Hey Canadians! I need your two cents umm. nickels?.
As FIRE candidates, it is unlikely that we will get full CPP benefits. I recently calculated mine at only 60% of the maximum available.
Completing my taxes today, I then saw that we can voluntarily top-up the CPP contributions, and I started to wonder if this makes sense in FIRE.
So, I tried to figure out what an annuity that provides the same income increase at age 60 as a full CPP benefit would be, and the annuity cost. So far, it appears that the CPP top-up option may be far better than an annuity, at today's rates.
Has anyone else looked into this? When does the voluntary CPP top-up make sense? e.g., only in your last 10 years before retirement (otherwise straight up direct investments are likely better) or ???
Also -- I am trying to figure out if you need to cover the employer CPP portion as well as the employee CPP portion to get credit for a full top-up. I assume so, but let me know if it is otherwise.