Retirement Planning

Question 1

What is CPP?

Answer 1

Canada Pension Plan- a contributory, earnings-related social insurance program. It Ensures a measure of protection to a contributor and his or her family against the loss of income due to retirement, disability and death.

Question 2

Who Contributes to CPP?

Answer 2

Every person in Canada over the age of 18 who earns a salary must pay into the Canada Pension Plan. Employees and employers each pay half of the contributions (currently 5.45% of pensionable earnings).

Self-employed individuals pay both portions.

Question 3

At what age do CPP contributions stop?

Answer 3

At age 70, all contributions stop even if the individual has not stopped working.

Question 4

What are contributions based on?

Answer 4

Contributions are based on salary.

For self-employed individuals, contributions are based on net business income (after expenses).