Retirement Income

Your retirement income will likely consist of OAS, CPP, private pension and investment income.

You should review and project your pension option to determine if you need to save.  Your pension may not pay enough.

If you leave GM, OPG, OMERS, Teachers or any place with a defined benefit pension plan, you should compare the potential of commuted values, timing of income to your specific needs and have me identify and shop for your alternatives.

Pension Review

  • Pension documents can be difficult and they contain life altering choices. I can help interpret,  discuss and quantify your choices to help you make a better decision.
  • I review your pension documents, do some analysis, put some numbers to your documents to put things in context and tell you what it all says and means!
  • I tell you your options and the pros and cons of each.
  • I have seen some pension documents that include government benefits when telling you how much your retirement income will be to make their pensions look better!
  • It is useful to know that there is generally no capital left from your pension after you and your spouse have passed away.
  • I can shop the market to provide alternative annuity quotes which may pay more than what the employer’s insurance company is offering
  • I can transfer your pension to a locked in RRSP and offer almost all mutual funds available on the market.
  • I can help unlock a portion of locked in RRSP’s if you need cash.
  • This will allow you to take control of the assets and your estate will not lose out

Government Pensions

Old Age Security (OAS)

  •  Old Age Security begins at age 65 and is about $7,356 per year.
  • OAS stops at the month of death.  If both husband & wife are receiving OAS, it is important to note that only one OAS payment will continue on if one person passes away.  Therefore your family monthly income will decrease by $7,356 upon the death of one spouse.
  • There is an old age supplement benefit available if the pensioners’ income is below certain limits

Canada Pension Plan (CPP)

  • Your Canada Pension Plan income depends on how much you paid into it and when you begin collecting.
  • The maximum CPP amount is $14,085/yr. for 2020
  • Your CPP payment will be reduced by between 0.5% to 0.6% per month for every month you start collecting prior to age 65.  Someone taking CPP at age 60 will have a permanent 36% reduction in benefits.
  • Your CPP will increase by 0.7% for each month after age 65 that you delay receiving it.
  • If you are close to the date or want more exact numbers, you should contact CPP to ask for your specific numbers.
  • People can use the “child-rearing provision” to increase their benefits for years when they have children under age 7 at home. You may want to get your children’s birth certificates and get things straightened out now.
  • You can get a survivor’s benefit if your spouse passes, but the maximum $12,456 still applies so if you are both receiving the maximum amount, then one CPP pension benefit will stop upon death.