Around The World In 100 Words
December, 2018; Week 48
In its infinite wisdom the government of Canada has come to realize that, despite its name -Canada Pension Plan, CPP isn’t much of a pension plan at all for Canadians. So with this dawning realization, the solution proposed (see link attached) is to modestly increase contributions and correspondingly, benefits when Canadians retire. So what does this mean? Answer: not much. It’s a band-aid response to a problem -make that an injustice, that is endemic to Canada. Namely, that only government employees have access to defined benefit pension plans that provide any degree of financial security. CPP is a joke, or it would be if this weren’t such a pressing financial matter. Tinkering with the formula of contributions and benefits is tantamount to re-arranging the chairs on the Titanic. The outcome is the same.
All the more reason then for 7 out of 8 Canadians who work in the private sector to get serious about contributing to their RRSPs and TFSAs. Without sufficient savings of their own accord, CPP will do little to help out in later years. Oh, and it’s weakling sister Old Age Security (OAS) which is about half that of CPP, well, it’s half as bad as the badness of CPP.
Our commitment to our clients is to help them realize financial security for the long term. This means having the savings they need to enjoy a comfortable retirement and the portfolio that is essential to this goal. CPP, well that’s a small consideration in the big picture -and should be based on the small amounts it provides after a lifetime of contributions.
Call me with any questions you may have.