Retirement Finance Programs Overview

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Who coordinates the Canada Pension Plan (CPP) and the Québec Pension Plan (QPP)?

The Canadian Revenue Agency

Each individual independently

The federal government and the Québec provincial government (correct)

The Canadian Ministry of Pensions

At what age must an individual be to contribute to the CPP/QPP?

Exactly 21 years of age

Over 18 years of age (correct)

Under 20 years of age

Between 25-30 years of age

What is the minimum income threshold required for pensionable employment income for an individual to contribute to CPP/QPP?

$2,000

$4,000

$3,500 (correct)

$5,000

When can self-employed individuals deduct half of their CPP/QPP contributions?

Since 2001 Signup and view all the answers

What is a common investment goal for many Canadians according to the text?

Having a comfortable retirement Signup and view all the answers

Who is required to make both the employee and employer portions of CPP/QPP contributions?

Self-employed individuals Signup and view all the answers

At what age do most Canadians expect to retire, based on the text?

65 Signup and view all the answers

Under what conditions do individuals not make contributions to CPP/QPP?

Collecting CPP/QPP disability benefits Signup and view all the answers

Which of the following is a government-sponsored program mentioned in the text?

Canada Pension Plan (CPP) Signup and view all the answers

What are CPP/QPP payments based on?

% of annual earnings between YBE and YMPE Signup and view all the answers

What type of pension plan is known for providing a specific retirement benefit based on a formula?

Defined benefit pension plan (DBPP) Signup and view all the answers

Which concept refers to adjusting an individual's pension contributions based on certain factors?

Pension adjustment reversal Signup and view all the answers

What is the maximum pensionable earnings limit known as under CPP/QPP?

The year's maximum pensionable earnings (YMPE) Signup and view all the answers

What rule governs the splitting of pension income as discussed in the text?

Pension Income Splitting Rules Signup and view all the answers

Which type of pension plan allows employees to contribute to their own retirement fund?

Deferred profit sharing plan (DPSP) Signup and view all the answers

What is the main purpose of Deferred Profit Sharing Plans (DPSPs) as mentioned in the text?

To offer flexible saving options for employees Signup and view all the answers

What is the maximum percentage increase in CPP/QPP retirement pension benefits if an individual delays collecting the pension until age 70?

42% Signup and view all the answers

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 Signup and view all the answers

Who is eligible to receive survivor benefits under CPP?

Estate, surviving spouse or common-law partner, and dependent children of the deceased contributor Signup and view all the answers

What happens to the CPP Disability benefit when an individual who is receiving it turns 65?

It is converted automatically to a retirement pension Signup and view all the answers

What additional benefit is payable to the estate of a deceased CPP contributor?

$2,500 lump sum death benefit Signup and view all the answers

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 Signup and view all the answers

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 Signup and view all the answers

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% Signup and view all the answers

What adjustments can affect the RRSP contribution limit for participants in a registered pension plan (RPP) or deferred profit sharing plan (DPSP)?

Pension adjustments Signup and view all the answers

In the given scenario, what was Janice's earned income?

$130,000 Signup and view all the answers

What is the maximum RRSP contribution limit for the year in question?

$27,830 Signup and view all the answers

How does deducting the pension adjustment affect Janice's total RRSP contribution limit?

Decreases it Signup and view all the answers

What kind of contributions can clients deduct from their total income?

RRSP contributions Signup and view all the answers

What is the purpose of reducing the amount of income tax by deducting RRSP contributions?

To reduce the tax paid Signup and view all the answers

Which of the following does NOT contribute to determining the total income tax deduction an individual may claim?

$50,000 donations to charity Signup and view all the answers

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 Signup and view all the answers

What is the main purpose of a Pension Adjustment Reversal (PAR)?

To increase the RRSP contribution room Signup and view all the answers

In the given scenario, why did Paul forfeit $1,500 of employer contributions?

He did not work for the required 24 months for vesting Signup and view all the answers

Which amount is included in Paul's Pension Adjustment Reversal (PAR) for 2019?

$1,500 of employer contributions Signup and view all the answers

What is the significance of Paul's Pension Adjustment (PA) being $500 in 2019?

It influences his RRSP contribution limit Signup and view all the answers

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 Signup and view all the answers

Why does the employer still need to report Paul's PA for 2019 as $500?

To account for pension adjustments related to employer contributions Signup and view all the answers

What type of pension income can be split between a pensioner and their spouse or common-law partner?

Eligible pension income meeting specific criteria Signup and view all the answers

How does working less than the required 24 months impact an employee's DPSP benefits?

Forfeits the employee's rights to certain contributions Signup and view all the answers