Any questions about CPP?

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.
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Dogger1953
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Any questions about CPP?

Post by Dogger1953 » 04 Mar 2013 21:29

I have over 32 years of experience working with CPP. Let me know if you have any questions. :thumbsup:
DR Pensions Consulting (http://www.DRpensions.ca)

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ghariton
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Re: Any questions about CPP?

Post by ghariton » 04 Mar 2013 23:18

Welcome to FWF.

We always greatly appreciate posters who have knowledge to contribute, and who are willing to help others.

(Of course, we also appreciate those who come here to learn and to exchange views.)

George
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kcowan
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Re: Any questions about CPP?

Post by kcowan » 05 Mar 2013 09:08

Ditto welcome.

Would you mind checking our finiki (see link at the top) to confirm that it is complete re the CPP options.
Thanks...Keith
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adrian2
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Re: Any questions about CPP?

Post by adrian2 » 05 Mar 2013 09:10

Welcome to the forum, Dogger1953!
Imagefiniki, the Canadian financial wiki
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flywaysuzy
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Re: Any questions about CPP?

Post by flywaysuzy » 05 Mar 2013 11:22

Welcome! My question pertains to how cpp benefits could be affected by neglecting to obtain a divorce. Two friends have never bothered to get one, even though they have each been in common-law relationships with other people for the last 15 years or more. If your spouse dies, could you apply for survivor benefits if you were legally married to someone else? Or if your spouse dies and they were married to someone else, it would be hard to imagine you would qualify for benefits...

Any experience along these lines?

Thanks,
suzy

Dogger1953
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Re: Any questions about CPP?

Post by Dogger1953 » 05 Mar 2013 11:27

kcowan wrote:Ditto welcome.

Would you mind checking our finiki (see link at the top) to confirm that it is complete re the CPP options.
Thanks...Keith
Keith

Finiki looks pretty good. Well laid and and mostly weblinks, which helps to keep the information up-to-date. The exception is around survivor benefits. Rates are included on the main page, but they're from 2009. Might be better to leave rates off this page for all benefits, and rely on your link to rates later on the page. A further exception might be for the death benefit. You indicate that it's always $2,500, which it isn't. $2,500 is the fixed maximum, but the amount is really 6 times the calculated retirement pension, up to that maximum amount.
DR Pensions Consulting (http://www.DRpensions.ca)

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kcowan
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Re: Any questions about CPP?

Post by kcowan » 05 Mar 2013 12:19

Suzy
I am pretty sure that their legal separation agreement outlines all the lingering obligations of their former relationship. Of course it could be tested in the courts like any other agreement. IMHO

Dogger
Thanks for the suggestions.
For the fun of it...Keith

Dogger1953
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Re: Any questions about CPP?

Post by Dogger1953 » 05 Mar 2013 15:34

flywaysuzy wrote:Welcome! My question pertains to how cpp benefits could be affected by neglecting to obtain a divorce. Two friends have never bothered to get one, even though they have each been in common-law relationships with other people for the last 15 years or more. If your spouse dies, could you apply for survivor benefits if you were legally married to someone else? Or if your spouse dies and they were married to someone else, it would be hard to imagine you would qualify for benefits...

Any experience along these lines?

Thanks,
Suzy
Neglecting to obtain a divorce would entitle the separated legal spouse to qualify for CPP survivor's benefits, IF and only IF, there is no valid common-law spouse at the time of death. I'm not sure if I fully understand the 2nd part of your question, as you wouldn't be able to legally marry someone if you were still married to someone else, would you?
DR Pensions Consulting (http://www.DRpensions.ca)

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adrian2
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Re: Any questions about CPP?

Post by adrian2 » 05 Mar 2013 15:52

Dogger1953 wrote:A further exception might be for the death benefit. You indicate that it's always $2,500, which it isn't. $2,500 is the fixed maximum, but the amount is really 6 times the calculated retirement pension, up to that maximum amount.
Fixed that (without going into too much detail).

Thank you.

BTW, it's easy to become a finiki editor, should you wish to become one.
Imagefiniki, the Canadian financial wiki
“It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong.” [Richard P. Feynman, Nobel prize winner]

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kcowan
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Re: Any questions about CPP?

Post by kcowan » 05 Mar 2013 16:37

adrian2 wrote:Fixed that (without going into too much detail).
Thank you.

BTW, it's easy to become a finiki editor, should you wish to become one.
Thanks adrian. But let's enable Dogger to walk before he runs! :thumbsup:
For the fun of it...Keith

Dogger1953
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Re: Any questions about CPP?

Post by Dogger1953 » 05 Mar 2013 17:19

kcowan wrote:
adrian2 wrote:Fixed that (without going into too much detail).
Thank you.

BTW, it's easy to become a finiki editor, should you wish to become one.
Thanks adrian. But let's enable Dogger to walk before he runs! :thumbsup:
Works for me! :D
DR Pensions Consulting (http://www.DRpensions.ca)

flywaysuzy
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Re: Any questions about CPP?

Post by flywaysuzy » 06 Mar 2013 18:19

So, maybe the question is if you can even be the common- law spouse of your current partner if you are still legally married (with no separation agreement) to someone else, or if you can't ?

I will continue to advocate for the divorce, as it would seem to be $1500 well spent at this point...
suzy

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poedin
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Re: Any questions about CPP?

Post by poedin » 06 Mar 2013 19:46

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Last edited by poedin on 06 Mar 2013 20:32, edited 1 time in total.

Dogger1953
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Re: Any questions about CPP?

Post by Dogger1953 » 06 Mar 2013 20:22

flywaysuzy wrote:So, maybe the question is if you can even be the common- law spouse of your current partner if you are still legally married (with no separation agreement) to someone else, or if you can't ?

I will continue to advocate for the divorce, as it would seem to be $1500 well spent at this point...
Suzy

Yes, you can definitely be a valid common-law spouse, regardless whether you are still legally married or not. A long time ago (perhaps as much as 20 yrs ago?), the CPP survivor benefit favoured the legal spouse, and the common-law relationship had to be very solid and very long (as much as 7 yrs at one time), in order to replace the legal spouse for survivor benefit eligibility. That switched many years ago, and the legilsation definitely favours the common-law spouse now.

Here is a direct quote from the current legislation, that determines who is considered a survivor for CPP benefit purposes:
“survivor”, in relation to a deceased contributor, means
(a) if there is no person described in paragraph (b), a person who was married to the contributor at the time of the contributor’s death, or
(b) a person who was the common-law partner of the contributor at the time of the contributor’s death;

And here is a 2nd quote that defines who is a valid common-law partner:
“common-law partner”, in relation to a contributor, means a person who is cohabiting with the contributor in a conjugal relationship at the relevant time, having so cohabited with the contributor for a continuous period of at least one year. For greater certainty, in the case of a contributor’s death, the “relevant time” means the time of the contributor’s death.
DR Pensions Consulting (http://www.DRpensions.ca)

brucecohen
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Re: Any questions about CPP?

Post by brucecohen » 06 Mar 2013 20:28

flywaysuzy wrote:So, maybe the question is if you can even be the common- law spouse of your current partner if you are still legally married (with no separation agreement) to someone else, or if you can't ?
You can. Many years ago a lawyer presented a paper called Fiscal Bigamy at the Canadian Tax Foundation's conference. He explained that federal and provincial statutes set different criteria and it was quite possible for provincial family law to differ from federal tax law and other legislation.
I will continue to advocate for the divorce, as it would seem to be $1500 well spent at this point...
Formal divorce is surely a good idea and, if uncontested, can even be DIYed for a lot less than $1500.

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Re: Any questions about CPP?

Post by brucecohen » 06 Mar 2013 20:50

poedin wrote: From personal experiences: if you are still legally married, then according to CRA, CPP survivor benefits will be applicable to the surviving (married) spouse on record and not to one's current "common-in-law" partner (who for CRA doesn't exist).
Did your personal experience predate the federal govt's recognition of common-law partners for income tax and CPP/OAS purposes? For example, Here is what the ServiceCanada website says about the CPP death benefit:
Your legal spouse or common-law partner at the time of your death is eligible for a CPP survivor's pension. If you are separated, your spouse or common-law partner may be eligible for the pension if you were not cohabitating with a different common-law partner for a continuous period of at least one year at the time of your death.

ISTM this indicates the person you were living with at time of death gets the money if you two had been together for at least one year. That's even if there's a long line of previous partners, including a formally married spouse.
The same goes for any registered accounts (beneficiary = married spouse)
No. Your RRSP/RRIF beneficiary is whomever you name. A common-law spouse who meets the CRA definition -- generally 12 months in a conjugal relationship -- is a qualified beneficiary.
and any "joint" accounts and assets.
No. Taxation of a joint account is based on the extent to which one, the other, or both owners provided the funding. You can have a joint account with anyone -- for example, many elderly people have joint accounts with an adult child.
this can be very complicated
It's horrendously complicated. For example, if no kids are involved, the Income Tax Act gives cohabiting couples common-law status after 12 months together, but Ontario's family law does that only after three years together.

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poedin
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Re: Any questions about CPP?

Post by poedin » 06 Mar 2013 21:15

My personal experiences deal with the estate of my birth father, a step-mother, siblings (birth, half-, step-, and adopted) and others.
The legal advice given and the execution of related government and private pension benefits (in the last five years and the disposition of registered accounts) seems wrong. On the other hand it's mute since they have both recently passed away and I would rather wash my hands of it and get on with life. Unfortunately it's not that easy. I apologise for any misinformation, hence the request for others to add to the discussion.

flywaysuzy
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Re: Any questions about CPP?

Post by flywaysuzy » 08 Mar 2013 10:43

Thanks for the information everybody. The link Bruce put up has two BC choices for DIY divorce, anybody know if a joint or sole one is any easier than the other? $39 for a divorce seems like a very good deal, especially considering the peace of mind factor...
suzy

dns902
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Re: Any questions about CPP?

Post by dns902 » 12 Mar 2013 13:09

My question revolves around my ignorance of how employment post-65 factors into things. Here is my situation: Immigrated to Canada age 31. Paid max CPP contributions from then (age 31) to now (age 68) and continuing. If I retire say at end of this year (age 69) what will be my CPP if I draw it starting at the beginning of next year? Thank you in advance.

Dogger1953
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Re: Any questions about CPP?

Post by Dogger1953 » 12 Mar 2013 16:19

dns902 wrote:My question revolves around my ignorance of how employment post-65 factors into things. Here is my situation: Immigrated to Canada age 31. Paid max CPP contributions from then (age 31) to now (age 68) and continuing. If I retire say at end of this year (age 69) what will be my CPP if I draw it starting at the beginning of next year? Thank you in advance.
The best that I can do is estimate, unless you want to email me a copy of your CPP statement of contributions to DRpensions@shaw.ca.

For estimating, you currently have 37 years of max contributions and should be eligible right now for a calculated CPP of approx $1,187.42 per month. If you wait until you're 69 to apply, you will have 38 years of max contributions and your benefit should increase to about $1,301.33 per month. Looking just at these numbers, you could receive approx $14,249.04 in benefits over the next 12 months, or wait to receive approx $113.91 more starting next year. That would take you approx 125 mths or 10.4 yrs to make up the difference, so that if you live longer than 79.4 yrs, you will be ahead by waiting.

One other factor to consider though, is that if you apply now you can stop contributing to CPP (or not), and thereby save an additional amount of $2,356.20. If you add that amount to your breakeven age above, you wouldn't breakeven for another 21 mths, or until about age 81.

BTW, have you applied for the Old Age Security yet, or are you waiting on that too?
DR Pensions Consulting (http://www.DRpensions.ca)

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Re: Any questions about CPP?

Post by deaddog » 12 Mar 2013 18:24

I have a question regarding survivor benefits.

My wife at 62 is 6 yrs younger than I am. We both took CCP at 60. Max allowed or very close to it.
At present combined CCP is about $1300/mo. How much would the wife receive if I was to die?
Most of our so-called reasoning consists of finding arguments for going on believing as we already do.( J.H. Robinson)

Dogger1953
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Re: Any questions about CPP?

Post by Dogger1953 » 12 Mar 2013 18:40

deaddog wrote:I have a question regarding survivor benefits.

My wife at 62 is 6 yrs younger than I am. We both took CCP at 60. Max allowed or very close to it.
At present combined CCP is about $1300/mo. How much would the wife receive if I was to die?
Deaddog - It's a bit of a complex calculation, and it would help if I knew what your individual amounts are. I could use $650 for each of you if you want me to, but it's sortof like GIGO. The more accurate the data is, the more accurate my estimates will be!
DR Pensions Consulting (http://www.DRpensions.ca)

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deaddog
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Re: Any questions about CPP?

Post by deaddog » 12 Mar 2013 21:53

Dogger1953 wrote:
deaddog wrote:I have a question regarding survivor benefits.

My wife at 62 is 6 yrs younger than I am. We both took CCP at 60. Max allowed or very close to it.
At present combined CCP is about $1300/mo. How much would the wife receive if I was to die?
Deaddog - It's a bit of a complex calculation, and it would help if I knew what your individual amounts are. I could use $650 for each of you if you want me to, but it's sortof like GIGO. The more accurate the data is, the more accurate my estimates will be!
650 each is close enough.

Thanks
Most of our so-called reasoning consists of finding arguments for going on believing as we already do.( J.H. Robinson)

Dogger1953
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Re: Any questions about CPP?

Post by Dogger1953 » 13 Mar 2013 11:46

deaddog wrote:
Dogger1953 wrote:
deaddog wrote:I have a question regarding survivor benefits.

My wife at 62 is 6 yrs younger than I am. We both took CCP at 60. Max allowed or very close to it.
At present combined CCP is about $1300/mo. How much would the wife receive if I was to die?
Deaddog - It's a bit of a complex calculation, and it would help if I knew what your individual amounts are. I could use $650 for each of you if you want me to, but it's sortof like GIGO. The more accurate the data is, the more accurate my estimates will be!
650 each is close enough.

Thanks
If you die while she's under age 65, she should receive a combined retirement/survivor benefit of approx $990.16. When she reaches age 65 (or if you die after she's 65), it will be reduced to approx $875.89.
DR Pensions Consulting (http://www.DRpensions.ca)

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Re: Any questions about CPP?

Post by deaddog » 13 Mar 2013 15:45

Dogger1953 wrote:
If you die while she's under age 65, she should receive a combined retirement/survivor benefit of approx $990.16. When she reaches age 65 (or if you die after she's 65), it will be reduced to approx $875.89.
Thank you for that info.
It hadn’t crossed my mind before but it means about a $1000 cut in monthly income when you factor in the reduced CCP and no OAS.
Most of our so-called reasoning consists of finding arguments for going on believing as we already do.( J.H. Robinson)

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