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Tricky matter. Bond yields loosely follow interest rates set by central banks. For simplicity, let's assume that those 2 are in lock step. Then it remains true that falling rates beget higher commuted values. Beyond that, please book a time slot on my site. Let's explore. Site: Pension Solutions Canada.com

Quick question...I know you said in one of your other videos that low interest rates amd low bond yields means more Commuted value. I hear in the news that the bond yields are really strong and seem to be increasing while interest rates continue to go down. How does that impact the amt of CV you would get? Is one more important to the calculation than the other?

Thanks Bruce, good to have you back on here.

True. The real attraction of an annuity is that you cannot outlive it.

In 2024 blue chip investments or dividend investments should bring in 12.6% here in Ontario

All this talk about not taking government pensions and waiting makes no sense to me if you wait 5 years you have lost at least $30,000 how long does it take to make that money back ?

Is the 10% what the client gets or does the fees come out of that 10%?

I will be forever grateful to you, you changed my entire life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Katherine Storch.

Thanks for the videos and content - very helpful 👍

The comments about incorporating employment income almost certainly won’t work. That advice is at least a decade out of date. The comments about government pensions should be considered and often are good options.

Bad idea, the 5500 hours rule makes this strategy obsolete since 2017.

True. Always best to consult an expert.

Be careful of the personal services business rules. That could impact the tax rate on what would otherwise be employment income flowing into the corporation.

Just came across this. But, do the math. It sounds like you'll have a PSB and that makes the corporate income subject to an ADDITIONAL tax rate of 5% www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-income-tax-return/tax-implications-personal-services-business/obligations-psb.html

Brilliant advice

I paid dearly for not knowing the facts about taxation within holdco. It has taken years before I was able to figure out that CG are taxed favorably. I kept selling US, dividends generating investments, and buying Berkshire Hathaway shares. Paid taxes in the process. After successfully having completed the transaction, I watched Berkshire Hathaway CG with satisfaction. Now retired and ready to pick the fruit, I got hit by a new CG inclusion rate of 66.7%. I look at the screen watching numbers on my account, and I feel like this is not real money. Any move will be heavily taxed.

Thanks so much Cathy. My job is to simplify the complex. Any suggestions for videos, let me know. Cheers

Good video with clear explanations! Thanks!

Do annuities payments follow the inflation?

Can't go direct. Plus, a broker goes to multiple companies

Should I go through a broker to get an annuity or direct to a life company

what's commuted value?

For a defined benefit pension with inflation protection, shouldn't the estimate take into account that the payment will increase annually by the amount of inflation? And, if so, would the total payments over 'n' years with a constant inflation rate of 'i' be: P × ((1+i)^n - 1)/i [instead of P x n] ? And you'd take 60% to 80% of that? Where: 'P' is the initial payment amount (at year 0) 'i' is the annual inflation rate 'n' is the life expectancy minus the current age (e.g., 87 - 65) I realize inflation isn't constant over the years, but taking the BoC's target rate of 2% should be good enough, right?

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All your numbers are very good...BUT... It is the government who administers the CPP. And in my case they...the government... slices my CPP and OAS, by 31%. I worked in South Korea for 12 years and being Canadian I worked in Canada for 31 years. The government of Canada has a social treaty with South Korea. (Treaty -E102217) It states: Article 6 Definition of Certain Periods of Residence with Respect to the Legislation of Canada 1. For the purpose of calculating the amount of benefits under the Old Age Security Act: 1. if a person is subject to the Canada Pension Plan or to the comprehensive pension plan of a province of Canada during any period of presence or residence in Korea, that period shall be considered as a period of residence in Canada for that person as well as for that person’s spouse and dependants who reside with the person..." THEY REFUSE TO HONOUR THEIR OWN TREATY! My appeal has been in the minister's office for more than 6 months and it took 2 years to get there. I do not hold out much hope that, Seamus O'Regan, Minister for Seniors, will rule in my favour. So...CPP is a good thing for Canadians... BUT IT SCREWS OVER LOW INCOME SENIORS WHEN IT CAN...JUST BECAUSE THEY CAN. We do not have the means to hire lawyers. They know this. And they use this.

Hi,I am in a unique situation,my wife is collecting cpp oas and me,being 17 years her junior and working a union job for 30 years with a good pension. Any advice is greatly appreciated.thanks for a informative pod.

Hello Dogs. Ford allow a deferral. That is pretty rare. I don't know if Stellantis allow. Take the CV or not, that's a long conversation. Have a look at my other videos & blogs. Or you can book a free Zoom chat. Cheers

Hi there. Thank you for the video, I’m a new subscriber who works for Stellantis. We finally caught up to Ford and Gm and will have the commuted value option now starting in January 2025. Do you feel in this higher interest rate environment it’s a good move ? Also, you mentioned there is the option to defer your pension in exchange for 5 or 6% more value. How long do you have to defer it for and what are your feelings on that option? Thank you Bruce.

😴 P r o m o S M

I don't fully understand bonds, but I've been trying to get my head around the whole thing for a little while now. So interest rates are up today (a year after you'd posted this), but I thought high interest rates made bonds less appealing... I'm not understanding what this whole bond yield is. I know there's an inverse relationship between bond yields and interest. If bonds aren't appealing when interest rates are high, then what's with all this chatter about bonds right now? I'm not seeing how these things truly work together (or truly work against each other, lol). Can you help me get a better idea about these concepts? Thanks for your time!

Have lots of RRSP room if your employer regularly offers a lump sum early retirement incentive package, some employers offers 12 to 18 months. Don't forget you need to pay your own Extended Health or Dental, some pension plans offer the plans.

Good thing I like peanut butter lol

It's already gone.

Unfortunately my pension plan administrator will only provide a commuted value calculation once I have submitted termination papers. Hard to make an informed choice when left with that option. Any ideas about how to address that?

What are you doing personally? Taking CPP at 70 and OAS at 65?

In these plans I would most often recommend that client keep some life insurance to offset early deaths with these plans. For some I’ve suggested coverage to stay until age 75-85 range . That way if someone dies early you are covering off that lost income , as well as delayed CPP . I plan on delaying mine , thus I have a term policy to cover this to nearly age 80. Just a thought .

Retired at 55 with $1-Mil in my RRSP. Starting drawing down at $100K a year. At 65 my CCP/OAS kicks in. RRSP should be fully depleted by then (more or less). From 65+ my non-reg investments form my income.

That's peanuts

thank you for this easy and understandable explaination

You assume we are looking for an exact answer. the 60% of benefits up to 85 is a good estimate. For those of us looking to leave a position for another one do not have up to 60 days for an estimate. We just want a ball park answer to figure out if we want to withdraw it, sell it to an insurance company, or park it in a LIRA and have an idea for what is left (to pay down debt or mortgage).

My understanding is that If a person elects to take a defined benefit pension plan and pass away, their partner will continue to receive XX% until their death. Should they both pass say in a accident, or die within a few weeks/months of each other, what typically happens to the balance of funds? Doe it automatically go to the estate or get absorbed back into the plan? I'm told in this instance CPP just gets absorbed back and does not go to the estate; but I could be wrong.

straight forward , thanks

What is more beneficial to retire in November or February in following year .

is the yearly ammount you use to calculate the MTV Gross or Net yearly pension?

The Government does all their calculations so that we work until we are almost dead. Most people die before 80 so you won't even get your money back. This is done on purpose. Take a look at how the Government treats veterans or Indians without drinking water. It makes me want to live in North Dakota where they don't pay taxes. Imagine no taxes. We here in Canada are taxed on everything. There isn't anything we don't pay tax on. The Government always has their hand out and claims they need more money. The truth is the Government doesn't care about anyone of us. They are purposely making people poor with taxes so they will have to struggle and work until 70 just to survive. People are waking up to the corruption in the Government and the insult of the crumbles (small pension) that the Government gives us at retirement.

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I liked it when you said “your 60 so what? get over it and get to work! lol 😂 Probably the best overall advice right there. I don’t care about cpp break even points, I care about locking in a 36% reduction for life taking it at 60. I worked for over 40 years just doesn’t seem reasonable to give up so much.

Retiring too young can cause many problems later. 62 is certainly too young. Most of us should wait until 70 to begin collecting a Federal welfare check.