Retirement income projections are based on a number of assumptions. Providing your advisor with your CPP Statement of Contributions is one way to more accurately reflect the income you can expect to receive in retirement.
What is a Statement of Contributions?
The Canada Pension Plan Statement of Contributions shows your earnings each year starting with the year you turned 18 and the corresponding CPP contributions per year. It also provides an estimate of what your pension or benefit would be if you were eligible to receive it now.
You do not contribute to the CPP on earnings above a set maximum level each year. If you've earned more than the year’s maximum pensionable earnings, your statement will show the maximum pensionable earnings amount for those years.
How is it used?
The information on the statement combined with employment expectations to retirement and when you start taking the benefit can be used together to calculate a more accurate estimate.
Because the statement is a picture in time, it is important to note that the “What you would receive today” figure is based on an assumption that you will continue to make that same percentage of CPP contributions to at least Age 60.
That assumption may not be accurate but the information on the statement is very valuable to our team when making estimates for retirement projections.
An estimate of your future contributions is important.
It’s always best to plan conservatively. You don’t want to plan for a maximum CPP benefit and find out that you were way off the mark.
Your benefit could be considerably lower if your contribution level falls below your average for the remainder of your working years. A full retirement at Age 55 for instance, might force you to include contributions of 0 for at least 5 years into your average.
While there are provisions for dropping some low income years, it is best to look at your contributions from Age 18 to come up with a reasonable assumption.
Next Step: How to get my Statement?
- Call the CPP/OAS Information Line: 1-800-277-9914, ask for a Statement of Contributions to be mailed to you.
- You can also print the statement from the My Service Canada Account website.
Bring a copy of your Statement of Contributions to your next meeting so we can include the most accurate assumptions in our planning for you.
As always, don’t hesitate to contact our professionals to discuss further.