Every year when we meet with our clients we stress the importance of having a long-term financial plan in place. Markets can be unpredictable year to year, but a financial plan can help you see beyond the focus of returns and keep your attention on the horizon.
For those who haven’t started a financial plan, or are considering retirement, there are a few key pieces of information that are helpful when gathering all the information needed to create your plan. Some of this information is found through My Account regarding tax information but where do you start to look for your CPP information?
My Service Canada Account . In the past CRA would mail Canadians a CPP statement outlining their contributions and their expected pension. Moving forward should you want to learn this information it will be up to all of us to log on. Young families are familiar with this site as it is the portal for which parental benefits are applied for, and current retirees should have already created an account while applying for CPP and OAS. If you have already created you’re My Account you can now toggle over to the My Service Canada Account seamlessly.
Why is it important to understand what your CPP will be? With recent changes to the funding requirements of both employees and employers, the CPP amounts of younger Canadians will change drastically. Initially most of us will see these changes starting January 2019. The phase-in is going to take time, with full implementation scheduled for 2025. That means anyone retiring before 2019 won’t see any difference and those retiring shortly after that will see very little improvement. The largest impact will come to those born after 2000.
What does this mean to me? It’s a question I answer continually in financial planning meetings. CPP is not the cornerstone of retirement for the majority of Canadians retiring today, but is an important piece to understand. As millennials fully enter the work force, and the generation behind them (my daughters) contribute to CPP it will become a more robust piece of their retirement puzzle, and something I will have the confidence to include when planning for the next generation.
** I have prepared this commentary to give you my thoughts on various investment alternatives and considerations which may be relevant to your portfolio. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group. In expressing these opinions, I bring my best judgment and professional experience from the perspective of someone who surveys a broad range of investments. Therefore, this report should be viewed as a reflection of my informed opinions rather than analyses produced by the Research Department of National Bank Financial **