Retirement Planning

The impact of COVID-19 on some Canadians’ finances has been devastating. The pandemic crisis has affected approximately 60% of Canadians financially, with over a million jobs lost in March of 2020 alone. Of those affected who continued to work, almost a third saw their hours cut.

Preparing for retirement is no easy task. While most of us look forward to the freedom it brings, a surprising number of us aren’t prepared financially. A national survey of Canadian pre-retirees found that 56% don’t have a plan for retirement savings. Even among those that do have a plan, almost a third feel that they’re falling behind.

Rapid shutdowns, volatile stock markets, slow economic recoveries and bleeding financial portfolios have wiped out a significant portion of the retirement income that many Canadians were banking on. Those who were on the verge of retirement and counting on income from investments to cover their living costs are seriously considering delaying their retirement. Those who were forced into an early retirement due to COVID-19 may be covered under CERB and Canada Recovery Benefit, but these benefits are applicable for a limited duration and are hugely insufficient to fund most retirement plans.

Preparing for retirement is no easy task. While most of us look forward to the freedom it brings, a surprising number of us aren’t prepared financially. A national survey of Canadian pre-retirees found that 56% don’t have a plan for retirement savings. Even among those that do have a plan, almost a third feel that they’re falling behind.

Medical insurance options for early retirees are probably more attractive, given that they usually don’t qualify for any financial assistance before 65. Is it worth having private health insurance if you’re under 65 and spending thousands on prescription drugs? Probably, but again, it is important to do the math before signing up for any plan.

However, the downside of retirement freedom is having to rely on a fixed income. If that income is inadequate, the retirement dream can soon turn into a nightmare. A national survey of Canadians aged 60-plus found that almost half of them have at least one financial concern.

There are five other CPP pension benefits that people are much less aware of. While slightly less known, they are worth knowing about, as they could help boost your retirement income or your family’s income.

As well as having an impact on Canadians’ health and personal lives, Covid-19 has also affected many Canadians’ ability to make a living. Unemployment could rise to 13.5% and over a million Canadians have applied for unemployment benefit. Forty-four per cent of Canadian households have at least one person who has lost their job or now works reduced hours.

How exactly does CPP work? Is everyone eligible to receive it? And when can you start receiving it? We take a look at the answers to these questions as well as how much you can expect to receive from your CPP retirement pension.