*Retirement Planning

Question 1

2021 CPP contribution rates

Answer 1

5. 45% for personal

10. 9% for business

Question 2

CPP monthly reduction rate

Answer 2

0.6% per month

Max 36% at age 60

Question 3

CPP monthly increase rate

Answer 3

0.7% per month

Max 42% at age 70

Question 4

CPP Assignment Percent formula

Answer 4

= # of years married/lived together / # of years contributing to CPP

Question 5

CPP Assignable amount formula

Answer 5

CPP amount for spouse 1 x Assignment percent

Question 6

CPP survivors pension for age 65 +

Answer 6

60% of CPP up to max of $1203/month (combined)

Question 7

CPP survivors pension for age 45- 64

Answer 7

Flat rate portion + 37.5% of contributor’s retirement pension
maximum $650.72

Question 8

Maximum CPP

Answer 8

$1203.75

Question 9

Post retirement benefit (at age 65) maximum

Answer 9

$30.09

Question 10

Maximum Disability benefit

Answer 10

$1413.66

Question 11

CPP for children of deceased

Answer 11

$257.58

Question 12

Maximum survivors and disability pension combined

Answer 12

$1413.66

Question 13

Max survivor CPP benefit for 35 and under

Answer 13

nothing until age 65 or until disabled

Question 14

Maximum OAS Amount

Answer 14

$618.45

Question 15

Residency- When pensioner lives in Canada for 20+ years after age 18 and moves out of Canada.
Will they receive OAS still?

Answer 15

Yes

Question 16

OAS Clawback threshold amount

Answer 16

$79845

Question 17

Maximum annual money purchase plan limit

Answer 17

$29210

Question 18

Maximum annual defined benefit pension limit

Answer 18

$3245.56 (1/9 of Money purchase limit)

Question 19

RRSP annual contribution limit

Answer 19

$27830

Question 20

DPSP annual contribution limit

Answer 20

$14605 (half of MP limit)

Question 21

YMPE limit

Answer 21

$61600

Question 22

RESP CESG

Answer 22

20% on first $2500 as of 2007+, max $500

20% on first $2000 between 1998- 2006, max $400

Question 23

RESP Additional/Enhanced CESG

Answer 23

Income < $49020 = 40% on first $500 max on $2500 =$600
Income between $49020- $98040 30% on first $500, max on $2500 is $550
Income > $98040 - $0

Question 24

Qualifying factor (Age Factor or Rule 85 )

Answer 24

Age of early retirement = (qualifying factor + age when joined RPP) / 2

Question 25

What’s not included in earned income for calculating RSP contribution room?

Answer 25

EI, property income (other than rental), taxable capital gain, scholarships/bursaries, business income from limited partnership, RIF, RSP, RPP, OAS, CPP, Death benefits, workers compensation, dividend income, interest income

Question 26

Retirement allowance

Answer 26

$2000 per year of service before 1996

$1500 per year of service not part of pension before 1989

Question 27

Max withdrawal for FTHB

Answer 27

$35000

Question 28

HBP repayment

Answer 28

15 years starting 2 years from year of withdrawal

Question 29

What’s a qualified RIF?

Answer 29

RIF created before 1992

Question 30

What’s a non-qualified RIF?

Answer 30

Created after 1993

Question 31

Minimum RIF calculation for qualified RIF prior to age 79 & Non qualified RIF prior age 71

Answer 31

1 / (90 - age)

Question 32

What happens to a RSP upon annuitants death and beneficiary is either spouse or dependent child?

Answer 32

Roll over provision allows it to transfer as is to the spouse or dependent child/grandchild.
The amount is not included in income for final taxation.

Question 33

Advantages to commuting a pension

Answer 33

1. greater flexibility of income stream and ability to unlock 50%
2. Protection against a company’s uncertain future
3. Remaining balance rolls over to spouse
4. Invested the way you want and could potentially increase income benefit

Question 34

Disadvantages of commuting a pension

Answer 34

1. outlive the money
2. Portion transferred into LIRA exceeds tax deferred amount and the rest is paid in cash and taxed at MTF
3. Poor investment performance can result in lower income amount

Question 35

Yearly Base Income exemption (YBE)

Answer 35

$3500

Question 36

How do you calculate CPP disability benefits

Answer 36

a flat rate ($510.85) amount plus 75% of CPP up to the max CPP disability amount

Question 37

CPP disability flat rate amount

Answer 37

$510.85

Question 38

How long do you have to contribute towards CPP to qualify for it?

Answer 38

10 years

Question 39

How to calculate pension adjustments for DB Pension plans?

Answer 39

For 1997 onwards: = (9 x benefit entitlement) - $600
Prior to 1997 = (9 x benefit entitlement) -$1000

Benefit entitlement = current pensionable earnings x defined unit percentage

Question 40

Pension Adjustments for DPSP

Answer 40

The amount the employer has contributed

Question 41

PA for Defined Contribution plans

Answer 41

Add contributions of both employer and employee

Question 42

Fully clawed back OAS threshold

Answer 42

$126058

Question 43

clawback percent when over minimum threshold

Answer 43

15%

Question 44

RSP Contribution limit

Answer 44

last year income x 18%
plus carryforward
less Pension adjustment / past service PA
plus pension reversal