By iA Private Wealth, September 26, 2019
Calculating CPP survivor benefits
|If the survivor is:||Then the survivor’s pension is:||2019 monthly maximum|
|Age 65 or older||60% of the contributor’s retirement pension (if the surviving spouse or partner isn’t receiving other CPP benefits)||$692.75|
|Below age 65||A flat-rate portion plus 37.5% of the contributor’s retirement pension (if the surviving spouse or partner isn’t receiving other CPP benefits)||$626.63 (includes flat-rate benefit of $193.66)|
In the simplest scenario, where only one of you contributed to CPP and that person dies after taking their CPP at age 65, the surviving spouse can be eligible for up to 60% of the deceased’s benefits. How much of that 60% the survivor receives depends on a number of factors, including their age and whether they’re taking their benefits before or after age 65.
Mind the cap
Allowance for the Survivor benefit
On the flip side, low-income surviving spouses or partners between age 60 and 64 can apply to receive the Allowance for the Survivor benefit. A non-taxable monthly benefit of up to $1,375.17 (for the July to September 2019 period) is available assuming the survivor’s annual income doesn’t exceed $24,816 in 2019.
Plan well, live well
With so many variables to consider and potentially thousands of dollars on the line, understanding how your government benefits work – individually and as a couple – is critical to securing a comfortable retirement. Just as essential is looking beyond government income sources to fund your later years. For example, starting as early as possible with tax-efficient savings, like a Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA), can help to provide the income you need to maintain your lifestyle, with or without CPP.
Have questions or want to get a head start on retirement income planning? Contact us today.This article is a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada.