If you are looking to gain a better understanding of Canada Pension Plan (CPP) and Old Age Security (OAS), you’ve come to the right place. Whether you are just starting out in your career or nearing retirement, these two government programs can have an impact on your financial well-being. Let’s take a closer look at CPP and OAS, how they work, and what role they play in retirement planning.
What is CPP?
The CPP is a Canadian government program that provides monthly benefits to those who have contributed to it over their working lives. It is funded by contributions from employers, employees, and self-employed individuals. Depending on how much you contribute each year, you can receive up to 25% of your pre-retirement income through the CPP in retirement. The amount of money you receive depends on how many years you worked and how much you earned during those years.
What is OAS?
OAS is another Canadian government program that provides monthly benefits to retirees over 65 years old who meet certain eligibility criteria. Like the CPP, eligibility for the OAS program depends on the number of years worked and their total income earned over their working life. The maximum benefit available through OAS is $735 per month as of 2021.
How Can You Benefit From These Programs?
The best way to benefit from these programs is by planning ahead before retirement age arrives. That means contributing regularly throughout your working life so that when it comes time to retire, you will be able to take advantage of the maximum benefits offered by both programs. Additionally, there are options available for those who want to supplement their income after retirement with additional investments such as stocks, segregated funds and mutual funds in order to maximize their returns from these programs.
In conclusion, understanding CPP and OAS can help ensure that your retirement plan has all its bases covered when it comes time for you to retire. By contributing regularly throughout your working life and making additional investments where appropriate, you can maximize the benefits offered by both programs when it comes time for you to enjoy your golden years! With proper planning and foresight, both CPP and OAS can help provide financial stability during one’s retirement years.