CPP Maximum Premiums Raised to $185 a month

Canadians will again pay more to fund the Canada Pension Plan this year, as maximum pensionable earnings will be increased to $48,300, in line with increases in average weekly salaries. A $3500 basic exemption, unchanged from prior years, ensures that no premiums are payable if income is less than this amount. As the premium rate applied remains unchanged at 9.9% for the combined employer/ employee remittance requirements, the maximum premium will be $2217.60 ($184.80 per month) for employees and $4435.20 ($369.60 per month) for the self employed.

It's important to maximize benefits from the CPP by planning to assign them equally between spouses and planning early on whether or not one should wait to age 65 to begin receiving benefits, or tap into them as early as age 60. Advisors and their clients will want to have this discussion several months in advance of receipt of benefits to allow for the application process, but also to perhaps defer income into the right time of the year in 2011.

Additional Educational Resources: Tax Efficient Retirement Income Planning Course featuring The Knowledge Bureau's Retirement Income Projector. Also available in EverGreen Explanatory Notes.