A Stronger, More Steady Retirement

After a lifetime of diligent effort, Canadians deserve the assurance of a steady and comfortable retirement income.

Canada's social safety net pledges a reliable and stable retirement for all. The cornerstone of this assurance is the Old Age Security program, projected to disburse $80.6 billion to over seven million seniors this year, substantially mitigating elderly poverty. Additionally, the Canada Pension Plan stands as a steadfast foundation for retirement security, offering an average of $8,400 annually to nearly six million retirees.

The sunset years are intended for relishing the rewards of years of toil. Hence, in 2016, the government overturned the previous administration's decision to postpone Old Age Security and Guaranteed Income Supplement benefits for seniors from 65 to 67.

Since 2015, the government has consistently bolstered pensions and benefits for seniors, resulting in a marked decline in elderly poverty. Approximately 11,000 seniors have been lifted out of poverty since 2015, and the proportion of seniors living below the poverty line has decreased from 7.1 percent in 2015 to 5.6 percent in 2021.

Thanks to the government's unparalleled support, seniors currently hold the lowest poverty rate among all age groups. Yet, this wasn't always the case. In 1976, seniors bore the highest poverty rate of any age group. To uphold this progress, the government is safeguarding seniors' benefits and fortifying their pensions.

In ensuring seniors receive the care they deserve, the government will introduce a Safe Long Term Care Act to guarantee adequate care for seniors regardless of their location.

Key Ongoing Initiatives:

• Maintaining OAS and GIS benefits eligibility age at 65, reversing the previous government's plan to increase it to 67.
• Increasing the maximum GIS benefit for single seniors by ten percent, offering up to an additional almost $1,150 in 2023, adjusted for inflation quarterly.
• Enhancing the GIS earnings exemption, allowing a full or partial exemption on up to $15,000 of annual employment and self-employment income for each GIS or Allowance recipient and their spouse.
• Raising OAS payments for seniors aged 75 and older by ten percent, providing over $800 in additional support to full pensioners annually.

A Strengthened Canada Pension Plan:

For the middle class and those striving to join it, Canada's public pensions, including the Canada Pension Plan and the Quebec Pension Plan, instill confidence in retiring with dignity. Moreover, these benefits are indexed to inflation, preserving purchasing power for nearly six million CPP beneficiaries.

CPP Enhancements to Increase Pension Benefits by up to 50 Percent:

Consider Hannah, a newly certified senior welder in Edmonton. Beginning her career with a $78,000 annual salary, Hannah can anticipate a financially steady and improved retirement quality with the bolstering of the Canada Pension Plan. Without this enhancement, Hannah's retirement benefit after 40 years of consistent earnings would have hovered around $16,000 in 2024 dollars. With the CPP enhancement, Hannah's retirement benefit would surpass $24,500 in 2024 dollars, constituting a roughly 50 percent increase.

Additionally, in June 2016, the government forged a historic agreement with provinces to enhance the CPP, gradually elevating the maximum CPP retirement benefit by up to 50 percent. The CPP enhancement rollout commenced in 2019, ensuring Canadian workers a robust and steady retirement, both today and tomorrow.

The federal government and provincial partners continually review the Canada Pension Plan to align it with Canadians' evolving needs. As part of the 2022-24 Triennial Review of the Canada Pension Plan:

Budget 2024 proposes technical amendments to the CPP legislation, in collaboration with provincial partners, including:

• Providing a top-up to the Death Benefit for specific contributors.
• Introducing a partial children's benefit for part-time students.
• Extending eligibility for the disabled contributors children's benefit when a parent reaches age 65.
• Ending eligibility for a survivor pension for individuals who are legally separated following a division of pensionable earnings.

This information has been prepared by Michael Habib who is an Investment Advisor for iA Private Wealth Inc. and does not necessarily reflect the opinion of iA Private Wealth. The information contained in this article comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. The Investment advisor can open accounts only in the provinces in which they are registered. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.

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