CPP Becomes slush fund for whackos.

[sumdumguy]

CPP ====>$2 Billion =====>cheap housing in Mumbai. Joy to the World🤬

[TASFarms]

And they say it isn’t funded good enough and have to increase deductions.

[Guest]

should a person take it at 60 or wait ?
richard, you seem to be really up on the accounting end , do you have any thoughts on this ?

[GDR]

CPP ====>$2 Billion =====>cheap housing in Mumbai. Joy to the World🤬

About a year and a half ago they anounced they were no longer buying Canadian farmland and instead going to India to build affordable housing. Not sure that is beneficial to us, maybe altering the farmland market maybe was better.

Can't help but think there was pressure from the Liberal party to fullfill UN objectives around the world. Affordable housing sounds more like a humanitarian cause than an investment.

[farming101]

should a person take it at 60 or wait ?
richard, you seem to be really up on the accounting end , do you have any thoughts on this ?

Not Richard, depends how long you're planning to live and how poor you are

[helmsdale]

Not Richard, depends how long you're planning to live and how poor you are

When I get to 60 we'll be talking in the coffee shop about the good ol days when that system existed...

[tmyrfield]

When I get to 60 we'll be talking in the coffee shop about the good ol days when that system existed...

I'm there now. 40 years of farming only a couple of those with a bit of off farm income. A bunch of years with little pensionable earnings. The decreased benefit of early cpp withdrawals doesn't exactly make one feel very eager to live the good life of retirement. What is really sad is friends of same age passing suddenly. You never know.

[Horse]

It was said if you live past 74 you loose money by taking it early,but it was kind of nice seeing a cheque in the mail for seemed like doing nothing but staying alive, now it will be longer as I believe they upped it to 67 so that 2 yrs will make a difference.

[Richard5]

Well I ain't no expert but find finance, tax and stuff lIke that interesting so I read a lot and ask my accountant lots of questions whenever I meet.

Here's my two cents:

I would never pay anything substantial into CPP if I can avoid it. How do you avoid it? Well good advice and guidance on how you setup up your farm corporation is key. If you do it right, using partnership incorporations strategies (which is most likely on the chopping block the next budget) you keep enough land out of your company that you now have other options on how you can pay yourself. My accountant gave me a really neat table that shows what each type of compensation and how it affects your company and personal tax. If you pay yourself rent, it's not subject to CPP however it creates RRSP deduction room. So for me, I make sure I pay a small amount into CPP ($300-500) but then buy approx 5000 in RRSP's to replace what I am not putting into CPP.

The sad thing about CPP is you have no guarantee what you get at the end. If you paid in, you should get 2500 death pmt. if you have a spouse is children there is potential benefits for them. If you are disabled, there is benefits for that. Too often I heard friends talking about trying to max out the CPP each year and until I had it explained to me differently 20 years ago, I totally changed my thinking. The rrsp will be taxable someday but it is mine, I have control where I can invest it and when I turn 65 (or really any age) I can say what I want. CPP is fully controlled and you need to meet their rules.

If you have not paid in much I probably wouldn't take it early. The rules changed a few years ago and you can't fully opt out at 60. You can start drawing at 60 but now have to continue to pay in until 65.

This is only as good as I can explain it as its was explained to me.

[the big wheel]

Well I ain't no expert but find finance, tax and stuff lIke that interesting so I read a lot and ask my accountant lots of questions whenever I meet.

Here's my two cents:

I would never pay anything substantial into CPP if I can avoid it. How do you avoid it? Well good advice and guidance on how you setup up your farm corporation is key. If you do it right, using partnership incorporations strategies (which is most likely on the chopping block the next budget) you keep enough land out of your company that you now have other options on how you can pay yourself. My accountant gave me a really neat table that shows what each type of compensation and how it affects your company and personal tax. If you pay yourself rent, it's not subject to CPP however it creates RRSP deduction room. So for me, I make sure I pay a small amount into CPP ($300-500) but then buy approx 5000 in RRSP's to replace what I am not putting into CPP.

The sad thing about CPP is you have no guarantee what you get at the end. If you paid in, you should get 2500 death pmt. if you have a spouse is children there is potential benefits for them. If you are disabled, there is benefits for that. Too often I heard friends talking about trying to max out the CPP each year and until I had it explained to me differently 20 years ago, I totally changed my thinking. The rrsp will be taxable someday but it is mine, I have control where I can invest it and when I turn 65 (or really any age) I can say what I want. CPP is fully controlled and you need to meet their rules.

If you have not paid in much I probably wouldn't take it early. The rules changed a few years ago and you can't fully opt out at 60. You can start drawing at 60 but now have to continue to pay in until 65.

This is only as good as I can explain it as its was explained to me.

How rude of you, and to think all those people in India paying nothing for our pulses and you won’t even build them a house? 3 hail Mary’s and one lord s prayer and maybe you’ll be spared.

Or if you can’t do that send 5,000 dollars to the liberal party and tru dough might have a conversation that never happened with the big guy to get you off the hook.

[Richard5]

How rude of you, and to think all those people in India paying nothing for our pulses and you won’t even build them a house? 3 hail Mary’s and one lord s prayer and maybe you’ll be spared.

Or if you can’t do that send 5,000 dollars to the liberal party and tru dough might have a conversation that never happened with the big guy to get you off the hook.

Big wheel I think you have a flat....on all sides of your tires

[farmaholic]

We made some mistakes along the way. One thing my accountant pointed out was if the CPP recipients have no spouse or dependant young or handicapped children....your CPP dies with you.

Registered funds, non-registered funds, TFSA, CPP and maybe OAS, Income generating assets, maybe some Company pension, cash, sale of real estate. Depending what you have available and how much of each will determine how you "MANAGE" those resources.

Everyone will have a different strategy.

I've heard people say the older they get the less they spend on "lifestyle", so maybe taking it early might be the thing to do.

I had two uncles that received little or no CPP benefits, never lived long enough.

[farmaholic]

Max CPP contributions..... If you're incorporated and receiving a salary large enough to warrant maximum CPP contributions versus dividend income or rental income from personal land rented to the farming corp, YOU, because "YOU" are the Corporation, could be paying about $8000 in CPP contributions. Your total $4000 payroll deduction and the Company's matching contribution....ouch. That's alot.

Dividend income isn't RRSP eligible.

If you wanted to take dividend income and still make retirement savings equivelant to RRSPs from earned income....wouldn't the investments have to be in funds(mutual or ETFs) that don't trigger a capital gain or an interest slip(T5) to have tax free growth until the units are redeemed?

[Gofer]

We made some mistakes along the way. One thing my accountant pointed out was if the CPP recipients have no spouse or dependant young or handicapped children....your CPP dies with you.

Registered funds, non-registered funds, TFSA, CPP and maybe OAS, Income generating assets, maybe some Company pension, cash, sale of real estate. Depending what you have available and how much of each will determine how you "MANAGE" those resources.

Everyone will have a different strategy.

I've heard people say the older they get the less they spend on "lifestyle", so maybe taking it early might be the thing to do.

I had two uncles that received little or no CPP benefits, never lived long enough.

re:"your CPP dies with you" Your RRIF also is cashed if you die without Beneficiary. Our group had a presentation by an Estate lawyer and she pointed out that if you die with a larger amount left in your RRIF (say 300,000) you would pay 30 or 40 % in tax. The advice being to withdraw more than the minimum 5% per year if you are in a lower tax bracket at present and reinvest outside the RRIF (TFSA first). Then only accrued interest would be taxed.

[Richard5]

re:"your CPP dies with you" Your RRIF also is cashed if you die without Beneficiary. Our group had a presentation by an Estate lawyer and she pointed out that if you die with a larger amount left in your RRIF (say 300,000) you would pay 30 or 40 % in tax. The advice being to withdraw more than the minimum 5% per year if you are in a lower tax bracket at present and reinvest outside the RRIF (TFSA first). Then only accrued interest would be taxed.

I would agree with you Gofer. My biggest point i wish to make note of is using the same example, if a single person dies with max annual cpp contributions over lifetime, the estate gets 2,500. At least in your example, the balance is the estates money. Also remember, although tax of 30-40% is owning on the account, a similar amount would have been saved or deferred as they were bought.

No matter what the scenario, RRSP/RRIF accounts need to be managed whenever possible. The days for most trying to remain in the “Lowest tax bracket” i feel have been long gone. If you have been fortunate to create wealth, planning to make use of clawback of oas (about 75000) and the next tax bracket. (About 90,000) need to be considered.

I remember dealing with my parents before they passed, Dad had bought RRSP’s and only took the minumum out because he and the bank were so worried about paying tax. I had suggested changes and larger withdrawals and when he died 10 yrs ago, the amount left to deal with was minimal.

A good accountant should look at more than just head down current year things. Business and management of tax is long term, good things today pay dividends in the future.

Back to pushing snow!