Demystifying the Canada and Quebec Pension Plans


[MUSIC PLAYING] NARRATOR: You’ve worked hard for a long time. Now the fruitful retirement chapter is on the
horizon, or perhaps right around the corner. You have great plans. But it helps to know what
funds you can count on. And government pension plans
are part of the equation. For Canadians at or nearing retirement, the
Canada Pension Plan and Quebec Pension Plan may be a bit of a mystery. Have you been faithfully
contributing to one of these plans but don’t know how much you
will receive when you retire? Perhaps you’re contemplating when
to begin drawing a pension income. The good news is, there are options. Your pension is based on your earnings,
and your lowest-earning years are excluded. In fact, under CPP, up to eight
of your lowest-earning years are automatically removed when
calculating your retirement pension. QPP offers a similar dropout provision. You can start collecting a CPP or a
QPP retirement pension as early as 60. However, take your government pension
early and you will receive less. On the other hand, take CPP or QPP
later, and you will receive more. So how do you decide when
to collect CPP or QPP? Consider these questions. Have you stopped working? It generally makes sense to take your
pension early if you have stopped working. Are you single? Because your heirs will only receive
a death benefit of up to $2,500, you may want to take your
pension early to ensure you get as much out of the plan as possible. Are you currently receiving
a survivor’s benefit? When you start taking your retirement pension
may impact the amount of survivor’s pension you receive going forward. Do you have health concerns? If you qualify for a disability
benefit, it’s better to apply for that since it’s higher than
the retirement benefit. Are you healthy? Continuing to work and contribute
instead of taking the pension will increase your retirement pension. There are choices to make
when it comes to CPP or QPP. Get informed. Speak to your advisor about these decisions
so you get the most out of your retirement. [MUSIC PLAYING]

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