Do You Know How Much Canada Pension (CPP) You Will Receive? Canada 150 Recommendation #9

It is possible for you to contact Services Canada and ask for a listing of the CPP premiums that you have contributed as well as the amount of pension that you would receive if you apply to take it at 60 or 65.

The main reason I ask clients to get this information is when they have choices about paying into CPP or not. The most common reason that people can choose not to pay into CPP is if they are business owners and decide to take dividends instead of salary. A dividend is not considered to be earned income and therefore no CPP is payable.

In the case that a business owner has been contributing to CPP for a long time, the incremental benefit of continuing to do so may be small. In this situation, continuing to contribute may not be the best use of their retirement resources and they could switch to taking dividends and stop paying into the plan. CPP is twice as expensive for a self-employed person because they must pay both the employee and the employer portions into the plan.

The decision to take dividends instead of a salary is just the sort of thing that should be discussed with your financial advisor and accountant.

No comments yet.

Leave a Reply

Painless Financial Training Group Inc. with Debi Peverill

Understand Financial Stuff, Painlessly