Retirement Planning Flashcards
CPP
Mandatory who makes more than year’s basic exemption, $3,500
Self employed pay 11.4%
Employee 5.7%, employer 5.7%
Contributory period
Max 52 (age 18-70)
CPP before 65, reduced 0.6% each month (max 36%)
CPP after 65, increased 0.7% each month(42% max)
Below doesn’t contribute CPP
-Migratory worker working less than 25 days per year don’t
-migratory worker making less than $250 per year
-individual making less than $3500
-members of religious order
CPP - Post Retirement Benefitd
Benefit paid to individual who are retired but continue to work and make cpp contribution while receiving cpp
If you are 60-65, working, you must contribute CPP
To be eligible, one must be 60-70, employed and receiving CPP
CPP benefit
25% of contributor’ average monthly pensionable earnings.
Max CPP benefit, average YMPE past 5 years, dividing by 12, multiply by 25%
CPP drop out provision
Drop out at least worst 8 years, upto 65, will be based at best 39 years
CPP at death
Contribution for 1/3 of total number of years in contributory period
But no case less than 3 years
Or at least 10 years
Single payment of $2500
CPP survivor’s pension
65+, receive 60% of deceased contributor’s retirement pension if survivor is not receiving other CPP
Under 65, receive flat rate portion and 37.5% of deceased contributor’s retirement pension if not receiving other CPP
CPP children’ benefit
Surviving child’ benefit, max 2 children
Unmarried dependent child, under 18 or between 18-25 and attending school full time
If child is married, must be attending school full time
CPP sharing
Add together and then divide 50/50
CPP splitting
When relationship ends, cpp pension credit can be divided equally between them. (Built up during the time they lived together)
Pension credit earned during marriage and common law may be split when lived together 12 consecutive months
Must apply with Service Canada, its jot automatic. Mandatory if applied
Calculating split, the first month of year which they started lived together in conjugal relationship and ends the last month of year before the year they started living separate
CPP contribution rate for 2023
5.7 until 2022 for both employee and employer
Going upto 5.95
(1% higher than 2019)
Income replacement level increased from 1/4 to 1/3
Starting 2024, separate contribution rate for earnings above YMPE
4%
OAS
Taxable income
Min 10 years since 18
Min 20 yrs reaching Canada to receive outside of Canada
40 years reaching 18, for full amount
OAS if currently receiving but not lived for 20 years, if you leave country after 6 months of absence, OAS will be suspended. Payment will resume once you are back. OAS never cease immediately
Like cpp, oas can be dealyed until 70
CPP delay 0.7, OAS 0.6
OAS clawback
In 2022, if income exceed $81761, 15% of exceeded amount clawback.
$86912 for 2023
$141917 full clawback
OAS payments from Jan to June, clawback calculated income for 2 yrs ago. OAS pmt from Jul to Dec, clawback calculated from last year
Guaranteed Income Supplement
Eligibility; receive OAS, must be 65, Canadian resident.
Must be applied every year
Tax free payment
Payment is based on marital status and income
Single: $20832보다 작아야 full
Couple: $27552 보다 작아야 full
GIS reduced by 50centd for each $1 earned, however the first $3500 would be exempt from Clawback
Ontario (GIS equivalent)
Guaranteed Annual Income System(GAINS)
Can be provided on top of OAS and GIS
Must be 65, and lived in ON for past 12 months or for total of 20 years since turning 18. Canadian resident for 10 years or more. Receive OAS and GIS.
