I’ve been writing for 12 years and the most popular articles I have written are on Canada Pension Plan. Rather than re-invent the wheel, I thought I would post some of my favorite articles on CPP.
Common Questions about CPP
I wrote this article for Canadian Finance Blog this year and it tackles four of the most common questions I get on Canada Pension Plan. How much will I get? Should I take it early? Can I split CPP? Is it clawed back?
How much will you get from Canada Pension Plan in retirement?
In this article I talk about how to calculate your retirement benefit and why most Canadians should not count on the maximum amount in retirement.
CPP Child Rearing Drop Out Provision
In this article I talk about how parents who took time off to raise children can get more from their Canada Pension Plan.
Will Canada Pension Plan be there when you retire?
I continue to be amazed at how many Canadians still think CPP will not be there when they retire. In this article, I provide some facts about how to evaluate controversial topic.
New proposed changes for CPP
On May 25, 2009, Federal, provincial and territorial Ministers of Finance recommended changes to the CPP. This article sums up the proposed changes which are scheduled to come into effect for 2011.
Modest CPP changes in the works
Canadian Capitalist, a very popular financial blogger, gives his insights on the proposed changes to Canada Pension Plan.
Sooner or Later? When to start CPP
Tax expert Jamie Golumbek discusses the proposed changes from a tax perspective.
Service Canada on Canada Pension Plan
This is the government website providing all the information on CPP.  You can always find the current CPP rates on this site.
CPP Investment Board
This site is a great resource on CPP and how it is being managed. The CCP investment board is in charge of managing the $130 billion dollar fund.
RRSP vs CPP
Micheal James on Money provides a hypothetical comparison between RRSP and CPP. Unfortunately we can’t opt out of CPP.
Ask the readers:Â Increase in Canada Pension Plan?
Another popular personal finance blog Million Dollar Journey talks about increases to the contribution rates. There’s lots of interesting responses from readers.
Canada Pension Plan Disability Benefit
This is a topic I do not know much about so I enjoyed reading this article.
A simple guide to Canada Pension Plan and Old Age Security
A good primer on CPP by a Vancouver based advisor.
You’ve managed to offer a ton of great information in one concise post. Thanks Jim!
Thanks for the mention Jim!
Thanks for including my post in your round-up of the CPP posts, Jim. Cheers!
FWIW, here’s a post comparing CPP and RRSP I did recently – Pension Reform: a Comparison of CPP(IB) vs RRSP / RRIF / LIRA / LRIF / LIF
How many Canadians Does it Take To Support an Aging, Entitled Baby Boomer?
Back when the Canada Pension Plan was founded (1966) and when universal healthcare was adopted (1996/1984) there was 6.8 workers for every 1 retired person. In 1966 the CPP cost Canadian workers 1.8% of their gross pay.
Fast forward to 2010… there are 4.5 workers per 1 retired person with 10,000 Baby Boomers turning 65 every day for the next 18 years. That is 416 per hour, 7 every minute. In 2010 the CPP currently takes a 9.9% premuium to fund itself from every worker in Canada. (5.495% from the employee and 5.495% from the employer). This represents a whopping 450% increase in CPP premiums as the worker/retiree ratio shrank by 34%.
So for every 1% drop in the worker/retiree ratio, CPP premiums have gone up by 13%.
Now contemplate the year 2030… in that year there will be 2.5 workers per 1 retired person. Why 2030? That is the year the last Baby Boomer will turn 65. That 2.5 worker/retiree ratio will 44% lower than it was in 2010 and 70% lower than it was in 1966. So if the CPP premiums only go up at the same ratio as they have increased to date that will mean every Canadian worker can expect to pay a CPP premium of 57%.
Split with your employer paying 28% and you paying 28% please remember that that 57% tax on your gross pay hasn’t yet funded a single dollar of the gun registry, paid for a single MRI in your local hospital or trained a single new worker to replace you when and if – as a member of the post-BabyBoom generation – you ever hope to retire.
Now you are supposed to be comforted by the fact that the Baby Boom generation is saving and investing more than any previous generation and hence the need for the CPP will reduce over time. The generations that survived the Great Depression and WWII didn’t really have time or money enough to save for retirement, hence the need for the CPP in the first place.
Do you really think Canada’s employers will stand for paying a 28% payroll tax to fund retirees?
No… i predict this will be the next big movement in the politics of pensions… watch as the Canadian Federation of Indepent Business, the Chambers of Commerce, etc,etc, increasingly pour money into lobbying the federal government to cap their rate where it is (4.95%) and shift any increase in CPP deductions solely onto employees.
Don’t believe me? Check out the chart of worker to retiree ratios in today’s GlobeandMail.
Don’t trust my CPP rate calcuations? Visit the very good wikipedia article on the CPP here.
Think there can’t be THAT many baby boomers? Here are the numbers.
draft
tell me where my numbers are off please. for some reason i have found myself blogging about the CPP lately…
Thanks for all the links to past articles. These are really helpful for me. I don’t really understand how the Canada pension plan works, but it’s probably best if I figure it out. I feel like it’s an important part of my financial future.
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My husband applied for CPP when he turned 60. He collected for over five years. He was still running a business and making an income. The business is defunct and has been for three years. I am in the process of trying to close it in fact. He still works but makes a low income. Two years ago he received a letter from the Gov. stating that he made too much income and so was cut off his CPP. He only now receives his old age pension. My husband is 68 years old. I have not heard or read where the Gov. can cut off your CPP because you still work. They have told him he can reapply if his income becomes lower. Is this right? Thank you in advance for any information.
Hi there,my name is John stewart i work for the Alberta Goverment(37yrs)I am going to turn 60Dec,1st 2012.Now should i and can i start collecting my Canada pention after dec.12012?thank you hope to hear back soon…..John