Easy Money Most Canadians Miss

Written by Doug Dahmer  |  September 30, 2015

Canada Pension Plan. You’ve earned it, got it coming to you and boy are you going to get it… or at least some of it. That’s the crazy part. Many Canadians will inadvertently pass up well over $100,000 of their CPP entitlement by not paying attention to when they start to draw their benefits.iStock_000038238254_Large

Here are 5 things you really need to know about your CPP Benefit:

1. Most People Underestimate the Impact of CPP

Your CPP benefits are a big deal. For a couple, where both spouses have regularly contributed to the CPP plan, the lifetime CPP income they can anticipate will likely exceed $700,000. Consequently, it represents an important strategic contributor to the creation of a sustainable retirement income.

2. Conventional Wisdom is Dangerously Outdated

The difference between the best time for you to start your CPP and the worst time can be over $100,000. No kidding. (In a second, I am going to show you how to check your differential.) The CPP rules changed, effective 2013, and everything everybody ever thought they knew about starting CPP benefits needs to be thrown out the window. When it comes to CPP ‘that was then …this is now.’ Those who choose to rely on dangerous and outdated conventional wisdom will have the rest of their lives to look back in regret.

3. Don’t Overlook the Survivor Benefit

Previous generations grew accustomed to simply starting their CPP as soon as their employment years ended. After all, the sooner you started, the longer you collected, and the more you were likely to receive.

Don’t get me wrong longevity continues to be a very important variable when determining each of your optimal start dates. While none of us knows, with certainty, how long we will live, it is definitively beneficial to make an educated guess as part of the optimization process. This is particularly relevant, if you anticipate a long interval where a surviving spouse will be left fending for them self.

In these situations, the complex rules relating to the amount a surviving spouse is entitled to, becomes extremely significant.

4. Getting the Right Answer is not Easy!

Attempting to determine your optimal CPP start dates on your own is not simple.  As an individual, each of us has a total of 121 possible start dates (each month between reaching age 60 through age 70 inclusive.) As couple, each of you have the same number of choices. However, when you look at the number of combinations and permutations of a couple, the number of complicated mathematical calculations that need to be completed, explodes into a whopping 14,641 choices with the added implications of the survivor benefit. The right answer requires a full comprehensive analysis.

5. The Right Tool gets you the Right Answer

To get your right answer, visit www.cppoptimizer.com

You will be asked to provide 3 pieces of information:

  • Your birthdate(s),
  • A best guess estimate of how long you think you will live,
  • Your projection of what percentage of the maximum annual CPP benefit, you will be entitled to.

Load the data and the automated algorithm within the online tool will provide you with the financial differential between the best time to start and the worst time. Be prepare to be shocked by the difference. Don’t you want to know how much money you risk leaving on the table?

Believe me, CPP is easy money when you have access to the right tools and advice to make the right decisions.

In a world where many things are beyond our control, here is something that is totally in our control. Be informed, be smart and put the most money possible in your pocket.

I am pretty sure it will be the easiest money you didn’t pass up.

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