If you are working as an employee for a company you will be paying into your pension plan and your employer will be matching the deductions.
1. How much are my contributions?
The contributions are based on the amount of money you earn per year. If you are earning over $3500* per year you will be contributing to the Canada Pension Plan. Canadian Pension Plan contributions (2017) is 4.95% deduction from your pay cheque.
2. Are your contributions enough for the retirement pension?
When your total gross wages are $25,000 or more you will receive a partial retirement pension from the Canada Pension Plan.
3. Are you paying the full amount of Canada Pension Plan?
If you are an employee, contractor, consultant or self-employed person making the maximum contributions each year, you will be maxed out for 2016 at $13,110 and 2017 at $13,370.04. Find out more about the election options for applying for Canada Pension.
4. Where can I find how much I will receive from CPP?
You can find how much retirement pension you will receive by accessing a online report through My Service Canada Account (MSCA).
5. Do I qualify if I’m from another country?
You can qualify based on the amount of income you make prior to retirement in Canada. If you are earning over $3500 per year and not less than $10,000 this income will qualify as a partial pension. You can work in both countries, but other rules apply to you. Please contact us for more information.
6. Will CPP provide enough pension to live on?
Average retirement payments from Canada Pension Plan contributions are between $400 and $1200 per month. Most people cannot live on this alone. You will need to start planning for your future, savings, retirement and vacations. Learn more about retirement plan options here: Should you contribute to an RRSP?
To learn more about your future tax planning, contact Ina.