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Hi
I am working on contract, how i can get maximum pension when i retire.At present i am 35 and i am self empoyed.
I heard about CPP contributions,and Rssp.which is benefical for me.
Thanks
Sincerely
IXXXXXXXXXXX
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david ingram replies:
I gather that you arfe new to Canada from the nature of your quesiton and your age.
The Canada Pension Plan is mandatory and is paid by all employed or self-employed Canadians between 18 and the day they start taking the pension out which is usually between 60 and 70 unless they become disabled and take it out earlier in the form of a disability pension.
The premiums are roughly 10% of a maximum of $40,000 with about a $4,000 deductible. Roughly speaking then, you would pay (as a Self employed person) a maximum of $3,600 premiums or $1,800 as an employee. (when you are an employee, your employer pays half. When you are self-employed, you pay both halves. CPP is only payalbe on earnings for services. You cannot pay CPP on investment income or rental income or capital gains.
RRSP's are a little different. They are a voluntary contribution you make based upon 18.5% of your earned income from the year before. the maximu this year is $14,500 of contributions which then becomes a tax deduction. However, if your incoem was only $10,000, you could only put in 18.5% of the $10,000 for a maximum of $1,850..
When you do not have the money to put in this year, the amount that you could have put in gets carried forward and you can make more than one years's contirbutiosn in a year when you have the money to do so.
In the case of RRSP contributions, rental income counts towards the amount you can put in. A Rental loss and EI premiums and a few other things also come OFF your income when it comes to calculating your allowable amount.
This has been quick and dirty. If youlive int eh Vancouver Area, George Hatton is ourt RRSP? specialist with Cartier Partners (Which has just been bought out by Dundee Investments) is available for individual consultations and sales at (604) 913-9137 or [email protected]
>From your email address, I would guess that you are in Toronto or Ontario however.
David Ingram's US/Canada Services
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Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
This from "ask an income tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
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Your name has been added to our email list because of an enquiry we have received, we may not answer your question but
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You may find more answers at www.centa.com
David Ingram of the CEN-TA REALTY Group
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