If you've picked up the paper lately, you've most likely seen the headline about changes coming to the Canada Pension Plan (CPP) in 2019. The Finance Minister Bill Morneau and the Provinces, with the exception of Quebec and Manitoba, have endorsed a deal that will increase both the premiums and the payout during retirement. CPP benefits are based on contribution – both yours and your employer, up to a maximum. The National Post reports that maximum pensionable earnings will increase from $54,900 to $82,700 once the program is fully phased in. This means you will be paying more into the program, up to that cap, lowering the amount left on your paycheque to take home.
The CPP is essentially a forced savings program which mandates that employees and employers alike pitch in.
However, this decision is not without controversy. Organizations such as the CFIB (Canadian Federation of Independent Business) say that this higher cost to businesses may mean that they will hire less staff, offer lower starting wages, or delay wage increases to compensate.
Are you relying on programs like CPP to fund your retirement? While they are a component of Canadian's income during retirement, they can change. Take matters into your own hands and make sure that you are preparing for your own retirement.
Give us a call at 604-521-3778 or send us an email at advisors@braunfinancial.com.
We're always happy to help.
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