WOW! We are Rich, We are Rich!

Received my Old Age Security Pension cheque in the mail today.

 

The monthly amount has been increased by $7.17 to $ 558.71  WOW!

 

That is much better than the last increase: $0.55 in January!

 

Your tax money at work! Smiley Happy

 

 

Message 1 of 18
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WOW! We are Rich, We are Rich!

See they are doing away with the checks and you will have to get Direct Deposit soon.
Message 2 of 18
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WOW! We are Rich, We are Rich!

"soon"

 

Not quite.

 

Two more years before they force us to get direct deposit.

 

I will miss all those young and friendly tellers at the bank.

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WOW! We are Rich, We are Rich!

I wonder what will happen if some one receiving Government Cheques refuses to sign up for direct deposit?

 

 






Message 4 of 18
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WOW! We are Rich, We are Rich!

Will they attempt to contact the people that didn't sign up?

 

Will they hold the money for people who didn't sign up or will they lose claim to it after a certain amount of time?






Message 5 of 18
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WOW! We are Rich, We are Rich!

"Will they attempt to contact the people that didn't sign up?"

 

They have been sending reminders on a regular basis, including a form you can fill and return to them (postage free) with your banking information.

 

By Spring 2016, I expect they will arbitrarily open bank accounts for those who have not signed up for direct deposit, advise the recipient accordingly (tell them where to get their money) and arrange direct deposit to those newly opened account.

 

They may have a way to monitor those accounts to make sure they are active and folks receiving their money.

 

That process may also eliminate many cases of fraud currently taking place.  Too often when someone dies, someone else (a "friend" or family member) will pick up the government cheques and cash them, never advising the government that the recipient passed away..  They may find it difficult to do so with direct deposits.

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WOW! We are Rich, We are Rich!

come on
pierre,direct deposit is so easy.less work 4 u too.
Message 7 of 18
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WOW! We are Rich, We are Rich!

"work"?

 

What work?

 

Drive to the bank after my stop at the post office and flirt with the tellers.  You call that work?  I enjoy every minute of it!

 

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WOW! We are Rich, We are Rich!

They will not contact anybody. It will be the same as it is now. If they mail you a cheque and it is returned it sits as a "credit" in your account. When you contact them with correct banking information they will then release it, but until they have a correct address (until direct deposit is mandatory) they just sit on the money.

As for people dying and not telling the government ALL hospitals and funeral homes are required to notify the government of a death. So unless grandpa died at your house and you buried him in the backyard the government knows they have died.

Message 9 of 18
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WOW! We are Rich, We are Rich!

Couples that paid in to Canada Pension to the max and receive the Old age security are getting about $30,000 per year.More if they qualify for the supplement.

 

Contrast that to many countries where the government gives you nothing.

 

Happy to be a Canadian.

 

No gripes here.

Message 10 of 18
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WOW! We are Rich, We are Rich!

Can you break that $30k down?  Strikes me as a little high.

Thanks.

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WOW! We are Rich, We are Rich!

You are correct. 

 

Currently, if both spouses receive Old Age Security ($ 558.71 monthly) the maximum combined annual income is $22,368 to qualify for the Supplement.

 

http://www.servicecanada.gc.ca/eng/services/pensions/oas/payments/index.shtml

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WOW! We are Rich, We are Rich!

fgs7079
Community Member

Pierre,

 

Didn't realize "Canada Town Square" had been revived ... stumbled upon it today ... thought after the last lady in BC bailed hosting the CTS site - it was gone forever  😞

 

... so ... on to your current topic ... you MAY receive more $$'s from OAS in the future ???

 

... my wife opted to receive her CPP benefits early (@ age 60) ... has been receiving same for about 1 1/2 years ... lo and behold received a letter from CRA last month ... her CPP benefits had been reviewed ... her monthly benefits increased immediateky by $15.00+ per month ... AND ... she received an addition CPP amount (lump sum) to "catch up" since she began to receive CPP benefits 1 1/2 years ago ... (about 211.00+) deposited into our bank account within 5 days of receiving the letter ...

 

WOW ... the old addage (sp?) ... 'don't look a gift horse in the mouth' ... 🙂

 

mebbe the OAS peeps will surprise you soon as well ... with another cheque ???

 

Cheers,

 

Frank in Greely, ON (KRD - KellyRedDog - my previous CTS id (our Irish Setter passed away March 21, 2013)

Message 13 of 18
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WOW! We are Rich, We are Rich!

"my wife opted to receive her CPP benefits early"

 

Yes, the rules for receiving early (or late) CPP were changed a few years ago, leading to mass confusion, including CRA staffers!

 

Mary went the other way and decided to postpone receiving CPP until she turns 70 in a few years.  The payout will be substantially more (42% more) than taking it at 65.  In the meantime, it allows her to withdraw a bit more from her RRSPs (via RRIF) without being hit by more income tax.  By the time she has received most of the RRIF, the CPP will kick in.

 

http://www.tewealth.com/strategies-newsletters/the-new-cpp-do-you-take-it-now-or-later/

 

Good for cash flow and good to minimize income tax! Smiley Happy

Message 14 of 18
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WOW! We are Rich, We are Rich!

it's a coin flip!   you have to guarantee that you will live till at least 79 before you start to show a "profit" . If you die before age 70 you have lost about $60,000 ((this varies from person to person).

Right now I am 52 and using my figures, I would have to live till 76, just to break even (taking it at 60 rather than 70) anything short of that and I am gaining money and anything over that I would have lost money. You really have to ask yourself "when do I plan on dying"

 

you could get in a car accident tomorrow and never see a dime !

Message 15 of 18
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WOW! We are Rich, We are Rich!

It is a bit more than "flipping a coin."

 

There are three possibilities:

 

1) Live to life expectancy of 78-80 and you more or less break even

 

2) Live longer and you are way ahead, getting larger amounts indexed to inflation

 

3) Do not live as long as life expectancy and - does it matter?  you are dead.

 

So, considering the three possibilities, we feel it is a lot safer to have more for longer should we need the money eventually than to get more today, resulting in much higher income taxes. 

 

When calculating your "break even" point, take the time to calculate the effect of income tax on your decision.  It is relevant.

Message 16 of 18
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WOW! We are Rich, We are Rich!

When calculating your "break even" point, take the time to calculate the effect of income tax on your decision.  It is relevant

 

and you adjust that but determining how much to take out of your RIFF each year. It is gaining interest!

 

And yes you are dead but some people actually care about their children and would like to leave them an inheritance--some apparently think of themselves only..

 

My own Father had he not decided to take it at 60 would have ended up getting nothing as he passed away when he was 65.

 

Also anybody with a government pension from the military is wise to start it the day they turn 60 as it is clawed back off your DND pension starting at age 65 , so this way you get 5 years of "technically " free money that you are not going to get otherwise

Message 17 of 18
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WOW! We are Rich, We are Rich!

"some people actually care about their children and would like to leave them an inheritance-"

 

If leaving an estate is a priority, then most investment advisors will suggest delaying CPP until age 70 as it will, on average, lead to a larger after tax estate than taking CPP at 60.

 

Of course things are different if one needs the money to live on where taking CPP at 60 may be a necessity but this has little to do with building an estate for the next generation.

 

Typically, those taking CPP at 60 have quit the work force by then. 

 

In the "good old days", Canadians stopped contributing to CPP once they started getting their pension cheques.  However, the rules were changed a few years ago whereby working Canadians keep paying CPP premiums until age 65 (it is no longer elective).  Self-employed Canadians must pay  9.9%, both the employee and employer portions.

 

Fortunately for you, at age 52, you still have many years before you have to make a decision to retire early and/or collect CPP early.  The rules and your circumstances may change between now and then. 

 

When the time comes, do yourself a favour and consult competent advisors to guide you in your decision based on your personal circumstances.

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