Quote:
Originally posted by brown_bear
For a person who worked in Canada for 10 years how much can they expect in retirement? How much do they pay in today's dollars?
Depends how much you have contributed to your private RRSP.
The CPP you have paid & the OAS you get from the government won't be much.
But if you are really poor & have NO RRSP or other income, you can get GIS ( Guaranteed Income Supplement ) in addition to the CPP ( Canada Pension Plan ) & OAS ( Old Age Security )
OAS + CPP + GIS will be around $ 1,000/month per person.
But just OAS + CPP won't be much.
In a way RRSP is a trap, people who contribute to it won't get GIS in their Old age, as government will say you have your own money so why should we pay you GIS.
But people who have NOTHING and no RRSP & did nothing for their Savings will actually get GIS from the government..lol. Basically GIS is like WELFARE for poor Senior citizens.
1. Always pay of your DEBT which has high interest first like Credit cards, Car loans etc
2. Then Pay off your MORTGAGE so you are Mortgage free in Retirement
3. Then contribute to your RRSP.
The more RRSP you have from your own hard earned money, the less you get in handouts from the government in Old age like GIS.
The less you have in RRSP & the less you have contributed towards your own retirement, the more you have in handouts like GIS from the government in old age 
RRSP is nothing but deferred taxes. You might save in tax now. But when you withdraw it, you will be taxed, but hopefully you will be in a lower tax bracket in your retirement when you withdraw from RRSP.
But dollar for dollar any income from RRSP or any other income will be deducted from GIS in your old age. And you won't even be eligible & qualify for GIS if you are NOT a low income Senior.
I know a couple, who contributed NOTHING to their RRSP.
Both of them did average jobs, but whatever they made they put towards their mortgage & paying it off.
They bought their house for $ 220,000 in GTA & today its worth close to $ 750,000 . The house is paid off & their Equity is $ 750,000.
Both are retired now and get $ 1,000/month each so $ 2,000/month combined in OAS + GIS + CPP
from the government.
Plus they qualify for other rebates & subsidies like Property Tax rebate, Heating & Hydro rebates, Snow removal subsidy from the government, HST rebate from CRA , Ontario Trillium Benefit from ON , ODB - Ontario Drug Benefit plan etc etc .
They get all these above rebates & subsidies because they are LOW income, the government doesn't see that they have a $ 750,000 paid off house. They only see their monthly income, which is negligible .
But if they had their own private RRSP, they would get NONE of the above subsidies as they would be HIGH income seniors, plus their $ 750,000 house would still have mortgage on it, as instead of paying it off they would have been busy contributing towards their RRSP.
Their house is paid off, so basically their only expense is groceries - plus all these subsidies as low income seniors
So pay off your house or condo first during your working years, so you can chill in old age on government money, subsidies & rebates.
Location: Somewhere in dreamland
Posted on: 15-02-18 21:13:34
Quote:
Originally posted by MITRON
1. Always pay of your DEBT which has high interest first like Credit cards, Car loans etc
2. Then Pay off your MORTGAGE so you are Mortgage free in Retirement
3. Then contribute to your RRSP.
The more RRSP you have from your own hard earned money, the less you get in handouts from the government in Old age like GIS.
The less you have in RRSP & the less you have contributed towards your own retirement, the more you have in handouts like GIS from the government in old age
RRSP is nothing but deferred taxes. You might save in tax now. But when you withdraw it, you will be taxed, but hopefully you will be in a lower tax bracket in your retirement when you withdraw from RRSP.
But dollar for dollar any income from RRSP or any other income will be deducted from GIS in your old age. And you won't even be eligible & qualify for GIS if you are NOT a low income Senior.
Very good advice. Thank you for your tips.
Some Western countries like Australia do take note of your assets before giving old age pension and people who have a very expensive primary home will have reduced old age pension.
With the number of refugees and asylum seekers Trudeau and his team are bringing into Canada, those days may not be far away for Canada too
