# Questions for Discussion

1. Harold’s earns \$42,000 annually working in a retail store. What are his contributory earnings?

2. Amanda has worked as a teacher for 12 years and her annual income is \$90,000. What are her contributory earnings?

3. Thai is a sole-proprietor of a small carpentry business. His net income for this year is \$58,000. What are his contributory earnings? How much will he need to contribute to CPP?

4. Rita is employed by ABC pharmaceutical company as an administrator and earns \$38,000 annually. What are her contributory earnings how much will she contribute to the CPP this year?

How are her contributions treated for tax purposes?

5. Richard is employed as a production manager. Based on his CPP Statement of Contributions, he expects his annual CPP retirement pension to be \$13,577 if he retires at 65 in 2022.

However, for personal reasons, Richard decides to retire earlier and to take his CPP pension when he reaches 60 in 2017. What is the CPP pension benefit amount that Richard will receive?

6. Although Ravi enjoys her job as a nurse, she plans to retire when she reaches 65 in 2014. Based on her CPP Statement of Contributions, she expects her CPP retirement pension in 2014 to be \$11,840 annually.

However, if Ravi decides to delay taking her CPP pension until she reaches 66 in 2015, what would be her delayed CPP pension benefit?

Does the amount of Ravi’s Pension benefit change in 2016? When will the CPP pension benefits stop?

7. Jack and Diane have lived together for 20 years of the 40 years that they have been contributing to the CPP. Diane’s CPP pension benefits are estimated to be \$985/month and Jack’s are estimated to be \$600/month. If they decided to take advantage of CPP sharing and they assigned their pension, what would be the monthly CPP pension that Diane and Jack receive?

Why would Jack and Diane want to assign their CPP pension benefits?

8. “Early – Normal – Deferred CPP” (Text Example, Colleen Clark, Chapter 3, pg. 128) – Myra is 58 years of age and thinks she will live to age 85. She is wondering if she should start collecting her Canada Pension Plan benefits at age 60 or wait until she is 65 or 70. If she waits until age 65, she is eligible for \$11,500 per year. Assume a real rate of return on bonds of 4% per year.

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