This is a multi-part message in MIME format. ---------------------- multipart/alternative attachment George Hatton CA, a financial planner in our office (who knows me well), = has come up with the following. Think I will apply tomorrow. Another former partner, Ross McDonald, in the CEN-TA office in = Abbotsford, BC has also come up with some comments which I am adding to = the end of George Hatton's comments. They are both seeming to say. = "Take me now"! ingram =20 ----- Original Message -----=20 From: George Hatton=20 To: [email protected]=20 I think you have forgotten the time value of money in your consideration = of this question. The calculation is that the amount of money received = will be approximately equal at age 84 if you begin to draw at age 60. = The life expectancy of a 60 year old male, 5'8" and 195 lbs non-smoker, = no heart condition and good driving record is 83.8 years. Go figure. It = is true that, by not taking it now, you will receive more if you live = past your life expectancy, but how will you truly benefit? With = inflation at the current amount of about 3%, what will the extra money = buy? If you do live beyond 84, will what you will be able to buy have = any relevance in your life? Is it not better to draw the money now when = you can enjoy the benefit? As for the potential draw back of OAS, while = the theory is correct, the reality is likely very small, unless the = current income is very high and destined to remain so. In that case, = the question is really not particularly valid as the impact of the extra = income is likely negligible in either case. If the money is not needed = now, a better scenario would be to draw the CPP, and invest the net = after tax. If the space is available, the amount could go to an RRSP = and be tax neutral while drawn down. As you know, the RRIF can pass to = the spouse tax sheltered at time of demise. If there is no RRSP space, = then the net amount could go to a tax effective investment that can = increase income flow without having a major impact on taxable income, = and thus on tax, claw back, or nursing home rental. The higher CPP = subject to claw back, because of waiting, could also be wasted in higher = nursing home rent, a rather vicious form of taxation of old taxpayers! As for you, why not take the CPP now as your life expectancy is about = 78.4 years. You will likely win mathmatically. The extra cash could mean = that you would have to work less, and thus you may live longer! Unless, = of course, you are a philanderer or gad about, in which case you'll be = enjoying life better now than later, and the extra cash could assist to = support your extracurricular activities. The old adage that a bird in the hand is better than a bird in the bush = is most apt here! George Thanks George, Ross McDonald adds the following as well ----- Original Message -----=20 From: Ross McDonald=20 To: [email protected]=20 Hi David, Re the CPP question. Another thing to consider, especially when you are = self employed, is that between 60 and 65, if you elect not to collect, = you could potentially pay in approximately $3500 x 5 years ($17,500) - = and although this amount is deductible in one form of another it is = still a significant cost and will add to the number of years you have to = live to "break even" compared to collecting early. In order to collect = early however you have to "quit" working for at least one month and have = an earned of under $800 for that month. Yet another consideration is = that collecting early will reduce the CCP Disability payments you may be = receiving or be eligible for. Ross -----Original Message----- From: [email protected] = [mailto:[email protected]]On Behalf Of = [email protected] Sent: December 26, 2003 4:03 PM To: CENTAPEDE Subject: Canadian wants to know when he should take out = CanadaPension Plan from www.Jurock.com 'Ask an Expert' ask an income tax = guru specialist cpnsultant experts QUESTION: Is someone better off taking their Canada Pension at age 60 = or wait until 65? I am 60 years and am on a modest company pension. I = have a small income from GIC's and other investments. If I understand = correctly, If I start collecting CPP now at a reduced amount, at the end = of twenty years I will have collected the same total amount as I would = have if I started collecting at age 65 years. Thanks. = -------------------------------------------------------------------------= -- david ingram replies: You will either like the answer or not like it. I am 61 and can't = make up my mind either. If you die before you are 65, there is no doubt = that you would have been better off taking it now. I have decided to keep on contributing because I can and am still = working. If I was retired and not going to work anymore, I am pretty = sure I would take it now. A small thing but there nevertheless is that taking a smaller amount = for ever could result in less clawback of the old age pension when you = hit 65. Not much help but there it is. I think you should take it now unless = you can tell me what day you are going to leave this mortal earth, in = which case we could calculate your options exactly. If you know you are going to live till 90 for instance, you are = definitely better off waiting longer to start. =20 On the other hand, if you are a philanderer and might get shot by an = irate husband next week, you should definitely start now. David Ingram's US/Canada Services US / Canada / Mexico tax and working Visa Specialists US / Canada Real Estate Specialists 108-100 Park Royal South West Vancouver, BC, CANADA, V7T 1A2 Calls accepted from 10 AM to 10 PM 7 days a week Res (604) 980-3578 Cell (604) 657-8451 Bus (604) 980-0321=20 [email protected] www.centa.com www.david-ingram.com Disclaimer: This question has been answered without detailed = information or consultation and is to be regarded only as general = comment. Nothing in this message is or should be construed as advice = in any particular circumstances. No contract exists between the reader & = the author and any and all non-contractual duties are expressly denied. = All readers should obtain formal advice from a competent financial, or = real estate planner or advisor & appropriately qualified legal = practitioner, tax or immigration specialist in connection with personal = or business affairs such as at www.centa.com. If you forward this = message, this disclaimer must be included." This from "ask an income tax and immigration and bankruptcy expert" = from www.centa.com or www.jurock.com or www.featureweb.com. Canadian = David Ingram deals daily with tax returns dealing with expatriate: multi jurisdictional cross and trans border expatriate problems for = the United States, Canada, Mexico, Great Britain, the United Kingdom, = Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, = Antarctica, Japan, China, New Zealand, France, Germany, Spain, Italy, = Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, = Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, = Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, = Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, American and = Canadian and Mexican and any of the 43 states with state tax returns, = etc. income tax wizzard guru advisor specialist consultant taxman Alaska, = Alabama, Arkansas, Arizona, California, Colorado, Connecticut, = Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, = Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, = Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, = Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,New = York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. = Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, = Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, = British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, = New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon = and Northwest and Nunavit Territories, Mount Vernon, Eumenclaw, Coos = Bay and Dallas Taxman and Tax Guru Your name has been added to our = email list because of an enquiry we have received, we may not answer = your question but=20 another similar question will be as we lump them. You may find more answers at www.centa.com David Ingram of the CEN-TA REALTY Group US / Canada / Mexico tax and working Visa Specialists US / Canada Real Estate Specialists 108-100 Park Royal South West Vancouver, BC, CANADA, V7T 1A2 (604) 980-0321 - Fax 913-9123 [email protected] www.centa.com www.david-ingram.com ---------------------- multipart/alternative attachment An HTML attachment was scrubbed... URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/b06285bb/attachment.htm ---------------------- multipart/alternative attachment--
