Easy money most Canadians miss.
Canada Pension Plan.
You’ve earned it, got it coming to you and boy are you going to get it… or at least some of it. That’s the crazy part. Many Canadians will inadvertently pass up well over $100,000 of their CPP entitlement by not paying attention to when they start to draw their benefits.
Here are 5 things you really need to know about your CPP Benefit:
1. Most people underestimate the impact of CPP
Your CPP benefits are a big deal. For a couple, where both spouses have regularly contributed to the CPP plan, the lifetime CPP income they can anticipate will likely exceed $700,000. Consequently, it represents an important strategic contributor to the creation of a sustainable retirement income.
2. Conventional wisdom is dangerously outdated
The difference between the best time for you to start your CPP and the worst time can be over $100,000. Seriously. The CPP rules changed, effective 2013, and everything everybody ever thought they knew about starting CPP benefits needs to be thrown out the window. Those who choose to rely on dangerous and outdated conventional wisdom will have the rest of their lives to look back in regret.
3. Don’t overlook the survivor benefit
Previous generations grew accustomed to simply starting their CPP as soon as their employment years ended. After all, the sooner you started, the longer you collected, and the more you were likely to receive.
Don’t get me wrong. Longevity continues to be a very important variable when determining optimal start dates. That’s why making an educated guess about how long you think you might live is a critical as part of the CPP optimization process. This is particularly relevant if you anticipate a long interval where a surviving spouse will be left fending for themselves. In these situations, the complex rules relating to the amount a surviving spouse is entitled to become extremely significant.
4. Getting the right answer is not easy
Attempting to determine your optimal CPP start dates on your own is not simple. As an individual, each of us has a total of 121 possible start dates (each month between reaching age 60 through age 70 inclusive.) If you are a couple, each of you have the same number of choices. However, when you look at the number of combinations and permutations of a couple, the number of complicated mathematical calculations that need to be completed, explodes into a whopping 14,641 choices with the added implications of the survivor benefit. The right answer requires a full and comprehensive analysis.
5. The right tool gets you the right answer
Like to know how much money you risk leaving on the table by choosing the wrong timing? To get your optimal CPP start date(s), click here.
You will be asked to provide 3 pieces of information:
- Your birthdate(s)
- A best guess estimate of how long you think you will live
- Your projection of what percentage of the maximum annual CPP benefit, you will be entitled to
Our Retirement Navigator™ CPP Optimization tool will immediately provide you with the financial differential between the best time and the worst time to start collecting your CPP entitlements. I’m confident you’ll be shocked by the difference.
In a world where many things are beyond your control, your CPP start date is something that is totally within your control. Be informed, be smart and put the most money possible in your pocket. I am sure it will be the easiest money you didn’t pass up.