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Old 07-30-2016, 06:54 PM
 
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Hello there!

I live in the US with my family and I'm starting my career a bit late (started it in my mid 30's) and so I have not saved much for retirement yet. In the US we have a 401 account. I'm the bread winner with a wife(stay at home) and kids. I was wondering how do Canadians retire? Do you guys have pensions or is it like our 401 (where you basically get whatever you put in it by the time you retire from your job)? Thanks!
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Old 07-31-2016, 04:36 AM
 
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Your 401s are similar to our RRSPs,=
https://en.wikipedia.org/wiki/Regist...t_Savings_Plan

Here in Quebec at 60 you are entitled to your Quebec pension that comes in at about $550 a month at 65 you can claim your federal old age pension which also comes in at about $500-$600 per month and there are many companies and unions that give private pensions along with the government options.
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Old 07-31-2016, 05:54 AM
 
Location: Toronto, Ontario, Canada.
2,540 posts, read 3,268,413 times
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Just to point out...


The Canada Pension Plan is a plan where both the employee and the employer contribute, based on the amount of the income in that pay period. AND how long the person has made contributions ( years ).


The Old Age Pension is a non contributory pension, meaning that even if a person has never paid taxes in Canada, they are still entitled to it, if they are a citizen of Canada. Underline the word citizen. A stay at home Mother, who never worked outside of the home, would be an example.


Many employees also contribute a separate pension fund, lodged with the employer. This is common in union work places. The pay out is controlled by the rules that are set down by the union contract. Such a pension is over and above any Government pension that may be given.


The RRSP is a long term plan to contribute funds toward retirement. The yearly investment is "tax sheltered " so it is a way to reduce the amount owed on income tax in the working time period . BUT when the person gets to the magic age, where they begin to collect on that RRSP, they are subject to tax. The secret is to time the point at which you start drawing RRSP benefits, so that your actual annual income ( because you are now fully retired) is lower.


Those who complain about being "poor in old age " are those who didn't listen to the advice of those who are professionals in financial planning.


Jim B.
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Old 07-31-2016, 06:16 AM
 
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There's a good list of the types of registered investment plans for retirees here:

https://www.desjardinslifeinsurance....gistered-plans

There are some other types of registered plans that workers can contribute to via their employers, somewhat like pension savings (PRPP, RPP). And you can always make investments in other ways, instead of through a registered retirement savings plan. Depends upon how you want to invest.

If you belong to a union, then you'd likely have a pension of some kind --but that's not guaranteed. Some unionized employers have RRSPs set up, etc...
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Old 07-31-2016, 08:15 AM
 
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Two distinct types of employee pensions were common until more recently.

Defined benefit plan: Employer and Union/employee have an agreement whereupon payroll contributions and employer matching amounts are made to a fund that invests the money under government prescribed protocols, benefit derived is determined by a formula using factors such as but not limited to years of service in the plan, maximum earnings for a period of time prior to eligible retirement age and your age at retirement. This type of plan is falling out of favour due to employer assuming full risk for investment strategy and periodically being required to make up for any shortfalls in that strategy as determined by routine required actuarial assessments of the plans ability to pay members demographically determined required benefits.

The other type is a money purchase plan where the employee and the employer agree to inject a certain amount into a purchase investment such as an RRSP fund and whatever the fund yields as share value at time of retirement is what your receive as a pension after conversion.
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Old 07-31-2016, 12:27 PM
 
Location: Vancouver
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Quote:
Originally Posted by jambo101 View Post
Your 401s are similar to our RRSPs,=
https://en.wikipedia.org/wiki/Regist...t_Savings_Plan

Here in Quebec at 60 you are entitled to your Quebec pension that comes in at about $550 a month at 65 you can claim your federal old age pension which also comes in at about $500-$600 per month and there are many companies and unions that give private pensions along with the government options.
CPP maximum is $1,092....I'm eligible at todays max for just over $900 I believe. That is IF if I collect it at 65.
With CPP you can also collect early at 60 at a reduced rate, or delay it up up to 70 years of age, with an increased in the rate.
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Old 07-31-2016, 12:36 PM
 
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Quote:
Originally Posted by BruSan View Post
Two distinct types of employee pensions were common until more recently.

Defined benefit plan: Employer and Union/employee have an agreement whereupon payroll contributions and employer matching amounts are made to a fund that invests the money under government prescribed protocols, benefit derived is determined by a formula using factors such as but not limited to years of service in the plan, maximum earnings for a period of time prior to eligible retirement age and your age at retirement. This type of plan is falling out of favour due to employer assuming full risk for investment strategy and periodically being required to make up for any shortfalls in that strategy as determined by routine required actuarial assessments of the plans ability to pay members demographically determined required benefits.
Well, "defined benefit" pension plans have a larger share of the contributions made by the employer. A "defined contribution" pension plan has a larger share of the contributions made by the employees. Defined benefit plans are replacing defined contribution plans. The fact that people are living longer in retirement is making defined benefit plans less tenable for employers. Someone could work 30 years, retire at full pension, and live for another 40 years. Basic math says that isn't realistic.... so employees are now being asked to kick in more.
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Old 07-31-2016, 07:22 PM
 
5,097 posts, read 2,483,020 times
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Quote:
Originally Posted by Natnasci View Post
CPP maximum is $1,092....I'm eligible at todays max for just over $900 I believe. That is IF if I collect it at 65.
With CPP you can also collect early at 60 at a reduced rate, or delay it up up to 70 years of age, with an increased in the rate.
That is obviously not enough to live on. Senior's homes cost $5-6000 per month. Without a work based pension plan, how do people survive in their golden years?
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Old 07-31-2016, 07:57 PM
 
3,431 posts, read 3,044,150 times
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Quote:
Originally Posted by Lieneke View Post
That is obviously not enough to live on. Senior's homes cost $5-6000 per month. Without a work based pension plan, how do people survive in their golden years?
Many seniors have it very, very tough. There's always a shortage of affordable small apartments suitable for seniors in big cities.

If they need to live in a nursing home, and they're without any funds at all, then the province picks up the cost of the care.
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Old 07-31-2016, 08:08 PM
 
5,097 posts, read 2,483,020 times
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Quote:
Originally Posted by Ottawa2011 View Post
Many seniors have it very, very tough. There's always a shortage of affordable small apartments suitable for seniors in big cities.

If they need to live in a nursing home, and they're without any funds at all, then the province picks up the cost of the care.
Exactly - many seniors are unable to continue living at the standard of living that they enjoyed throughout their lives.

Why are there no senior's home where the cost for a single room with one daily hot meal in a well balanced facility is consistent with what the government deems appropriate income for a senior? It seems like senior's homes are preying on the income of successful seniors - calculating that $5000/month is $60k per year, and after 5 years the senior's $300k nest egg belongs to someone else. If they live 10 years, $600k. Seniors today say that they need one million to be financially safe as a senior.

Why doesn't the government develop a similar model at a reasonable price - where senior cost is more in line with management cost minus the profit that senior facility companies currently collect?

How many provinces provide an benefit if seniors are cared for at home? Can the caregiver be a family member? Does the senior have to be destitute to receive government benefit for not entering a care facility?
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