Question About CPP

[cybercoma]

If you want good care in retirement, here's my advice: marry well, have kids and raise them well. The kids will care for you.

So if you don't have kids, your kids die before you, or your kids end up unemployed for an extended period of time through no fault of their own (say they work in the oil patch), too bad so sad? Learn to enjoy cat food, grandma?

[cybercoma]

Without it there would be a crisis.

There was a time we didn't have it. One only needs to read some history books to understand.

[Topaz]

So if you don't have kids, your kids die before you, or your kids end up unemployed for an extended period of time through no fault of their own (say they work in the oil patch), too bad so sad? Learn to enjoy cat food, grandma?

I agree with u and there are people in worse spots, who have lost their jobs, the pay they are making isn't half of what they were making and their adults unmarried kids or kid have to come back home or be homeless and this is putting retired age people under heavy financial burdens and the government wonders why consumer debt is high......they cause it!!!!

[August1991]

You would be shocked how many clients I have who are house rich but are "cash" poor.

msj, do you advise them to sell the house? (Duh.)

Edited September 17, 2015 by August1991

[August1991]

So if you don't have kids, your kids die before you, or your kids end up unemployed for an extended period of time through no fault of their own (say they work in the oil patch), too bad so sad? Learn to enjoy cat food, grandma?

My kids should pay for your decision not to have kids? WTF?

In my universe, math is real. There are consequences. As even the fellow Hippie/pseudo-Buddhists would say to you, Cybercoma, "Karma is a bitch".

====

Let me make my point more plain: A society that allows more people to steal/take from others rather than create something new is not sustainable.

Edited September 17, 2015 by August1991

[msj]

msj, do you advise them to sell the house? (Duh.)

Some, yes.

But it often makes sense for a widow to sell her 2,500 sq foot house and move into something smaller. Especially when you have to pay the attendant care people to help clean it.

The market has been good but who knows how much longer that may last and if you need the cash now because the line of credit keeps going up then why not?

[cybercoma]

My kids should pay for your decision not to have kids? WTF?

Not everyone decides not to have kids. That point went sailing over your head, I see.

[August1991]

Not everyone decides not to have kids. That point went sailing over your head, I see.

IOW, the State should tax people who cannot have kids so that families with kids can live well.

Cybercoma, do you see where this discussion is leading?

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Note to msj and Cybercoma: "Incentives. The rest is math."

Edited September 19, 2015 by August1991

[hitops]

I woud be better off investing the money I'm forced to pay into CPP. What a scam.

Quite true, you are quite smart to do that.....I'm confused.....guessing your name is tongue in cheek? Socialists are not normally bright enough to know that stuff.

Edited September 19, 2015 by hitops

[hitops]

Yes, dying prior to collecting any CPP is the major risk with the program. As is dying while only collecting it for a short period of time.

But let me put it to you this way:

As an accountant with a corporation I used to take dividends rather than wages so I would not pay into CPP.

At the time the math worked - my company paid tax, I paid a little bit of personal income tax, and no CPP was paid. I was able to save enough in tax/CPP that I would save it and would have been satisfied not receiving much CPP when I retired.

Over the past several years the tax rates have changed (on dividends) as to make me change my mind.

I now take out wages instead of dividends. My company deducts the wages and pays less corporate tax. I pay more personal income tax and I (and my company) pay the CPP at the full self-employed rate of 9.9%.

In the end, the math basically is this: I can pay something like an extra $2,000 ish more per year in income taxes and CPP and get CPP at age 65 of approximately $10 or $11,000 per year.

That is not great, but if I live to a decent age (the risk part of this strategy) it is good enough that I do it.

I see it as forced savings/diversification that would allow me to eat dog food in my retirement if TSHTF in my own portfolio.

I'd like to know more about this. I'm currently doing the same thing, leaving a portion of money in the corp and taking all my income in dividends while avoiding paying CPP. Myself and my accountant both conclude this is better in the long run. My tax rate is 12% on the corp, and then the dividend rate for myself. I also income split with wife as 50% shareholder. Am I missing something?

[hitops]

Not everyone decides not to have kids. That point went sailing over your head, I see.

Your points do seem to sail off somewhere....

Being impulsive in sexual decisions or negligent in using contraception is still a choice.

It's like saying you should be taxed because I bought a BMW. I didn't decide to, I just couldn't help it. Now you should pay for me.

Let me make my point more plain: A society that allows more people to steal/take from others rather than create something new is not sustainable.

The people that need to hear this will never understand it. Society that works that way collapses, just as it has when tried historically.

Edited September 19, 2015 by hitops

[msj]

I'd like to know more about this. I'm currently doing the same thing, leaving a portion of money in the corp and taking all my income in dividends while avoiding paying CPP. Myself and my accountant both conclude this is better in the long run. My tax rate is 12% on the corp, and then the dividend rate for myself. I also income split with wife as 50% shareholder. Am I missing something?

Your analysis should compare the total cash flow cost of corporate taxes plus personal income taxes on the dividends versus doing it with wages where you pay the CPP and earn RRSP room (so can defer taxes that way too).

Depends on income, spending, saving etc so everyone is different.

It used to work out ok so I did the dividend thing until 2010 or 2011 but the tax rates changed on dividends as the Feds and BC government got wise to the tax advantage certain "wealthy" people were enjoying.

[cybercoma]

Your points do seem to sail off somewhere....

Being impulsive in sexual decisions or negligent in using contraception is still a choice.

It's like saying you should be taxed because I bought a BMW. I didn't decide to, I just couldn't help it. Now you should pay for me.

The people that need to hear this will never understand it. Society that works that way collapses, just as it has when tried historically.

So how about this then. People who don't have kids shouldn't have to pay for schools or the universal childcare benefit or pediatrics or anything else related to children.

Greed is not a virtue upon which social welfare can be built. It descends us into anarchy and a Hobbesian war of all against all.

[msj]

So how about this then. People who don't have kids shouldn't have to pay for schools or the universal childcare benefit or pediatrics or anything else related to children.

Exactly.

The nonsense about greedy selfish childless couples is so much crap.

I pay a ton of tax to get the nieces and nephews through school and life.

I don't get any UCCB and CTB but I sure pay for that too.

But because I don't conform to what everyone else does and instead put my head down to work hard so I can play hard I'm some sort of greed monster.

It's the rest of society that is greedy: requiring tens of thousands of my tax money each year to raise their children.

The urge to spurt out ones own spawn is selfish and greedy as they rob and cow me into accepting the subsidy of their own decisions.

Then these hypocrites complain when people want wealthier people or corporations to pay more taxes.

[socialist]

Quite true, you are quite smart to do that.....I'm confused.....guessing your name is tongue in cheek? Socialists are not normally bright enough to know that stuff.

I was a socialist, but

i've grown to realize the errors of my youth. I now consider myself to be more of a libertarian.

i

[hitops]

So how about this then. People who don't have kids shouldn't have to pay for schools or the universal childcare benefit or pediatrics or anything else related to children.

Greed is not a virtue upon which social welfare can be built. It descends us into anarchy and a Hobbesian war of all against all.

UCCB: I fully support abolishing UCCB. I don't see why everybody else has to give me $320 per month when they had no choice in whether we had kids. I'll pay for my own kids, I chose to have them.

Here's a plan for schools: Every kid gets a voucher for school, parent can pick where they go. It can only be used for schools. Except if you don't have kids, then your voucher is equivalent to whatever the voucher would be for the average of kids/family is in Canada, and you can use it against your taxes.

Pediatrics/medicare: Everybody should pay 5% of their care to a max of $1000 (or whatever number). This would almost overnight adapt our system to demand and properly fund that demand. Usage would decrease and quality would increase.

Taking responsibility for yourself and your own choices is not greed. The welfare state is not a virtue, is a destroyer of people.

I was a socialist, but

i've grown to realize the errors of my youth. I now consider myself to be more of a libertarian.

That's a common pathway for socialists who gain some knowledge and experience. I did the same in my youth, also moved on to libertarianism, but have settled on being less libertarian due to lack of historical example of successful libertarian societies.

There is a reason that the younger you are, the less you have had to test your ideas against real life, the more likely you vote left.

The urge to spurt out ones own spawn is selfish and greedy as they rob and cow me into accepting the subsidy of their own decisions.

Then these hypocrites complain when people want wealthier people or corporations to pay more taxes.

It's not greedy (it is a massive money-sink without exception) but it is a personal choice, not some kind of national service. Otherwise well said. I have 2 kids but fully support eliminating the UCCB. I'd boot the CMHC, child tax credit, home buyers credit and home renovation credit (soon to come) along with it.

Edited September 19, 2015 by hitops