40 Questions
Who coordinates the Canada Pension Plan (CPP) and the Québec Pension Plan (QPP)?
The federal government and the Québec provincial government
At what age must an individual be to contribute to the CPP/QPP?
Over 18 years of age
What is the minimum income threshold required for pensionable employment income for an individual to contribute to CPP/QPP?
$3,500
When can self-employed individuals deduct half of their CPP/QPP contributions?
Since 2001
What is a common investment goal for many Canadians according to the text?
Having a comfortable retirement
Who is required to make both the employee and employer portions of CPP/QPP contributions?
Self-employed individuals
At what age do most Canadians expect to retire, based on the text?
65
Under what conditions do individuals not make contributions to CPP/QPP?
Collecting CPP/QPP disability benefits
Which of the following is a government-sponsored program mentioned in the text?
Canada Pension Plan (CPP)
What are CPP/QPP payments based on?
% of annual earnings between YBE and YMPE
What type of pension plan is known for providing a specific retirement benefit based on a formula?
Defined benefit pension plan (DBPP)
Which concept refers to adjusting an individual's pension contributions based on certain factors?
Pension adjustment reversal
What is the maximum pensionable earnings limit known as under CPP/QPP?
The year's maximum pensionable earnings (YMPE)
What rule governs the splitting of pension income as discussed in the text?
Pension Income Splitting Rules
Which type of pension plan allows employees to contribute to their own retirement fund?
Deferred profit sharing plan (DPSP)
What is the main purpose of Deferred Profit Sharing Plans (DPSPs) as mentioned in the text?
To offer flexible saving options for employees
What is the maximum percentage increase in CPP/QPP retirement pension benefits if an individual delays collecting the pension until age 70?
42%
What must the disability be for a CPP contributor to be eligible for the CPP Disability benefit?
Long-lasting or likely to result in death
Who is eligible to receive survivor benefits under CPP?
Estate, surviving spouse or common-law partner, and dependent children of the deceased contributor
What happens to the CPP Disability benefit when an individual who is receiving it turns 65?
It is converted automatically to a retirement pension
What additional benefit is payable to the estate of a deceased CPP contributor?
$2,500 lump sum death benefit
If an individual chooses to start collecting CPP/QPP pension benefits after age 65, what happens to the pension benefit?
It is increased by 0.7% for every month after turning 65
Which of the following is NOT eligible to receive a children's benefit under CPP?
The child of a CPP contributor who receives the death benefit
If Aurora decides to start collecting her CPP pension at age 69, what percentage increase would she receive compared to starting at age 65?
40.6%
What adjustments can affect the RRSP contribution limit for participants in a registered pension plan (RPP) or deferred profit sharing plan (DPSP)?
Pension adjustments
In the given scenario, what was Janice's earned income?
$130,000
What is the maximum RRSP contribution limit for the year in question?
$27,830
How does deducting the pension adjustment affect Janice's total RRSP contribution limit?
Decreases it
What kind of contributions can clients deduct from their total income?
RRSP contributions
What is the purpose of reducing the amount of income tax by deducting RRSP contributions?
To reduce the tax paid
Which of the following does NOT contribute to determining the total income tax deduction an individual may claim?
$50,000 donations to charity
Janice has $25,000 of carry forward unused RRSP contribution room. What impact does this have on her total RRSP contribution limit?
$25,000 added to her limit
What is the main purpose of a Pension Adjustment Reversal (PAR)?
To increase the RRSP contribution room
In the given scenario, why did Paul forfeit $1,500 of employer contributions?
He did not work for the required 24 months for vesting
Which amount is included in Paul's Pension Adjustment Reversal (PAR) for 2019?
$1,500 of employer contributions
What is the significance of Paul's Pension Adjustment (PA) being $500 in 2019?
It influences his RRSP contribution limit
What is the consequence of not including the $215 interest in Paul's Pension Adjustment Reversal (PAR)?
It excludes part of what he did not actually receive
Why does the employer still need to report Paul's PA for 2019 as $500?
To account for pension adjustments related to employer contributions
What type of pension income can be split between a pensioner and their spouse or common-law partner?
Eligible pension income meeting specific criteria
How does working less than the required 24 months impact an employee's DPSP benefits?
Forfeits the employee's rights to certain contributions
Learn about different ways people finance their retirement, including government-sponsored programs like Old Age Security (OAS) and employer-sponsored programs like Defined Benefit Pension Plans (DBPPs). Understand the main features of various retirement finance options.
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