connecting with your future: retirement planning “when to hang up my skates” Clarence Potvin

discussion topics when can I take my retirement ? how to calculate my retirement ? documents to be signed other revenues available health and benefits secrets to retirement

I may hang up my skates when… 60 years old and 20 years of service (no penalty) Age 65 (no penalty) Factor 85 (age + service) (no penalty) 50 years old and 20 of service (reduced pension – 3% per year) 55 years old and a minimum of 2 years of service (maximum of 30% penalty) What is your factor? How many years do you have left ?

specific dates for your retirement Your annual CAAT statement could indicate up to 3 dates without penalty first date for a reduced pension when you’re 65 years of age Your retirement date is always at the end of a month (eg. September 14 becomes September 30th)

how to calculate your pension The CAAT Web site offers a tool to calculate your pension http://www.caatpension.on.ca This tool gives you an approximation only The calculation is based on the average of your best 60 consecutive months (not necessarily your last 5 years)

what is the bridge amount? an amount of money added to your pension until the age of 65 has nothing to do with the CCP payments that you may receive, starting at the age of 60 if you take a reduced pension, your bridge will be also reduced by the same amount payments stop in the month in which you turn 65 years of age

taking a reduced pension If you decide to take a reduced pension (before factor 85 or age 65 or age 60/20 years service), there is a penalty of 3%/year The calculation is always based on amounts of which the lesser penalty is the one applied

taking a reduced pension cont’d Example – you are 55 and have 21 years of service Calculation 1 : 65 years old (65– 55 = 10 x 3% = 30% penalty) Calculation 2 : 60 years old with 20 years of service (60 – 55 = 5 x 3% = 15% penalty) Calculation 3 : factor 85 (85 – (55 + 21)) / 2 = 4.5 x 3% = 13.5% penalty) Therefore, the penalty is the lesser – 13.5% on both the pension and bridge

how to increase my pension Take a better paying position For faculty, a coordinator position gives you extra pensionable monies (also an 11th month) During a strike, you not only do not get paid but you do not contribute to your pension (strategy: buy back your pension credits after the strike if it will be used to calculate your best 60 consecutive months) Furthermore, if you receive work reduced contracts (ie: work 10 months a year) that allows you to buy the other month`s pension, do so for the same reasons mentioned above

your pension is protected A percentage of the cost of living will be added to your pension and bridge every year (eg: 2011 – 1.15%, 2012 – 2.14%, 2013 – 1.45%, 2014 – 0.68%, 2015 – 1.29%) When you officially retire, you will have to choose a survivor benefit of 75% (a smaller pension amount) or 60% (regular pension) (check the difference and make some calculations – it is not 15% less) Minimum of 60 months of pension is guaranteed (not the bridge)

steps to follow before retiring Request (optional), via HR or the CAAT website for pension calculations (you may start asking this within 5 years of retirement and you may specify 2 or 3 different dates) Pick a date (end of a month) Fill out the form (TRD) – termination, retirement and death (60% versus 75%) Fill out the health insurance forms for Sunlife or investigate other possibilities… you have 30 days after your retirement date to choose

other possible monies There are 2 other potential monies for retirees (CPP – Canada pension plan and OAS – old age security) CPP (available from the age of 60 – reduced by 36% or differed up to the age of 70 – increase 42%) CPP maximum for 2015 at age 65 is 1,065/month (12,780$ yearly) and is indexed to the cost of living

other possible monies cont’d Old age security (OAS) is a maximum of $563/month for 2015 ($6,756 yearly) and is also indexed with the cost of living As of the 1st of July 2013, you may differ your OAS like your CPP payments up to the age of 70 (7.2% increase/year) Must ask for your CPP and OAS pensions 6 months prior to achieving the dates

other revenues available Retirement 60 years 65 years + Pension for life Bridge CPP (reduced) Old age security Your personal savings

new ages for the old age security pension

your monthly pension payments You receive a monthly pension payment (pension + bridge) on or before the 1st of the month deposited into your bank account If you live outside the country, a cheque will be sent Taxes (federal/provincial) are the only deductions that you will have; no more union dues, parking fees, pension contributions, CPP, EI, etc.

3 options with Sunlife (Plan 1, 2 & 3) health insurance 3 options with Sunlife (Plan 1, 2 & 3) Plan 1 is basically what you are getting right now (approximately $425 a month) If you choose Plan 1, you may reduce it to Plan 2 or 3 but you may never step up again If your spouse has a plan, you may coordinate the benefits or tell Sunlife that you have another plan and may come back to Sunlife later

health benefits cont’d The costs vary according the age of the retirees and spouses At the death of the retiree, the coverage continues for the spouse (and dependant children) for their lives Life insurance, dental coverage are additional coverages that you may or may not want to purchase

secrets to retirement Develop and add interests/passions before retiring (36% of Canadians return to some form of work) Prepare a retirement budget (be honest in your calculations and prepare it with your spouse) Don’t be afraid to ask questions – too often we take things for granted (Call CAAT at 1.866.350.2228 or send me your questions – pension.clarence.potvin@gmail.com)