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Thread: Getting CPP and working: would you do this?

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    Mastermind Shwa Girl's Avatar
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    My coworker turned 60. When we were having a birthday celebration my coworker said that they were working to 65 but have applied to collect Canada Pension Plan? Does anybody else do this? Does the government claw back money if you make too much $$$ working and collecting CPP?
    Thx.
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    Last edited by Shwa Girl; Sat, Mar 31st, 2018 at 10:47 AM.
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    Smartie Canuck greentires4me's Avatar
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    Yes I believe they claw back itís like 15k a year.


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    Mastermind Shwa Girl's Avatar
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    Quote Originally Posted by greentires4me View Post
    Yes I believe they claw back itís like 15k a year.


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    Thanks. I admire this coworker- very wise. My coworker was working full time up to the birthday and then changed to working 4 days per week.
    Do you know if the claw back goes to zero when my coworker went to a 4 day work week?
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    My husband will be 67 in a few weeks. Last fall he applied for pension, and got back payments from when he was 65. I haven't done his taxes yet, so not sure how it affects it. However, his circumstances were different last year, he was off on short-term disability for a time, so basically had only worked full-time for six months or so.
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    Must Coupon, Must Save :) SassyAshley's Avatar
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    My understanding is it all depends on how much you make per year. It is like any government pay out (pay out may not be the right word but cannot think of the word I want right now) you are allowed to make a certain amount of money on top of what you are being paid but if you exceed that amount then there is a claw back.

    It would be the same as anyone on Mat Leave, Disability or even Welfare, they can earn a certain amount but if they exceed there will be a claw back.

    I believe my Mom has a co worker doing this and she went from Full Time to Part Time but even at Part Time she will only work so many hours a week. So when most Part Time Staff get extra hours during Peak Season she will not increase her hours and turn down shifts extra if given.
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    Smart Canuck
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    Canada Pension Plan (CPP) is not clawed back. Old Age Security (OAS) is. You have contributed to your CPP and your payout depends on your contributions. CPP will be taxed but not clawed back.
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    Mastermind Shwa Girl's Avatar
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    thanks everyone
    I knew this was the place to ask this question
    So many Smart Canuckers with so many smart $$$ money ideas
    wtg
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    .
    Last edited by super807; Wed, Apr 4th, 2018 at 09:54 AM.
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    Senior Canuck Arjon's Avatar
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    Since it hasn't been mentioned, people who opt to start receiving CPP before they turn 65 receive less per month than they would if they waited until 65. Don't quote me, but I seem to recall having read somewhere that based on actuarial tables, it's slightly disadvantageous to start before 65, granted I don't know if this is currently so.
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    Mastermind Natalka's Avatar
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    Arjon, that's true, one does get less if you take it early.
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    Smartie Canuck greentires4me's Avatar
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    My dad took it at 57 and with his work retirement plan was set for numerous years. After putting in 35 years at a company.
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    As mentioned, CPP is not clawed back, just OAS. However, if you collect CPP while working, that could put you in a different tax bracket, which I'd consider a form of clawback.

    And yes, you do get less money by taking it early, but if you take that money and invest it back into an RRSP/TFSA, it could work out to your benefit, plus you'd negate the tax issue I mentioned above.

    It's not my strength, but my friend Jim Yih has tonnes of info on CPP over at RetireHappy.ca and Doug Runchey answers most questions posted.
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    Quote Originally Posted by Arjon View Post
    Since it hasn't been mentioned, people who opt to start receiving CPP before they turn 65 receive less per month than they would if they waited until 65. Don't quote me, but I seem to recall having read somewhere that based on actuarial tables, it's slightly disadvantageous to start before 65, granted I don't know if this is currently so.
    Quote Originally Posted by Natalka View Post
    Arjon, that's true, one does get less if you take it early.
    This was a huge topic at my work too, to take it early or not?
    Read this analogy to see what the break even point is. ( this article was updated in 2015 )

    What is the mathematical break-even point?

    Under the old rules, the decision to collect CPP early was really based on a mathematical calculation of the break-even point. Before 2012, this break-even point was age 77. With the new rules, every Canadian needs to understand the math. Hereís the example of twins that I used before, with the break-even point updated to 2015 values.

    ďJanet and Beth are twins. Letís assume they both qualify for the same CPP of $502 per month at age 65. Letís further assume, Beth decides to take CPP now at age 60 at a reduced amount while Janet decides she wants to wait till 65 because she will get more income by deferring the income for 5 years.
    Under Canada Pension Plan benefits, Beth can take income at age 60 based on a reduction factor of 0.58% for each month prior to her 65th birthday. Thus Bethís benefit will be reduced by 34.8% (0.58% x 60 months) for a monthly income of $327.30 starting on her 60th birthday.
    Letís fast forward 5 years. Now, Beth and Janet are both 65. Over the last 5 years, Beth has collected $327.30 per month totaling $19,638. In other words, Beth has made $19,638 before Janet has collected a single CPP cheque. That being said, Janet is now going to get $502 per month for CPP or $174.70 per month more than Bethís $327.30. The question is how many months does Janet need to collect more pension than Beth to make up the $19,638 Beth is ahead? It will take Janet 113 months to make up the $19,638 at $174.70 per month. In other words, before age 74.4, Beth is ahead of Janet and after age 74.4, Janet is ahead of Beth.Ē

    https://retirehappy.ca/four-reasons-...st-2011-rules/

    I suppose it depends on your health and your " luck " . If you are darn tootin sure you will live a long life then wait to collect it at 65, if your health is questionable and you believe in Murphy's Law then draw it at 60.
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    Quote Originally Posted by Arjon View Post
    Since it hasn't been mentioned, people who opt to start receiving CPP before they turn 65 receive less per month than they would if they waited until 65. Don't quote me, but I seem to recall having read somewhere that based on actuarial tables, it's slightly disadvantageous to start before 65, granted I don't know if this is currently so.
    I am going to quote you...LOL.

    First thing to remember CPP is your money. You are getting back the contributions made by/for you. Yes, actuarial tables are used to pay it back.

    So it should be self evident is you collect earlier you will collect longer, therefore less per month. Also if you stop contributing that there is less for you to receive.

    People has different factors, longevity, pension plans, disability, inheritances, etc... and for tax reasons and financial planning CPP is one of the items that needs to be considered in the big picture.
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    Dancing bean paste bun Ciel's Avatar
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    Last year at a talk about retirement and pensions, one attendee realized she should have waited a little longer to apply for her pension (she applied at her girlfriend's urging) but she had just submitted her application and realized during the talk that she had not considered the implications. The presenter told her she cannot undo the application as it effectively starts her pension claim.

    Another attendee made remarks about moving to northern Ontario where she could apply and receive energy tax credits and live a little easier financially but less socially (less things to do) as she found Hamilton living expenses more than she could cover with her income.
    Last edited by Ciel; Wed, Apr 4th, 2018 at 03:09 PM.
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