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Another way to boost your retirement income for current pensioners

on Sun, 08/12/2012 - 23:26

Starting January 1st, 2013, a CPP pensioner who continue to work will be able to start receiving a post-retirement benefit (PRB), which is based on a contribution from the previous year.

PRB is calculated yearly and separately every year till the recipient reaches the age of 70, no further contributions can be made. Like CPP, PRB is payable for the pensioners' lifetime. The good thing is: PRB is not subject to maximum benefit rate ceilings. It can be paid in addition to a maximum retirement pension or maximum combined retirement/survivor benefit. 

Like CPP, contributions to PRB are based on a client's earnings in a calendar year and there are limitations on earnings as well. I found a calculator on Service Canada's web site, let's say we have a pensioner who is turning 65 this year and had already kicked in her/his CPP payment. Let's pretend (s)he doesn't make a whole lot, just $24000 in 2012.  The contribution rate is 4.95% and (s)he is getting roughly 7.15% (of that income) the following year and onwards. Looks like a pretty good deal...

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