Weekly Tax Tip - How much will my Canada Pension be?

July 2017

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When you are planning for retirement, it is important to know how much of your retirement income will come from the Canada Pension Plan (CPP). Although the maximum monthly CPP benefit at age 65 for 2017 is $1,114, the average amount for new beneficiaries in January 2017 was only $685. There are many factors that determine the amount of CPP benefits you will receive in retirement, including how many years throughout your working life that you contributed the maximum contribution amount to CPP, how many years that you didn’t contribute due to child rearing, and at what age you start to collect your CPP retirement pension.  

Service Canada keeps a record of your pensionable earnings and your contributions to CPP. You can request your Statement of Contributions from your “My Service Canada Account”. For further information on your expected retirement benefit, you can request an estimate of your CPP retirement pension, based on your record of CPP contributions, by completing the Government of Canada form ISP1003, or you can use the Service Canada Retirement Income Calculator. This tool also factors in Old Age Security benefits. 

Even once you have the information about your CPP retirement pension, the decision of when to apply for CPP benefits is complex. Other factors to be considered include whether you plan on working while receiving your pension, your level of personal savings and investments, if you have access to a company pension plan, and your current health as well as family health history and any disabilities.

If you have questions regarding your expected CPP entitlement or other retirement planning your BDO advisor is ready to help. Contact your local BDO office or connect with our Canadian Tax Team.

This tax tip is a publication of BDO Canada LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of July 10, 2017.