| With more and more retirees entering their so-called | | | | abandon pension arrangements or switch from |
| golden years with less than enough money to | | | | defined benefit plans to defined contribution plans, |
| support themselves, there are suggestions that | | | | which are typically less generous and more subject to |
| perhaps CPP benefits should be doubled. The cost of | | | | market risk. |
| living is no longer the same as it was even from only | | | | Currently the average Canadian receives monthly CPP |
| one year ago, so it makes sense to rethink the | | | | payments of $502.57 from their monthly retirement |
| amount of savings we put away for our future. | | | | pension. The high-end average of $934.17 would be |
| If you're around the age where thoughts of CPP and | | | | increased to a maximum of $1,635 with the proposed |
| other investments for those retirement funds are in | | | | benefit increase. |
| the back of your mind, you may be surprised to | | | | To pay for this, Canadians would see a substantial |
| know many retirees are doing so with debt. | | | | deduction from their pay cheques. As it is now, |
| The proposal would see Canadians adding an | | | | Canadians pay 4.95% of their salary into CPP up to a |
| additional 58% increase to their CPP funds over | | | | limit of $46,300 per year. Under this new proposal, a |
| seven-years. This would allow the plan to double the | | | | gradual seven-year increase to 7.8% would see |
| average amount it pays out to its retirees, | | | | Canadians generally doubling their eventual CPP |
| significantly increasing their retirement benefits. This | | | | payments. This means that if you make $46,300 a |
| increase would give people the security they will | | | | year or more, your contributions would increase by |
| need and also allow them a respectable standard of | | | | $1,319.55 annually, from $2,291.85 to $3,611.40. |
| living. Most of the retiree generation currently see | | | | Current numbers show that almost two thirds of |
| themselves in a considerably different situation, | | | | working Canadians have no registered pension plan |
| having only enough for mandatory expenses. | | | | and about one-third of Canadian families have no |
| A national program will offer far more financial | | | | retirement savings whatsoever. If you are part of |
| security, especially since the recent economic crisis | | | | this one-third, it may be time to consider preparing |
| has forced most private-sector pension plans to be | | | | for your future. Now is the time to begin paying |
| eliminated or cut back significantly. The sufficiency of | | | | down debt so that you can reach your retirement |
| saved retirement income has deteriorated quickly in | | | | free of debt. |
| the past few years as more and more companies | | | | |