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I read this in the Toronto SUN today. (paper given to me for free)

"The changes will mean that anyone who chooses to retire early and begin collecting benefits at 60 will have about $4,000 a year less than if they had retired at 65, the report by the BMO Retirement Institute found. If you stay on the job until 70 payments could be $4,600 a year more, based on maximum CPP payments."

Can anyone explain what exactly has changed from the old rules to these new rules?
 

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The answer is further along in the article you linked to, Jungle. I quote from the Toronto Sun article:

Under the new rules, that will take full effect by 2016, anyone choosing to retire before the age of 65 will have their CPP pensions reduced by 0.6% for each month up to that age. Those who stay in the work force will have 0.7% extra for each month thereafter.

The current rules are 0.5% less for early retirement and 0.5% more for working longer.


And here's a link to a CBC news article explaining the changes:

http://www.cbc.ca/consumer/story/2010/10/27/con-retirement-age.html
 

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it looks like the carrot rather than the stick.

some - mostly clued-in young professionals in their 40s & 50s who are worried about big tax increases - are advocating a raise of retirement, old age pensions & related benefits to age 70-75. They say that when current CPP was initiated in the 1960s under liberal prime minister lester pearson, life expectations were noticeably shorter than today.

they say now that folks are routinely living into their 80s the pension age should be raised. And they say that of all the options facing canada today, this is the most humane. Other options being mostly of the ice floe variety.
 

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so far the french voters are not taxing their kids into the stone age.

sarkozy will succeed in upping the age for french benefits, imo. But increasing the carrot in canada is a good strategy because it allows options.
 

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Just a reminder for those retirees contemplating taking their CPP starting at age 60.

The new early/late CPP rules make it even more advantageous to delay taking CPP.

Example.... a 59 year-old retiree with full CPP entitlement wants to take early (age 60) CPP. Question.... what would his retirement lifestyle look like if he delayed taking CPP until age 70?

Answer.... he would enjoy an extra $2400 (after tax/after inflation) per year each and every year if he delays taking CPP until age 70. That's an 8% after tax advantage, or $200 each and every month from his current age out to his die-broke age (95)

Based on a starting $500K RRSP, a 4% rate of growth and 2% inflation, living in BC.

Caveat.... this doesn't mean that the only measure that counts is the extra $2400 you get to spend on beer every year. Estate considerations may influence the decision to take early CPP. Taking early CPP will allow you to shelter more of your capital early on, thus enhancing your net worth.

However, if you have no estate concerns, taking late (age 70) CPP can make good sense.

CPP at age 60
CPP at age 70
 

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Of course it makes sense and the numbers prove it.
The federal govt. know this and must have run all kinds of numbers before they made these changes.
That's the whole point.
They want people to delay taking CPP until (a) they can no longer enjoy the money because of old age and poor health or (b) kick the bucket and never get the money.
That way, the tontine scheme can go on and on forever.
 

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They can fiddle with the rules all they want... I'm retiring in my mid 40's and they can't stop me. :)
 

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OK. And from now until you turn 40, you will be dumping $ into the CPP pot, you then die (from boredom or a massive drug overdose) at age 59, and never get to touch that CPP you have been funding. You lose, we win!
 

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I wish we could have the option of taking the commuted value of the CPP.

We already have a couple of DB pensions, but no pile of cash.

A combination of both would be nice..........:D
 

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Judging from the comments on the CBC article, not many people are buying into the plan of staying longer.

Considering the Government eliminated the mandatory retirement age only a couple of years ago, I wonder how long before collecting the CPP early isn't an option anymore.

Also considering the CPP is supposedly fully funded for the next 75 years just as it is presently structured, what is the issue?

Perhaps the Government has cast their greedy eyes on that big pile of cash sitting there? What is the number.........160 Billion in the fund.

That would eliminate the deficit and then some.

Working longer isn't really a remedy for retiring. It defeats the whole purpose.
 

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Like with most things, people listen to US newsmedia and assume that whatever is going on in the US applies to Canada. US Social Security is bankrupt and unsustainable, and huge cuts in benefits are coming.

The CPP was reformed in the '90s and contribution rates increased so that the program would be self-funding for the next 75 years given a ~4% real rate of return. To me, a bigger risk would be medical advances that add 10 or 20 years to average benefit period. If lifespans don't change much, I'm not very concerned about CPP. And because we're doing 75 year actuarial analysis, we should see problems coming before a crisis.

The Federal government can't touch the CPP reserve fund without the agreement of the provinces...
 

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i think people will choose to take it early. they can't wait to get their hands on 'their' easy money. besides, how else are they going to pay for those 35 yr mortgages they took out at age 35?? oh yeah, keep working suckers...
 

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Judging from the comments on the CBC article, not many people are buying into the plan of staying longer.

Considering the Government eliminated the mandatory retirement age only a couple of years ago, I wonder how long before collecting the CPP early isn't an option anymore.

Also considering the CPP is supposedly fully funded for the next 75 years just as it is presently structured, what is the issue?

Perhaps the Government has cast their greedy eyes on that big pile of cash sitting there? What is the number.........160 Billion in the fund.

That would eliminate the deficit and then some.

Working longer isn't really a remedy for retiring. It defeats the whole purpose.
The fund is really mirrors, smoke is all gone, govt needs to figure out how to stop paying people a little at a time. Before 2016, 70 will be the new 65, 0.6% per month will be a projected 1% as the majority ages.
 

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I read this in the Toronto SUN today. (paper given to me for free)

"The changes will mean that anyone who chooses to retire early and begin collecting benefits at 60 will have about $4,000 a year less than if they had retired at 65, the report by the BMO Retirement Institute found. If you stay on the job until 70 payments could be $4,600 a year more, based on maximum CPP payments."

Can anyone explain what exactly has changed from the old rules to these new rules?
I started drawing a reduced pension at 60 instead of 65..in case I didn't
make it. I'll be 65 early next year. Even though the payout is reduced
by a certain percentage a month if you draw at 60 instead of the customary
65..you have drawn X dollars that you paid into over 60 months that you
wouldn't have otherwise received. Factor that into the equation and you
may have infact drawn out what you may have paid into the CPP fund
while working over the 60 months. If they are suggesting 70 as a good
age to draw your CPP, then they are allready worried about the CPP fund
which I heard isn't going to be sustainable based on the number of people
retiring (baby boomers) and the fact that the current investment situation
isn't bringing the returns in that was expected.

So maybe their thinking is ..if more people wait until 70 to draw from it..
more people may not be around to draw from it..and you do know that
upon death, your estate only receives $2500 from the gov't thanking you
for all the money you saved them by not taking the CPP out early.

carverman
 

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I think everyone's different in what their requirements and needs would be. In short, I'm not planning my retirment life with any needs/requirements for the CPP. Having said that, I also plan to work as late as I can, since I love what I do ... but we'll see is that's true in 27 years.
 

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Looks like the CPP is doing quite well, even over the past 5 and 10 year performances.

Interesting that they are moving more into real estate and other long term investments, including the 407 toll road in Ontario.

Smart money managers...........those guys.

All the more reason to build any future supplementary pension plans within the CPP. When you have 168 Billion to play with, you can buy a lot of solid assets.

http://www.moneyville.ca/article/888697--cpp-returns-jump-as-markets-recover
 
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Hey GeniusBoy ... I plan to work for a while too, and what I like about the change for 2012 is the ability to start collecting while working (no more 2 month clause). That's an extra $10K+ or so income and an extra $2K in my pocket for no longer contributing (should I choose not to continue contributing which I will choose). Sure it's taxable but still, a nice raise ~$12K for doing nothing except waiting around till 65 :)
 

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CPP changes 2016

MY OPPINION-who hates this changes must have been playing the game with bad tactics. the game was great before and even better now, even though changes happened i still get 500 000 from artifacts every hour.that was my ensurance. and items in devils dealer have become much cheaper, so i have even more money to spend than before
 

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Personally, I hate work, and I hate taxes.

Thats why I retired when I was under 30. I have lived off my investments for a long time, although I must admit I wasn't too smart at it at first.

I have been doing whatever I want for years and years. This includes sleeping in, playing golf, leisurely lunches, chasing women ( in the past), , and staying out late.

I worked hard early, , and I always believed in saving, and spending less than what I earned...what one would be called cheap for, until recently , when it came back into vouge.
I didnt drink and I didnt smoke, or have any other wastefull and stupid habits.

I live frugally , but well, and have everything I need.

I am now close to 60 in a few years and will prob be taking the little CPP I will get early. Better to get my hands on it soon as possible before some govt moron decides to change the rules.

One thing for self employed people to remember is that once you start collecting CPP, ( at 60).....you no longer have to pay in!!
That can easily save you appr $4200.00 a year, on income over appr $43,000
5 years = $ 21,000 you keep instead of paying CPP till you are 65

Thats about 10 years at $200 youd have to get "extra" to come out even...NOT counting whatever income you could generate with that $4200 a year you get to keep.
( Of course youd pay more income taxes, as you would no longer have the CPP to deduct from income......in our tax system one action ALWAYS causes other unwanted results, so you have to be careful)

Another quick tip:
At age 60 convert $ 10K from your RRSP into a RRIF.......withdraw $2 K a year from the RRIF, take the "pension income tax deduction" thats currently $2 K a year.......and presto...ZERO tax on the $2 K a year.......( federal taxes, that is...youd still pay a small amount of provincial tax..but its still worth it!!)
 
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