CPP Survivor Benefits

This week there was an interesting article on Advisor.ca about the CPP Survivor Benefit. As many of your clients will be relying on CPP for part of their retirement income, I thought I’d share a quick summary of the article. Approximately 77,000 Canadians are receiving the Survivors Benefit. In terms of income the averages those younger than 65 received $429.33 (approx. $5,200 annually) and those 65 and older received $315.77 (approx. $3,800 annually). If a survivor is 65 or older and not receiving CPP, they will receive 60% of the deceased’s CPP income. However, if they are receiving CPP the combination of their own CPP plus 60% of the deceased’s CPP cannot exceed the CPP maximum income of $1,114. This is rather punitive because if both parties were receiving the maximum benefit, this monthly income will be cut in half. And, in addition to this cap, the deceased’s Old Age Security will stop as OAS does not have a survivors benefit. In numbers, this couple’s monthly income (assuming they are both getting the maximum CPP and OAS) would go from 2 x $1,114 plus 2 x $584 or $3,396 to $1,114 plus $584 or $1,698. That’s a 50% reduction in monthly income or approximately a $20,000 reduction in annual income. How many of your clients could suffer such a financial hit? I may be stating the obvious, but here’s another good reason to save often and save early. The less reliance your clients have on government benefits in retirement the better off they’ll be. Here’s the link to the entire article. I’m currently putting the agenda together for our next Money Monday, September 30th. If there’s a particular topic you’d like to have presented, please let me know. Take care, Scott Edgington Director of Wealth Qualified Financial Services scott.edgington@qfscanada.com 416 786 4140




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