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Old 08-18-2011, 09:04 AM   #21
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Originally Posted by Nuiloa View Post
Don't forget that Canada is a socialist country, masquerading as a democracy. We pay a lot of taxes to support our health care and welfare systems. Depending on your income, you could lose 50% or more to taxes - and that includes retirement income. In fact, if you make too much, they won't even give you the old age benefits you have paid for all your working life. Instead, they give them to someone who has never worked or bothered to save...The culture of mediocrity in this country saps any initiative and rewards those who don't want to work and/or don't save anything for their retirement.
IMHO this seems like the direction that America is headed so the COL difference between the USA and Canada may not be so great in the years ahead!
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Old 08-18-2011, 10:47 AM   #22
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Originally Posted by Nuiloa View Post
A person who has no retirement income is guaranteed about $25,000 a year in government pensions.
This is per person in Canada? Does this mean a married couple would get around $50,000.00 gross per year with no retirment income? I thought it was around half that, I need to do some research then. That wouldn't be hard to live on if everything was paid for.
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Old 08-18-2011, 11:19 AM   #23
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Originally Posted by Nuiloa View Post
Don't forget that Canada is a socialist country, masquerading as a democracy. We pay a lot of taxes to support our health care and welfare systems. Depending on your income, you could lose 50% or more to taxes - and that includes retirement income. In fact, if you make too much, they won't even give you the old age benefits you have paid for all your working life. Instead, they give them to someone who has never worked or bothered to save.

A person who has no retirement income is guaranteed about $25,000 a year in government pensions. My mom, on the other hand, worked all her life and only made $24,000 a year because she didn't qualify for the supplements!

The culture of mediocrity in this country saps any initiative and rewards those who don't want to work and/or don't save anything for their retirement.

Nui <------ just a little fed up with welfare scumbag leeches

There is a lot of false and misleading information in this post.

Depending on the province, the marginal income tax rate tops out at around 45% (the average tax is usually under 35% for almost all income levels).
TaxTips.ca - Tax comparison for 2011 by province/territory

We pay Canada Pension Plan (CPP) in our working lives, and CPP does NOT get clawed back. The payout is directly related to what the person has paid (ie: it not paid to someone who "has never worked ")

Old Age Secuurity (OAS) is not directly funded by anyone (no hold backs or withdraws from income) and this can get clawed back depending on other retirement income.

Guaranteed Income Supplement (GIS) is the last program offered to low income retirees.

If someone did not work (and thus did not pay into CPP) they would receive at most:
533.70 OAS per month
723.65 GIS per month
For a total of $1,257.35 per month, or $15,088.20 per year.
Old Age Security Payment Rates
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Old 08-18-2011, 11:32 AM   #24
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Originally Posted by naggz View Post
If someone did not work (and thus did not pay into CPP) they would receive at most:
533.70 OAS per month
723.65 GIS per month
For a total of $1,257.35 per month, or $15,088.20 per year.
Old Age Security Payment Rates
Ok, this is what my understanding was. Now if one does collect CPP then the combined OAS and GIS payments are reduced?
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Old 08-18-2011, 12:08 PM   #25
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Ok, this is what my understanding was. Now if one does collect CPP then the combined OAS and GIS payments are reduced?
OAS is added to total income and gets clawed back at 15 cents per dollar above $67k. I know because I cashed in a couple of insurance policies (which all appear as income) and got clawed back substantially.

But normally, there is a pension credit (for both spouses) and an age credit towards taxes that makes the amount of taxes quite reasonable. These are all clawed back based on means too.

(But I am sympathetic to Nuiloa's post. There are some abusers. We have not mentioned welfare. That is where most of the abuses are. Next is unemployment insurance. Fishermen collect it every year all their lives, for example.)

The US was number one for capitalizing on human potential and double that of Canada and most other countries.
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Old 08-18-2011, 12:23 PM   #26
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Ok, this is what my understanding was. Now if one does collect CPP then the combined OAS and GIS payments are reduced?
The max CPP is $960 per month ($11,520 per year)

The clawback for OAS is 15% for income over 66,335, so that would be okay.

The clawback for GIS is 50% for all income (income would not include the OAS, just CPP) so this would be $723 - (50% x 960) = $243 after clawback

So for a single person who is eligible to receive the max CPP, OAS, and GIS payout, the payouts should be about:

$ 960 CPP
$ 533 OAS
$ 243 GIS
-------------------
$1,736 per month or $20,832 per year.


Notes: GIS is non-taxable, and the tax on the CPP and OAS is negligible ($0 to a couple hundred per year, depending on the province)

as an aside, here is a link to a Canadian tax calculator:
http://www.taxtips.ca/calculators/taxcalculator.htm
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Old 08-18-2011, 09:29 PM   #27
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You really need to look at TOTAL taxes collected, at all levels. It means nothing to compare marginal rates without also understanding the standard deductions and other exemptions written in the tax code. Also, one country may fund many more things at a local level - it's just not apples-apples.


-ERD50
The numbers turn out to be not that different for the US and Canada. From

Canadians pay less tax on income than most in developed countries: OECD | Economy | Financial Post

"Canada’s overall total tax burden, including social-security charges, was 30.3% of wages for a single person without children."

compared to

"Only the United States, Ireland, Australia, Switzerland, Israel, Korea, New Zealand, Mexico and Chile had lower burdens, though the U.S. rate — at 29.7%, up slightly from 2009 during a time when Canada’s shrank by about a third of a percentage point — was just behind Canada’s."

So about half a percent difference. Not significant in my view.

If you go to the OECD:

Tax : Average tax burden on workers

You can download the spreadsheet with the tax numbers. They break down the tax burden into a couple categories, but for most the numbers are within a percent or two for most categories (sometimes canada is lower, sometimes higher).

I believe sales tax is not included which I think would tend to push up the tax burden in canada a little more. But certainly the numbers do not support Canada being far higher in taxes.
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Old 09-14-2011, 07:56 AM   #28
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Originally Posted by naggz View Post
The clawback for GIS is 50% for all income (income would not include the OAS, just CPP) so this would be $723 - (50% x 960) = $243 after clawback
Thanks for the reply naggz.

If I may ask another question:

In the statement "The clawback for GIS is 50% for all income" would investment income be part of this? In other words, if I were to get $10,000.00 per year from investments, I would pay what ever taxes were required and what was left would reduce the GIS claw back by 50%?

Quote:
Originally Posted by naggz View Post
If someone did not work (and thus did not pay into CPP) they would receive at most:
533.70 OAS per month
723.65 GIS per month
For a total of $1,257.35 per month, or $15,088.20 per year.

So for a single person who is eligible to receive the max CPP, OAS, and GIS payout, the payouts should be about:

$ 960 CPP
$ 533 OAS
$ 243 GIS
-------------------
$1,736 per month or $20,832 per year.
Am I to understand that if someone contributed to CPP for let say 40 year they would only get less then $6,000.00 per year more then someone who never worked a day yet lived in Canada for more then 40 year?
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Old 09-14-2011, 08:37 AM   #29
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...if I were to get $10,000.00 per year from investments, I would pay what ever taxes were required and what was left would reduce the GIS claw back by 50%?
Unfortunately, the income number used to calculate the clawback is the before tax amount ($10,000). (The tax on $10,000 of income would be $0, or very close to $0 anyway, so the after tax amount wouldn't be much less).

In this scenario, GIS would be reduced by $5,000 per year.

Some more info on GIS is here (including income types):
(the values are outdated, as it is from 2009)
Guaranteed Income Supplement (GIS) and GIS Clawback | Million Dollar Journey
and the Service Canada (Gov't) site is here:
Guaranteed Income Supplement (GIS)

Quote:
Originally Posted by My Dream View Post
Am I to understand that if someone contributed to CPP for let say 40 year they would only get less then $6,000.00 per year more then someone who never worked a day yet lived in Canada for more then 40 year?
Yes.
note: The numbers above are for a single person, there are other rules and amounts for couples.
Here are some tables to figure out OAS and GIS payments, depending on Income:
http://www.servicecanada.gc.ca/eng/i.../tabmain.shtml

edit: In the past year, there has also been musings about enhancing the CPP, and/or adding a second optional retirement savings plan in Canada, but privately managed. But nothing has been decided on yet.
http://www.theglobeandmail.com/news/...rticle1845140/
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Old 09-14-2011, 10:34 AM   #30
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Thanks for the links naggz, it gives me some reading material tonight.

As for the calculations below I neglected to read the detail stating "single". That changes the bottom line down to $1,013.54 X 12 =$12,162.48 per person.

I'm not sure what my wife and I would get in CPP at age 65 but if we need to live on $45.000 per year (net) then we have to come up with another $21,000.00 net (per year) not including CPP when we reach 65.

My yearly calculations work out to:

OAS & GIS - $12,162.48 X 2 = $24,324.96 per year.
CPP - ?
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Old 09-14-2011, 10:51 AM   #31
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Old 09-14-2011, 11:14 AM   #32
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How long does someone have to be residing in Canada to eventually recieve GIS and OAS?
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Old 09-14-2011, 11:16 AM   #33
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Originally Posted by My Dream View Post

I'm not sure what my wife and I would get in CPP at age 65 but if we need to live on $45.000 per year (net) then we have to come up with another $21,000.00 net (per year) not including CPP when we reach 65.

My yearly calculations work out to:

OAS & GIS - $2027.08 X12 = $24,324.96 per year.
CPP - ?
Yes, that looks about right. (in today's dollars at least, you may need more than that depending on when you will hit 65)

Also, if you are of different ages, look into the allowance program.
(if one person is elegible for GIS and OAS, and the younger spouse is between 60 and 64 with low income, then they can qualify)
Allowance Program



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Originally Posted by Ed_The_Gypsy View Post
Move to Alberta. Calgary. Edmonton. Banf.
Financially, Alberta is nice because of a lack of provincial sales tax, but housing is fairly expensive in Edmonton, very expensive in Calgary, and prohibitively expensive in Banff.

Also, we have a flat provincial income tax here, so some lower income brackets actually pay a little more here than in other provinces, but higher incomes usually come out ahead. We also have much higher energy costs due to a de-regulated market. I am jealous of Ontario's Hydro regulated rates when ours spike.
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Old 09-14-2011, 11:34 AM   #34
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Thanks for correctly my math naggz, I edited my previous post.

Again doing the math, we would need at least $500,000.00 in savings earning 4 % guaranteed rate of return to give us a gross yearly income for the additional $20,000.00 amount pre tax. As you stated, taxes would be minimal.
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Old 09-14-2011, 11:52 AM   #35
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How long does someone have to be residing in Canada to eventually recieve GIS and OAS?
OAS:
The OAS pension

Eligibility conditions: To qualify for an Old Age Security pension, a person must be 65 years of age or over, and
  1. must be a Canadian citizen or a legal resident of Canada on the day preceding the application's approval; or
  2. if no longer living in Canada, must have been a Canadian citizen or a legal resident of Canada on the day preceding the day he or she stopped living in Canada.
A minimum of 10 years of residence in Canada after reaching age 18 is required to receive a pension in Canada.
A minimum of 20 years of residence in Canada after reaching age 18 is required to receive a pension outside of Canada.

GIS:
Eligibility conditions: To receive the Guaranteed Income Supplement benefit, a person must be receiving an Old Age Security pension. The yearly income of the applicant or, in the case of a couple, the combined income of the applicant and spouse or common-law partner, cannot exceed certain limits.

Both from here:
Overview of the Old Age Security Program
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Old 09-14-2011, 05:35 PM   #36
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Thank you.
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Old 09-14-2011, 09:30 PM   #37
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Financially, Alberta is nice because of a lack of provincial sales tax, but housing is fairly expensive in Edmonton, very expensive in Calgary, and prohibitively expensive in Banff.
How about Drumheller? I like Drumheller.
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Old 09-15-2011, 12:18 AM   #38
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Lots of nice places in Alberta.....Drumheller has the spookiest landscape! How about a little town like, say, Oyen? Middle of nowhere, big sky, prairie hummocks for miles on end......
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Old 09-15-2011, 11:25 AM   #39
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Lots of nice places in Alberta.....
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