Canada Pension Plan

R. Victor Klassen rvklassen at gmail.com
Fri Feb 20 07:19:37 EST 2015


This is really no different from (say) Quicken, in that you’re best off handling CPP on the side.  And it’s not a whole lot different from Social Security in the US, in that you’re best treating it as a tax. Only CPP generally runs closer to solvent, but that’s a different story.

For retirement planning, what you really want to know is whether you’ll have enough to live on when the time comes.   So you need to crystal ball gaze for the rates of inflation and investment return, and you can budget what your retirement expenses would be if you were to retire tomorrow [your house would be paid off, right?  your income taxes would be lower, based on lower income and a pension deduction, and so on]   Then for the income side,  look at what you can draw from your retirement savings - a spreadsheet will let you calculate the value of your retirement savings every year assuming an inflation-adjusted annual draw and your choice of annual rate of return.  Here’s where you add in estimated CPP and OAS. 

GNUcash - will help you with the budget part;  you have to do the rest.   Although there are also some online retirement calculators that let you include CPP or its local equivalent, and basically do what the spreadsheet would do.


On Feb 20, 2015, at 12:07 AM, Edward Doolittle <edward.doolittle at gmail.com> wrote:

> Thanks, that's helpful. What I'm taking away is that despite the word
> "pension" in the title of the program, the CPP is more like a tax than a
> pension plan, in that the benefit is largely unpredictable and out of my
> control. I treat tax as an expense, so I should treat CPP as an expense as
> well.
> 
> Furthermore, if I want to do retirement planning well, I need to take data
> out of GnuCash and put it into another application like a spreadsheet, and
> combine that data with data from other sources such as the ServiceCanada
> web site. I can't do everything in GnuCash. (Too bad.)
> 




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