The decision as to when to take the Canada Pension Plan is important and the Walton Financial Group in Barrie is ready to offer advice
The Walton Financial Group in Barrie Ontario has advice for people about when to take the Canada Pension Plan (CPP)
The decision of when and how to take your CPP benefits can be one of the most challenging you make. There are pros and cons of taking CPP early or delaying it. Consult a qualified investment and financial professional at the Walton Financial Group in Barrie to arrange for a discussion about this key decision related to your retirement planning
Here are some factors to consider:
*Defer receiving your Canada Pension Plan (CPP) benefits until age 70 and you’ll get 42 per cent more money each month. This sounds very appealing , but consider this.
-the fact is that you won’t break even on this deal until the extra 42 per cent makes up for the five years of payments you’ll forego from age 65 to 70. Let’s assume your combined CPP and Old Age Security is $1,750 a month, or $21,000 a year. Deferring that pension for five years means you’ll give up $105,000 ($21,000 x 5 = $105,000). How long will it take for the extra 42 per cent to equal that amount?
Forty-two per cent of $21,000 is $8,820. Divide $105,000 by that amount and you get a little more than 11.9 – that’s the number of years it will take. In other words, you’ll have to wait until you’re almost 82 years old before the deferral finally begins to pay off.
There are other factors to consider including the taxes payable on the extra 42% upon turning 70 ,plus the the fact that you could have made money by investing the forgone payments.
You also need to consider your health situation and your probable life expectancy
The bottom line is that this is a very personal decision and one that would be best made with the advice of an experienced financial adviser at the Walton Financial Group in Barrie Ontario
