What to expect when applying for CPP

What should you expect when applying for CPP (Canada Pension Plan) benefits? As my latest Retired Money column for MoneySense explains, age 64 is not just the age the Beatles ask the question “Will you still need me, will you still feed me?”

It’s also the age when Service Canada can be expected to reach out to you with a letter to your home address, giving you details of how the Government of Canada will feed you with CPP benefits once you turn 65 (or as early as 60 should you choose reduced early benefits).

But fear not, Ottawa will also  still need you, in the form of taxable revenue: like Old Age Security, CPP benefits are fully taxable.

The full piece can be accessed by clicking on the highlighted headline: CPP application: Here’s what to expect during the process.

The piece’s focus is on the actual application process but does touch on the age-old topic of the optimal age to start receiving benefits: which can be anywhere between age 60 and 70. The Hub has tackled this several times in its almost three years of existence. Use the search engine to the right and enter CPP, or click here.

Try the Canadian Retirement Income Calculator

The piece also links to a useful web tool provided by Service Canada: the Canadian Retirement Income Calculator, which you can access by clicking on the highlighted text.

As I note in the MoneySense piece, It’s a bit clunky but visually does a good job of showing your future retirement income sources, including CPP and OAS, plus employer-sponsored plans. If the latter are not inflation-indexed Defined Benefit pensions, you see the eroding impact of inflation as time marches on. By contrast, it shows how CPP and OAS maintain purchasing power as you move into the second decades of retirement and beyond: another reason to delay receipt of benefits till 70 if at all possible, particularly if you don’t have an inflation-indexed DB pension.

Another good resource is the CPP optimizer provided by Doug Dahmer of Burlington, Ont.-based Emeritus Retirement Income Specialist. Dahmer has contributed many “Decumulation articles” to the Hub, such as this one: Better Retirement choices: an elegantly simple solution.

It’s a big decision, so research it carefully! See also the 3 related articles right below this post.

PS How to Declare your Financial Independence

As a related topic, this just came  to my attention. South of the border, Next Avenue’s Richard Eisenberg just posted a blog about me and my efforts to spread the word about Findependence. Richard and I have chatted about this topic in previous Julys, usually close to the American July 4th celebrations. For full blog, click here.

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