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Old 05-27-2015, 01:13 PM   #1
Slava
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Join Date: Dec 2006
Location: Calgary, Alberta
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Default Proposed increases to CPP

I thought that we should have a thread about this chatter to voluntarily increase both contributions and withdrawals from CPP. ( http://www.theglobeandmail.com/repor...ticle24621263/ ) While there are really no details at this point, making it difficult to say whether its a good/bad idea here are few potential considerations:

- CPP for many Canadians represents some forced savings. It comes off your cheque directly and is a mandatory contribution. Most people sort of forget about it to be truthful.

- While a new amount would be great because it would allow for that increase there aren't really details at this point about how it would be structured or what the rates would be. It would be likely that this would mirror the current plan and function as a defined benefit plan (where you put in a certain amount and they in turn pay you a set pension on your retirement).

- With defined benefit plans being more scarce these days (because of the guaranteed element) there definitely is a need here. CPP comes with an additional consideration at this point though. You can pay for decades (your whole working life potentially) and then die. If that happens the CPP death benefit is $2500. Clearly that would be an issue for someone who opted to double their contributions over say 35 years.

As I say, this is all up for discussion at this point and I haven't seen specifics at all. Its a very interesting idea though, and will be interesting to see the debate unfold over the coming weeks.
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