Exam (elaborations)
FMLY 2400- RETIREMENT PLANNIGN AND THE SOCIAL SAFETY NET EXAM STUDY SET
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FMLY 2400- RETIREMENT PLANNIGN AND THE SOCIAL SAFETY NET EXAM STUDY SET ...
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FMLY 2400- RETIREMENT PLANNIGNAND THE SOCIAL SAFETY NET EXAM
STUDY SET
why of retirement planning - Answer -important (government benefits CPP, old age dont
support most, prepare for sickness, chance to do things didnt do during work life)
-challenging (think theres lots of time, no means to put away for retirement)
common misconceptions - Answer -expenses will drop when I retire
-I can depend on govt and company pension to pay for basic living expenses
-pension benefits will keep pace with inflation
-plenty of time to start saving for retirement
-small amounts of savings wont help
where to begin - Answer -identify retirement goals
-conduct financial analysis (review assets, review liabilities, predict expenses, predict
retirement income)
-review on a regular basis and make adjustments as needed
review assets - Answer -housing
-life insurance
-investments
review liabilities - Answer any debts that wont be paid off prior to retirement
estimate reitrement spending needs - Answer -some expenses go down, work expenses,
clothing expenses, housing expenses, federal income taxes
-some go up, life and health insurance, medical expenses, expenses for leisure
activities, gifts and contributions
-adjust estimates for inflation
financial health of seniors - Answer -improved
-poorest tends to be women, over 80, racialized, new canadians, living on own
-warnings signs (rising debt to income ratio, increase in those 65+ carrying debt,
increase in bankruptcy rates)
, -for those with low incomes preparing for retirement may be almost impossible
major sources of retirement income - Answer 1. public pensions
-old age security
-guaranteed income supplement
-allowance for survivor
-CPP
2. employer pension plans or registered pension plans
3. private savings
-unregistered: RRSPs, TFSA
what is paid under OAS - Answer -old age security, guaranteed income supplement and
allowance
OAS funding - Answer -from federal general tax revenues
OAS program basics - Answer 1. provides monthly benefit to most canadians 65+
2. usually dont need to apply
3. benefits indexed to the cost of living, adjustments made in Jan, April, July and
October
4. benefits not dependent on employment history or retirement status
5. benefits are taxable income
6. pension recovery tax or claw back
7. eligibility
OAS pension recovery tax or claw back (2024 thresholds) - Answer -individuals with net
income greater than $90 997 must repay part of all the max OAS pension amount
-normally the amounts to be repaid is deducted from the monthly payments before they
are issued
-above net income $148 065 (65-74yrs) or $153 771(75+ yrs) OAS pension is eliminated
-claw back refers to income between 90 997-148065 where you get a reduced OAS
OAS eligibility conditions - Answer -65 yrs or over and
1. either canadian citizen or legal resident or canada or
2. if no longer living in canada, have been a canadian citizen or a legal resident of
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