Re: IRB CPP and OAS

by Unknown Soldier Tue 08 Sep 2020, 11:40

AirLog wrote:Good question Xnurse. I am 61 and keep looking at the math to find the best course of action for my particular financial situation. About a year ago I did correspond with VAC on this very issue and they informed me if I deferred my CPP and OAS then there would be no offset until I started to receive my CPP and OAS. This is what VAC replied to me,

"It is my absolute pleasure to provide you with the information you need to make those difficult decisions.

I have received an answer in regards to your question. If you chose to delay CPP from age 65 to age 70, VAC will not use CPP as an offset for that period of time. Should you chose to do so, you would, however, have to provide proof that the CPP benefit has stopped once you reach age 65. As I said, CPP will be added as an offset automatically once you reach the age of 65, so a proof will be required to remove it at that time. You would also have to provide proof again once the benefit restarts at age 70.

Would you like for me to contact you by phone to discuss this further, or has this answered your questions? If you would like a follow-up by phone or have any additional questions, please don't hesitate to reply to this message.

Thank you."

Lots to consider when making the 65 year old decision. Very personal but, it would be nice to hear someone's experience that they had at 65.

AirLog

I’ll keep this in mind , does this mean they will not drop your IRB to 70% as long as you don’t take cpp

by AirLog Tue 08 Sep 2020, 09:22

Good question Xnurse. I am 61 and keep looking at the math to find the best course of action for my particular financial situation. About a year ago I did correspond with VAC on this very issue and they informed me if I deferred my CPP and OAS then there would be no offset until I started to receive my CPP and OAS. This is what VAC replied to me,

"It is my absolute pleasure to provide you with the information you need to make those difficult decisions.

I have received an answer in regards to your question. If you chose to delay CPP from age 65 to age 70, VAC will not use CPP as an offset for that period of time. Should you chose to do so, you would, however, have to provide proof that the CPP benefit has stopped once you reach age 65. As I said, CPP will be added as an offset automatically once you reach the age of 65, so a proof will be required to remove it at that time. You would also have to provide proof again once the benefit restarts at age 70.

Would you like for me to contact you by phone to discuss this further, or has this answered your questions? If you would like a follow-up by phone or have any additional questions, please don't hesitate to reply to this message.

Thank you."

Lots to consider when making the 65 year old decision. Very personal but, it would be nice to hear someone's experience that they had at 65.

AirLog

by Guest Mon 07 Sep 2020, 22:36

I’m not sure if splitting CPP affects your IRB calculation. My assumption would be that the department is pretty careful to make sure you’re not getting any extra. I know it can make a big difference in your taxes if you’re married or common-law. I was wondering if there were someone here who might have passed the 65 recently and might know how everything looks after the IRB reduction and OAS etc kicks in?

by **Kramer** Mon 07 Sep 2020, 13:19

One can Pension Split with other pensions.

I am not sure of all the benefits/pros but it definitely helps with the taxes and for those with an approved DTC it can be substantial.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/pension-income-splitting/eligible-pension-income.html#qualify

Riddick

by AirLog Mon 07 Sep 2020, 11:13

Good morning Xnurse,

So besides saving some tax, does this approach (splitting CPPD) have any advantage with respect to IRB, etc? I am on CPPD and receive IRB from VAC.

AirLog

by Guest Mon 07 Sep 2020, 10:44

When you start taking CPP retirement benefit, you can apply to split payments with your spouse (both pensions are split so it’s not always beneficial). Since I’ll be getting more taxable income after 65 than my wife, it’s better for me to split the CPP and reduce our total tax bill.

by Unknown Soldier Sun 06 Sep 2020, 13:47

Xnurse wrote:Are you on CPP disability? I found out they automatically start my retirement CPP at 65 because that’s when they stop the CPPD. Considering they’re going to drop my IRB by 30% at 65, I don’t think it’ll make any difference to what I’m getting in the bank at the end of the month. And if I make 65 on IRB it continues for life. The only question I have is whether my IRB will make up the difference if I split my CPP with my wife? If anyone’s been through the retirement transition on IRB please chime in?

I’m on CPPD , that’s one of the deductions that came off my IRB, so l didn’t really lose any money monthly , it’s just now coming from 2 Seperate sources. What’s this splitting of your CPP with your spouse?.?, how exactly would something like that work, what would be the purpose, to stay under a certain income take home pay for taxes?

by Guest Sun 06 Sep 2020, 10:34

Are you on CPP disability? I found out they automatically start my retirement CPP at 65 because that’s when they stop the CPPD. Considering they’re going to drop my IRB by 30% at 65, I don’t think it’ll make any difference to what I’m getting in the bank at the end of the month. And if I make 65 on IRB it continues for life. The only question I have is whether my IRB will make up the difference if I split my CPP with my wife? If anyone’s been through the retirement transition on IRB please chime in?

by Unknown Soldier Sat 05 Sep 2020, 22:12

NavAir7899 wrote:Am on DEC and receiving IRB and turning 60 soon and trying to decide to take CPP or defer it. If we take CPP and OAS, the amounts will be deducted from the IRB. When the bridge portion of our normal pension is deducted I assume the IRB will increase by that amount to remain at 70 percent which is what we should get after 65? Thinking to defer my CPP and OAS in hope that the policy will change in the future. Any thoughts or recommendations?

I guess it comes down to whether you are getting by well enough without the other 2, I thought about it myself though I’m not as close as you, if you take either or both and that amount is only going to be deducted from your IRB, you not really getting ahead, it may even 0 a vets IRB in some cases. Personally I want VAC to pay me as long as I can make them for what they’ve put me through. I even though about deferring my CPP to 70, to see if IRB fails to drop because the veteran did not take CPP at 65. Maybe VAC just assumes every vet will. I’ve already had my IRB whittled down twice to due income I have coming in from other sources. I think I can get by without taking CPP and OAS right away, but didn’t even know you could defer OAS?

by NavAir7899 Sat 05 Sep 2020, 18:13

Am on DEC and receiving IRB and turning 60 soon and trying to decide to take CPP or defer it. If we take CPP and OAS, the amounts will be deducted from the IRB. When the bridge portion of our normal pension is deducted I assume the IRB will increase by that amount to remain at 70 percent which is what we should get after 65? Thinking to defer my CPP and OAS in hope that the policy will change in the future. Any thoughts or recommendations?

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