Why Ignoring CPP in Retirement Could Ruin Your Financial Future - Part 3 of Retirement Myths

Why Ignoring CPP in Retirement Could Ruin Your Financial Future - Part 3 of Retirement Myth.

Why Ignoring CPP is Risky

The video title's assertion that ignoring CPP in retirement could ruin your financial future is grounded in several key factors:

1. Loss of a Reliable Income Stream:CPP provides a consistent income stream during retirement. Ignoring this source of income means you're potentially giving up a steady stream of funds that could help cover essential expenses.

2. Inflation Protection:CPP benefits are adjusted annually to account for inflation, helping retirees maintain their purchasing power over time. Ignoring CPP means missing out on this built-in protection against rising costs.

3. Survivor and Disability Benefits:CPP doesn't only benefit retirees. It also provides support to surviving spouses and dependents and offers disability benefits to those who become disabled before retirement age. Ignoring these potential benefits can put your loved ones at risk in the event of unforeseen circumstances.

4. Government Backing:CPP is a government-backed program, which means it's relatively secure compared to private retirement investments that may be subject to market volatility. Ignoring CPP might leave you exposed to greater financial risks.

5. Tax Efficiency:CPP benefits are taxable, but they can be more tax-efficient compared to other retirement income sources. Ignoring CPP may result in a less tax-efficient retirement income strategy.

The Importance of CPP in Retirement Planning

To avoid the potential pitfalls associated with ignoring CPP in retirement, individuals need to incorporate it into their overall retirement planning strategy. This involves understanding when to start receiving CPP benefits, how much you can expect to receive, and how it fits into your broader retirement income plan.

Optimizing your CPP benefits may involve waiting until the age at which you can receive the maximum amount or coordinating with other retirement income sources like employer pensions, Registered Retirement Savings Plans (RRSPs), and Tax-Free Savings Accounts (TFSAs).

Why You Should Watch:
This video is not just for economists or financial experts; it’s for anyone concerned about their financial well-being in the coming years. If you're looking for ways to safeguard your investments, plan for retirement, or understand the economic indicators that could impact your future, this video is your go-to resource.

By the end of this discussion, you’ll have a clearer understanding of the driving forces behind rising interest rates, market volatility, CPP / OAS, Retirement planning and the tools you'll need for protecting your assets and ensuring a secure financial future.

Don't leave your financial future to chance. Equip yourself with the knowledge you need and consider getting professional advice to navigate these uncertain times. Subscribe for more insights and actionable tips.

Disclaimer: This video is for informational purposes only and should not be considered as financial advice.

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[rbrtr]

I will be taking CPP at 70. This portion of my income is absolutely guaranteed, inflation protected and a no-worry piece of my retirement.

[bRIZZAd]

Good content David. It seems some people want to ignore CPP/OAS just to add some conservatism to their plan - and as you said, if it is there when they retire, bonus! Though that is poor planning in my opinion. You laid out the impact it can make... and I would look at it from the perspective of potentially 'over-working' more than you needed to... by ignoring it. How much longer would you have worked to earn your calculation of $640, 000? Yikes. That's a lot of time slogging away by ignoring it.

[photoMorg]

My financial plan has me taking CPP and OAS at 65 so get a plan done for yourself to see whats best for you. The tax system is totally unfair to single seniors it needs to change!

[raisamamirieva]

CPP + OAS has been really helpful for me. Every month the money is there and I don't have to worry about the market or the economy. Thanks for the video David

[derekcox]

I don’t really get why many Canadians are so pessimistic about CPP and oas. CPP is funded. It continues to be funded, but aside from that I can think of AT LEAST 1 reason to take CPP when eligible and that is, Canadians pay into it for our entire working life!! Why would anybody NOT want to get some of it back in retirement!?, boggles the mind.🤦🏼‍♂️ by all means, self fund retirement if you can. Save as much as you can, but don’t NOT take cpp…that’s just kinda dumb.🤨 Great episode btw.👍👍👍

[martymendes]

Thank you for another great video. I will second one of the previous comments. I would love a video showing a break even analysis for CPP at 60, 65, and 70 which factors in the expense of depleting an RRSP as you delay. For those wanting to leave a legacy this would be very informative. Thanks.

[billyrock]

Excellent point on SINGLES and WIDOWERS! 👍 ✅

In most cases delaying CPP and OAS until age 70 is the best play ✅ . The only caveat being if you’re unhealthy or live an unhealthy lifestyle. 💪 🏋️‍♂️

I key point I often see missed related to retirement and seniors is a persons debt load and monthly budget. Sadly, many seniors have mortgage and car payments eating up 30%-50% of their income stream. 😔

Excellent video! 😊 👍

[nomadrelaxationchannel]

A lot of people say CPP won't be around but I keep seeing the payment amounts going up. I'm not worried

[zeekay]

I like how the video highlights the importance of CPP and OAS using average amounts taken at 65. I know it’s much better to wait till 70 to take both, but if you use that as the base case of your calculation the message is lost - half of the audience will disagree with you on the starting age.

Your video shows the benefit from CPP and OAS even in the base case, so waiting till 70 to start the payments will be an upside case and can only lead to better results.

Thanks for the informative video 😊

[debrapearse]

I believe if you worked all your life then you deserve to have CPP, that is your money

[Redneckboy]

For those that don't want their CPP, I will take it off your hands. CPP and OAS are supplements to wise life long investment choices.

[grampab]

Love all your videos David. You provide a wealth of knowledge. I know you have covered CPP crossover ages, but this has been based on simply needing the CPP. While we should not save for our children, in this an increasingly difficult world & financial security for our children & grandchildren is in question, this does play a factor for myself. While longevity is in my family, the biggest negative I see with CPP is that when you die, your spouse does receive a survivor benefit. If your spouse should also pass away however, then all CPP stops, with nothing left to provide some assistance to your children & if you use your RRSPs first, then that amount is greatly depleted. Could you please do a video on, say a 63 year old with 61 year old spouse, were CPP is started early & used to offset withdrawals from RRSP. The equivalent amounts therefore remain in the RRSP earning investment income of say 3, 4 or 5% (current 5 year GIC's are over 5%). I have done some calc's (if I'm doing this correctly?) & this really changes the crossover age to the point where it appears taking it early is not really a disadvantage. The reason I mention this is that a family where the husband & wife were in their 70's. They used a lot of their savings & put off CPP till approx. 68 or 69. The wife suddenly got cancer & passed away quickly & a year later the husband passed away in an accident. The result was that besides a modest home, there was really nothing much more it the estate to help the children.

[johnk]

CPP is going to be around for the long term - it is fully funded, held separate from the federal government operations, and will meet its obligation. I think a lot of the fear that it will go away is driven by news south of the border...where Social Security funds are routinely looted by the Federal government to fund operations.

[martymendes]

And here's another thought. I have full confidence that CPP is well funded and will be there for us, but who's to say there won't be a change in the eligibility age? With people living longer lives, wouldn't it make sense for them to up the age at some point?
As for OAS, I wouldn't be surprised if the clawback income limit gets lowered. It's presently over 80K. With mounting government debt and OAS being funded by government revenues, I personally wouldn't count on it being there if you're a higher income retiree. I hope I'm wrong on both counts.

[roberttaylor]

Why would anyone NOT take CPP or think it’s not important? Who is spreading the story that it isn’t? Which political party doesn’t support CPP?

[kcirdorb]

I've decided to delay CPP/OAS until age 70, to get a higher monthly amount....If I work from 65 -70 and pay additional CPP during those five years -Will that lead to an increased benefit/ higher amount for me at age 70? The work at 65-70 is at a much lower level of income.

[johnnyboyvan]

Finally us singles. My financial advisor has me at 62k after tax and inflation adjusted. Hire one and you will be amazed. I just retired in June. Age: 58

[EdnaBrenneis-gsjj]

Are any of you non Albertans concerned about what our premier is proposing? I've already experienced gov interference in my career and therefore DBP. Not again, I hope.

[josefinadomingo]

Its funny when people asjk how much they need for retirement .
Your lifestyle will tell you, no matter how big you save if your extravagant its never enough.Vice versa

[murraytown]

Maybe the CPP haters should decline their benefits and leave their money on the table for the rest of us.