Working past 65? Beware this Canada Pension Plan oddity

The government works in mysterious ways. The intent behind some of their pension rules is mystifying at best and counterproductive at worst. A great example is a little-known anomaly in the Canada Pension Plan rules that Jamie Golombek, managing director of tax and estate planning at CIBC Private Wealth Management, recently brought to my attention. It involves what happens to CPP benefits and contributions at the age of 65 under different scenarios. The anomaly is best described by an example. Consider two seniors, Hart and Borden. They are twins who were separated at birth. Both started to work at the age of 23 and continued to work right up until 65. They both contributed the entire time to the Canada Pension Plan so they are entitled to the maximum pension, which happens to be $1,114 a month in 2017. (I will ignore the pennies.)

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Article by Fred Vettese, chief actuary of Morneau Shepell.