hi welcome to today's video and thanks for joining me today we're going to be talking about this subject the Canada Pension Plan changes for 2025 we're going to be looking at the three big changes that will happen with Canada pension plan who it's going to affect the amounts that um you ought to be receiving and then we're going to be asking you a question about your comments about Canada pension plan at the very end so stick around I'm really interested to hear your comments so as as always put your comments below I love reading these
comments and uh let's get started there are three enhancements that happen to the Canon pension plan the first is inflation adjustment the second is ymp this is the year's maximum pensionable earnings this is the amount of money the government is using to tax you for your contributions towards the Canada Pension Plan of course you may be aware there's a second tier I'm going to get into that as well to show you what that means and the third adjustment is the wage growth that's happening right now 2025 all these enhancements that they been doing on the
can pension plan will be completed and we're going to find out who um these enhancements are going to benefit the most so the first thing we're going to look at is well higher payouts for Canada pension plan you can expect your your CVP payments to go up by 2.7% this year the way that that is um calculated they look at the last 12 months of inflation ending October of last year and they tell us that it was 2.7% I don't believe them I know that groceries cost me double digit um uh increases in gas and
so interesting to see where that 2.7 came from and old age security is calculated on a quarterly basis so we should find out about what old age security payments how much they're going up by as well but it's likely they'll be going up by U about the same Canada pension plan enhancements this is designed to move Canada pension plan from replacing 25% of your earnings while you working your annual earnings to 33 % so that's that's good news right so we we'd be getting more money when we retire things are going up so the government
is also increasing the amount of money that we'll be receiving but we'll find out who's actually getting that money and so starting this year the maximum that the government is going to be using of your income to tax you towards your can of pension plan is $81,300 and this will benefit mostly people who are going to retire in 30 years but I have a great illustration to show you who this is that really going to benefit so you'll be to see yourself in these things so let's talk about Canada pension plan and cvp2 the earning
ceiling for the first tier of the Canada Pension Plan is $71,500 it was 68,500 and the second ceiling is now going um up to $81,300 so that was the highest ceiling right so there are two if you make greater than $81,300 you're going to be contributing up to that $81,300 it's not a big amount of money um for everybody in that second tier but it is an enhancement to the Canada Pension Plan all right let's look at who this is going to benefit so visually let's have a look at this we've got Robert who is
65 years of age today he started working in 1980 and there's going to be no changes so if you're 65 years of age or older you're not going to get any benefit from what's going on with the Canon pension plan so you can just say as Robert's doing way bye-bye it doesn't matter for me and then you've got Steve who's 4 years of age he started working in 1990 he's going to retire in 2030 he'll get about $500 more per year because he's contributing both the cpp1 and cpp2 then you've got John age 34 John's
going to retire in 2050 started working in 2010 and John's expected to get about $2,500 of extra benefits when he retires because he's got 25 years to go so he's contributing longer but this is who it's going to benefit the most and that is the people that are 19 today they're either just in the middle of University or coming out of University they have 40 Years of contributions in front of them this is who's going to get this big enhancement so really the the Steve and John are contributing but really won't benefit all that much
Connor is going to have the line share of um what's going to be in the CPP enhancement 2025 payouts let's talk about that in January the maximum payout for the Canada Pension Plan will be $1,433 starting at age 65 any guesses as what the average is in Canada is about $800 why is the average only $800 because of either periods of low employment so low earnings no employment there's periods of really just not being in Canada so there's parts of it where you may have gone out of Canada for a little bit of time so
that could be cont uh could be considered low or no employment and people taking their Canada pension plan early so when you take it early you don't get the maximum benefit so and surprisingly most people don't take Canada pension plan at 65 it's actually lower around 62 63 so that you can see why the average is much lower now how do you figure out how much Canada pension plan you're going to receive well there's a couple different ways you can go online and create a my Service Canada account and there you'll be able to see
the estimate for your canidate pension plan and the second is if you just call CPP there's a number right there you can just write that number down and uh interest L you call it from Canada United States now keep in mind when you're calling and asking this question how much is my CPP going to be they're going to give you the number assuming that you're working and you're contributing the full amount to your candidate pension plan until age 65 so bear in mind that if you are retiring at 58 you're not getting that you're getting
a lesser amount if you're retiring at 60 and you're not contributing to 65 there's 5 years of zeros right so you have to ask the question if I work and contribute to this age what is my estimate that's a better question to ask okay and some people say well I'm not going to call a Canada pension plan because and I wait too long during Co the wait times are three hours or longer and here's the wait times for the last year and every month you can see how long it took before they picked up your
call and I'm not here to Advocate and cheer for Canada pension plan in the government but it's actually pretty surprising isn't it that the waight times were actually not that long at all okay big question for you for those of you who are nearing retirement and I want you to look back and think about was CBP and oldage security you're you're nearing retirement so when you think about was CPP and old age security more or less needed for retirement so it's really when you look back in other words when you look back is it surprising
to know that Canada pension plan and old AG security became a big part of your planning that you it was something that you really relied upon and maybe you didn't think it was going to be cuz when I talk to younger people they go I can have pension plan it won't even be around when I'm when I go to retire or I'm going to make so much much money I'm not going to need it anyway and then when I talk to retirees now many Canada many retirees are really relying on Canada pension plan to supply
them with enough money to retire to make their own personal savings last a little bit longer or a lot longer so my question to you is are you surprised by what you're seeing as you're moving into retirement was it something that you thought you weren't going to need but now you do need I'd love your comments about this just to hear what you have to say well thanks again for sticking around in this video it was great to see you as always I love to hear your comments so please put your comments below and I
look forward to seeing you in the next video thanks and be well
