29 June, 2018 11:30
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A study by theC. D. Howe Institute says that the people who are saving for retirement would see their benefits the old age security, Quebec pension Plan (QPP) and the Canada pension Plan (CPP).
When combined with benefits from regimes of capital accumulation, such as a registered retirement savings plan (RRSP) or pension plan to defined contribution plan, the deferral of the public benefits would make the retreat more affordable, according to the authors Antoine Genest-Grégoire, Luc Godbout, René Beaudry and Bernard Morency.
Pushing to 75 years
They have proposed to the government to extend the period of deferral of the public benefits to 75 years rather than 70 years. Mr. Genest-Grégoire also suggests that this measure could be implemented quickly.
«Our model demonstrates that this solution would help retirees worried about running out of resources if they live too old or not reaching their retirement income goal. See the decision of the public pension would provide more flexibility to Canadians with average income, or even higher, in the planning of their retirement, to the extent that they have private savings, and that they are willing to use this savings more quickly. «
Manage the risks
The authors point out that the share of retirement income needs can be covered by the public plans increases when the benefits are claimed later. «The subsidy rate of significant associated with these reports also have the effect of lowering the amount of savings needed at the time of his retirement,» said Mr. Morency.
The report would also be a good way to manage the uncertainties related to the fluctuation of markets and the possibility to outlive their savings that arise when retirement planning.
«The deferral of benefits is thus both an effective way to reduce its need for savings and to reduce the risks. Lengthen the deferral periods up to the age of 75 years would provide more flexibility for many Canadians in their retirement planning, » adds the author Bernard Morency.