Planit:Specifying the CPP Amount Received

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This case study is specific to financial planning in Canada, so has fixed values rather than indices by country.

Example Problem One:

Walter tells you his CPP pays out $6,900 annually, while Alice’s CPP benefits pay only $1,932 annually.

Solution Using Detailed Pension Information:

Go to the first screen in the process flow, Personal Information.

File: other5.jpg

  1. The Retire By should be the same as the client's current age, since they are already retired. This is important since you will only being specifying the amount of CPP your clients are receiving if you know the exact amount they are given in retirement.
  2. Under Planning Assumptions, set CPP Eligibility for both clients to 0%, since you can enter in the exact figures yourself on the Pensions and Other Revenues screen.
  3. Click Save

Use the screen drop-down menu to continue to the Pensions and Other Revenues screen.

To enter Walter’s CPP Benefits:

  1. Clicking Add above the existing pensions.
  2. Enter an appropriate Description and set the Owner to Client.
  3. The Amount Per Year is $6,900 as Walter indicated.
  4. The From Year will be the current year since Walter is already retired, and the To Year will be the year of Walter’s assumed mortality at age 90.
  5. The Index Rate will be 3.0% since it is indexed to inflation.
  6. The benefits are 100% Taxable, and right now Walter would receive 0% on Death, and 100% on Disability.
  7. The Model As option can be set to Fixed Period, since now that the benefits have started paying out, they would continue to even if he went back to work.
  8. Click Save

To enter Alice’s CPP Benefits:

  1. Clicking Add above the existing revenues.
  2. Enter an appropriate Description and set the Owner to Spouse.
  3. The Amount Per Year is $1,932 as Alice indicated.
  4. The From Year will be the current year since Alice is already retired, and the To Year will be the year of Alice’s assumed mortality at age 90.
  5. The Index Rate will be 3.0% since it is indexed to inflation.
  6. The benefits are 100% Taxable, and right now Alice would receive 0% on Death, and 100% on Disability.
  7. The Model As option can be set to Fixed Period, since now that the benefits have started paying out, they would continue to even if he went back to work.
  8. Click Save
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