OTTAWA – The Harper government will look at allowing people to stash more of their earnings into the Canada Pension Plan to boost retirement savings. Following is a quick look at various programs available to seniors.
The Canada Pension Plan: A monthly payment for those who have worked and made at least one valid contribution to the plan. Standard pensionable age is 65, but people may take a permanently reduced pension as early as age 60 or take a permanently increased pension after age 65.
Old age security: A monthly payment available to most people 65 years of age and older who meet the Canadian legal status and residence requirements. Employment history is not a factor in eligibility.
Guaranteed income supplement: Available to legal residents who get old age security cheques and whose annual income is below a certain amount.
Monthly allowance: For those age 60 to 64 whose spouse or common-law partner gets an old age security cheque and is eligible for the guaranteed income supplement.
Registered retirement savings plan: Allows people to save for retirement with tax-deductible contributions. Income earned in the plan is usually exempt from tax as long as the funds remain in the plan. Taxes generally apply when assets are withdrawn.
Pooled registered pension plan: Applies to people employed or self-employed in the Northwest Territories, Nunavut or Yukon, those who work in a federally regulated business or industry for an employer who chooses to participate in a pooled plan, or those who live in a province that has the required provincial standards legislation in place. Your contributions, your employers’ contributions and any lump-sum contributions, are all pooled together.
Tax-free savings account: Allows contributions of up to $5,500 a year (rising to $10,000 if existing budget legislation passes). Investment income is tax free.