anyone try the Canadian Retirement Income Calculator?

[human]

Has anyone tried this calculator? https://srv111.services.gc.ca/generalinformation/index

I don't have my official statement but I've been playing around with this thing. Apparently if I stay on track to 50 when I'm eligible for an annual allowance I'll be more than fine according to this calculator. Strange this is when it asks you if you have other non rrsp retirement savings it has a limit on contributions, I can't select more than $958 for bi-weekly contributions.

Has anyone tried this calculator and found it useful? Not sure how accurate it is . . .

[Rightflyer]

Yes. We used it a couple of years ago, just as a double check.

Kinda prefer my spreadsheets though...

[human]

Thanks rightflyer. So it matched your spreadsheets really well or was anything completely off?

[Rightflyer]

My methodology is somewhat different but the end result is pretty close.

One thing it didn't do was take into account taxes i.e. the TFSA is lumped in with other investments. That also then has an effect on OAS/GIS etc.

[human]

I wasn't even aware of that. I guess oas is based on post tax income, I don't even know what effects the amount. I guess higher income lowers oas?

It was a real eye opener I thought with my current plans 50 would be a little tight but cpp really helps. If I knew what a pension pay out would be worth in 8 years I'd consider 45 but I have no idea how to estimate the payout.

[Rightflyer]

The OAS clawback happens at quite high levels of income so that won't affect people like me, but the GIS is based on your taxable income and gets reduced very quickly. Income from CPP/RSP/RIF or a pension will reduce the GIS but income from a TFSA won't.

The other part of the issue is that there was no way to account for the income tax you'll pay on RSP withdrawals but not from the TFSA.

[human]

I just assumed that all non rrsp retirement income was considered taxable and it shows the pre tax amount. Which is ok for me as it seems I'll have more than I thought. I just looked at again and realized i missed the obvious clawback in red for oas. It wasn't too much but I'm almost glad to.see it.

Thansk for the explanation rightflyer.

[SoftwareGoddess]

Another thing that it doesn't account for is your CPP payout being different than the one you enter on the Canada Pension Plan tab from your Statement of Contributions. If you ER, it's very likely that your payout will be lower than whatever appears on your last statement, due to the years not working and contributing to CPP. But if you are not planning to depend on CPP payments in retirement, it won't matter that much.

[human]

It won't allow for a younger age than 50 for retiring but that's when I plan to retire. I ran numbers for collecting cpp and oas at 65 and 70. Would the cpp payout be over estimated for this?

[Zikoris]

They don't "allow" you to retire earlier than 50, so kind of useless for Mustachians. Pretty good for the general population though.

[human]

Which includes me since I didn't start saving until my late 30s! Good for you though, aim higher(or lower?)!

[SoftwareGoddess]

It won't allowing for a younger age than 50 for retiring but that's when I plan to retire. I ran numbers for collecting cpp and oas at 65 and 70. Would the cpp payout be over estimated for this?

Probably, but the rules to calculate the payout are complicated. The payout is based on the number of years you work and the amount you pay into the system starting at age 18. You can "drop out" some low-earning years from the calculations for various reasons, but in most cases, if you have more than about 7 years of low or zero income, then that will reduce your payout.

Lots more info here: http://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/

[human]

Thanks! I've seen that site but hadn't come across that page. It will be useful, I don't have a statement of contributions yet but it will be interesting to try and calculate my actual benefit. I've always thought of the CPP and OAS as a bonus on top of pension and other savings, but it seems it can add up to quite a substantial amount. My pension does have a bridging gap or reduction before CPP kicks in but I still want to see what effect less years in the work force will have.

If I retire at 50 I'll have 31 years of work, not the close to 40-45 many "normal" people have but probably more than most here.