Motley Fool: CPP expansion too late for Boomers but a win for their children

My take on this week’s expansion of the Canada Pension Plan just went up at the Motley Fool Canada site: click on the highlighted headline, CPP Expansion too late for Boomers but a Win for their Children.

The blog (which is free to access) goes into more detail but in a nutshell, what it means is that once fully implemented, those who choose to collect CPP benefits at the traditional retirement age of 65 will receive as much as $17,478 a year, compared to $13,110 right now. That assumes someone who has is maxed out on the earnings ceiling (known as the Year’s Maximum Pensionable Earnings or YMPE) on which CPP benefits are calculated: currently $54,900 a year. The many Canadians who earn less than that will receive correspondingly less.

A key feature is that by 2025 this earnings ceiling will rise to $82,700, which means that those earning that kind of money will pay higher premiums but ultimately receive more benefits in retirement. Obviously, those who make less than that will pay lower premiums and receive lower benefits.

This will involve a seven-year phase-in period that begins in 2019, which is why the impact will be negligible for those who are already retired or baby boomers expecting to do so in the next few years. But it will have a dramatic and positive impact on their children, the Millennial generation, as well as the older Generation X.

If you missed my earlier Motley Fool blog on gold, you can find it here. See The New Case for Gold for the Hub version, which includes photos and links to the two main books mentioned. Or click on the Fool’s version directly here.

And you can also find the Hub’s report on last Thursday’s Motley Fool event in Toronto. See Six Rules for Foolish Investing, as Fools visit Canada.