CPP Readiness: Are Pre-Retirees Ready for Change?

Significant change is about to occur to the Canada Pension Plan, and tax and financial advisors should use this opportunity to do some "knowledge marketingî to their clients before 2012 is upon us. Canadians who have already started to receive CPP and are not going to be working in the future will not be affected by these changes. However, for the rest of us, the following changes will apply:

• The monthly amount will increase for those waiting until after age 65 to receive CPP. The longer you wait, the more you get until age 70.

• The monthly amount will decrease for those taking CPP between ages 60-65. The sooner you begin the less you will receive.

• You will not have to stop working in order to begin receiving CPP.

• If you are under 65, receiving CPP and still working, you and your employer will have to continue making CPP contributions. This will increase your benefit, however, later.

• If you are between 65-70 you can choose to continue to make CPP contributions. If you contribute then your employer has to do so as well. This will increase your benefit when you do begin to receive it.

• A longer period of low earning years will be excluded from your CPP benefit calculation. This too will increase your benefit.

The links below contain more detailed information for the general public:

http://www.servicecanada.gc.ca/eng/isp/common/proceed/socinfo.shtml

http://www.servicecanada.gc.ca/eng/isp/cpp/postrtrben/main.shtml

For professionals, the information for Financial Advisors is especially interesting at this link: http://www.servicecanada.gc.ca/eng/isp/cpp/postrtrben/advisors.shtml

ADDITIONAL EDUCATIONAL RESOURCES: Introduction to Personal Tax Preparation, Tax Efficient Retirement Income Planning