changed on time, so who cares about CPP.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-6254687088809062312015-08-19T11:23:04.813-04:002015-08-19T11:23:04.813-04:00@Anonymous: It's true that I simplified the di...@Anonymous: It's true that I simplified the discussion. There are death benefits in some circumstances. However, if you die young, these death benefits do not fully compensate for the benefits you would have received if you had lived to the expected age at death. So, we are still left with the same debate.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-35734874356646924272015-08-19T11:03:32.479-04:002015-08-19T11:03:32.479-04:00Under certain conditions the estate, as well as a ...Under certain conditions the estate, as well as a surviving spouse or children (who are usually beneficiaries to the estate) can receive CPP benefits after death:<br /><br />http://www.servicecanada.gc.ca/eng/services/pensions/after-death.shtml<br /><br />So it's not quite true that nothing's paid out if you die early.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-39177294697802545212015-08-19T09:53:34.932-04:002015-08-19T09:53:34.932-04:00@Gene: I'm not sure this will help. Most pens...@Gene: I'm not sure this will help. Most pension systems I'm aware of stop payments at death (except for a possibly reduced spousal benefit that continues). Not all annuities stop at death. There are term-certain varieties that provide a lump sum if you die early.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-21870639053765330302015-08-19T09:48:13.248-04:002015-08-19T09:48:13.248-04:00I suppose they should call it a delayed annuity in...I suppose they should call it a delayed annuity instead of a pension? genehttps://www.blogger.com/profile/05608927986297939720noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-60941618075776958652015-08-19T09:45:21.533-04:002015-08-19T09:45:21.533-04:00@John: Glad you liked it. In this age of texting ...@John: Glad you liked it. In this age of texting and tweeting, "with a little thought" doesn't happen often enough.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-36916424019830883062015-08-19T09:32:10.273-04:002015-08-19T09:32:10.273-04:00Great post! Gail should know better.
It always h...Great post! Gail should know better.<br /><br />It always has me scratching my head when smart people push for something that is, with a little bit of thought, clearly a bad idea.John Ryanhttp://www.moneytimeblog.com/noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-92104806809826887282015-08-19T08:30:02.401-04:002015-08-19T08:30:02.401-04:00@Joaquin: You ask a number of good questions that ...@Joaquin: You ask a number of good questions that CPP administrators could answer, but I don't know the answers.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.com