The Canada Pension Plan (CPP) retirement pension is a monthly taxable benefit. The pension amount is based on your average earnings, your contributions to the CPP, and the age you start your CPP retirement pension. In this video, I am going to show you how to get an estimate of your monthly CPP retirement pension payments. I am not going to talk about the Quebec Pension Plan (QPP) in this video.

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The Canada Pension Plan (CPP) is a government-operated program that aims to provide financial support and security to individuals during their retirement years. As a Canadian citizen or a permanent resident who has made contributions to the plan during your working years, you are eligible to receive a CPP retirement pension. However, the actual amount you will receive depends on multiple factors.

One crucial factor in determining your CPP retirement pension is the number of years you have made contributions to the plan. The CPP is based on a formula that takes into account the average income you earned during your working years and the number of years you contributed. The formula considers your best 39 years of earnings, meaning it will drop out the lowest-income years from the calculation. This is particularly beneficial for those who have had periods of lower income or gaps in their contributions due to various reasons.

The maximum CPP retirement pension amount, as of 2021, is $1,203.75 per month. However, this amount is subject to income taxes, meaning your actual monthly payment may be lower after deductions. It’s important to note that not everyone will receive the maximum amount. Instead, the average CPP retirement pension payment is approximately $689.17 per month.

Moreover, the age at which you choose to start receiving your CPP pension also impacts the amount you will receive. The standard age to receive a CPP retirement pension is 65, but you can start as early as age 60 with a slight reduction or delay it until age 70 for an increased amount. If you start receiving your pension earlier than 65, your monthly payment will be reduced by 0.6% for each month before your 65th birthday. Conversely, delaying your CPP pension after 65 will increase your monthly payment by 0.7% for each month of delay, up until the age of 70.

It’s important to plan for your retirement and estimate how much CPP pension you will receive. The Government of Canada provides an online service called My Service Canada Account, where you can access your personalized CPP statement of contributions. This statement details your annual pensionable earnings and the amount you have contributed to CPP. It can be helpful in calculating your expected CPP retirement pension amount.

In addition to the CPP retirement pension, you may also be eligible for other sources of retirement income, such as the Old Age Security (OAS) pension and personal savings through Registered Retirement Savings Plans (RRSPs), tax-free savings accounts (TFSAs), and other investments. These supplementary sources can provide you with additional financial support during your retirement years.

It’s crucial to understand how much CPP retirement pension you will receive in order to properly plan for your retirement. By considering factors such as your contribution years, the maximum pension amount, and when you choose to start collecting your pension, you can better estimate the income you can expect from CPP during your retirement.