Planning for Retirement

I had the opportunity and pleasure to meet several retired couples a month ago. They had already skied between 60 to 80 days and I would add another ten to 15 days to those by the time FAR closed for the ski season. They play golf and walk the course (no golf carts here), cycle, hike, travel and so much more. They are enjoying life!

How can we do the same? Staying fit and healthy is number one but what about the financial part of the equation? Currently, there’s the mortgage, car loan, children to feed, clothe, and educate and the list goes on, and it doesn’t seem like it will end.

The last ten years have flown by and I am sure the next 20 to 25 years will continue to do the same. Will we have enough money to retire at 55? Was Freedom 55 a marketing scheme? Will I need to work until I am 70? Do you sense my panic?

Can we count on assistance from the government in 20 years from now? Maybe, but I am not so sure. For the lucky ones looking to retire soon, the federal government currently provides the following pension benefits:

- Canada Pension Plan (CPP) retirement pension;
- Old Age Security (OAS) pension;
- Guaranteed Income Supplement (GIS);
- Allowance and Allowance for the survivor.

The Canada Pension Plan (CPP) benefits cannot be received by everyone, to be eligible you will need to have worked, made contributions to the CPP, be at least 65 years old or between the ages of 60 and 65 and take the work cessation test. The maximum amount of CPP that can be received is $986.67 per month or $11,840.04 for 2012. The average amount received by taxpayers is approximately $500.00 per month or $6,000 per year. The following link explains how your eligibility is determined and how the amount of your benefits is calculated -

The Old Age Security (OAS) pension is available to most people 65 and older. The maximum amount that can be received is $540.12 per month or $6,481.44 for 2012. Unfortunately, if your income exceeds $69,562 in 2012, you will need to repay a portion of the benefits you received. Refer to the following link for suggestions on how to reduce your income and the amount of the benefits you will need to repay -

The Guaranteed Income Supplement (GIS) and Allowances supplement the income received by lower-income taxpayers who receive the OAS pension.

The Service Canada website ( provides useful information on the retirement benefits available and when and how to apply for them. The Retire Happy Blog (, winner of the Globe and Mail’s “Canada’s Best Personal Finance Blog” award is extremely helpful in explaining these benefits and how to put them in perspective with your situation.

Next month, I will discuss what we can do through savings and investments to ensure or try to reach our retirement goals.