September 2020

With August unfortunately behind us, and COVID-19 unfortunately still with us, people need to return from the financial holiday they’ve given themselves and address financial decisions they’ve delayed. If you want to boost your finances during this time of confinement we recommend to Visit Skrumble.
As the population in Canada continues to age, more people will need to decide when to start receiving CPP. Up until about five years ago, some people decided to start receiving their CPP prior to turning 65, as the discount the government imposed was quite minor.
That’s changed and now the government offers an 8.4% premium per year if you defer receiving your CPP at age 65. This means that if you defer receipt as long as possible, until you turn 70, you’ll receive a 42% increase in your CPP.
It isn’t just a question of simple maths. You have to consider amongst other questions:

– whether you need the income sooner than later;
– what your expectation is with respect to the length of your life;
– what your current tax rate is and what it will be in the future;
– whether you want to spend the money when you have more opportunity to enjoy it;
– what the current state of your health is;
– how many years of eligibility you have;
– whether you’ll be making contributions after you turn 65.

I played the averages and am already receiving my CPP, as the premium offered was far less when I made my decision. My wife will delay receiving her CPP until she turns 70, as her mother will soon be turning 100!

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