Other Sources of Retirement Income
CANADA PENSION PLAN (CPP)
Most working Canadians are required to contribute to the Canada
Pension Plan (CPP). When CPP started in 1966, the decision
was made to blend (integrate) CPP contributions with those of the
existing pension plan rather than pay an additional contribution
to CPP. As a result, a portion of your contributions to the
OPSEU
Pension Plan is reduced (see contributions to Plan
example). You will receive
two payments - one from CPP and one
from OPTrust. To receive CPP, you must apply for it through
Human
Resources and Skills Development Canada, Income Securities Program. You
can receive CPP at age 65 or as early as age 60 with reductions
in your CPP pension for early payment. The CPP reduction is
6% per year for every year you are less than 65. The maximum CPP
retirement payment at age 65 in 2005 was $828.75 per month.
OLD AGE SECURITY
In addition to CPP, you may be entitled to a monthly retirement
benefit from Old Age Security (OAS). It is payable monthly and
indexed quarterly. Your pension from the OPSEU Pension Trust
is not adjusted due to OAS payments. OAS payments are separate
from OPTrust and CPP payments. OAS starts at age 65 and cannot
be taken any earlier. In the first quarter of 2004, maximum OAS
monthly basic benefit payments were $471.76.
RRSPS, EMPLOYMENT INCOME, SAVINGS, HOME EQUITY AND INSURANCE
You may have alternate sources of retirement income over and
above your pension and government pensions. RRSPs can provide a
supplement
to your pension or they can be kept until age 69 and then converted
into Registered Retirement Income Funds (RRIFs) or annuities.
Many pensioners choose to continue employment in either a full-time
or part-time capacity as a means of supplementing their pensions.
If you choose to return to work for an employer who contributes
to the OPSEU Pension Plan, please read the section on
re-employment.
If you own your home, you may decide to move to a smaller place
to use the home equity for living costs and reduce expenses. Personal
savings can also be a source of more liquid assets in retirement.
Life insurance options are available which offer a variety of
packages from term to whole life annuities. This is a competitive
field so you should explore your options and research the alternatives
available.
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