Currently, employees have to pay roughly 5% of their income up to around $50,000 to the Canada Pension Plan. Their employers must match this amount. In simple terms, this is up to $2,500 per year, per employee, for both the employee and employer.
There are changes beginning in 2019 to gradually raise this amount to around 6% from around 5% while indexing the maximum pensionable amount. By 2024, the amount you pay CPP on is estimated to be over $66,000, and the rate around 6%. This is around $4,000 paid by the employee and around $4,000 paid by the employer.
There is then going to be an additional amount of another 4% for people earning more than this amount on the next $10,000 of earnings… ($400 per person)… but let’s just focus on the under $66,000 crowd for now.
The current system forces the employer and employee to contribute to a plan that they have no control over, and the government decides the rules, the investments, and the amount you get back when you can collect. If you die, your spouse may get a spousal benefit, but if you both pass away, there is nothing left behind to the next generation, siblings, charity, etc.
So let’s brainstorm.
What if, instead of a 5%… soon to be 6%… mandatory CPP contribution by employees and employers, we made it a mandatory 6% from both sides to an individual employee Locked-in Retirement Account or LIRA that the employee-owned (not the government nor the employer).
Now I’m not referring to the current technical definition of a LIRA necessarily, as I’m not an expert on retirement investment products. However, I am referring to the possibility of keeping your pension for your family, secured for later use, rather than letting the government dictate and take it from your family after death.
This “LIRA” could have the same characteristics of the CPP in that you can’t touch it until 60… and you must take it out or convert to a Registered Retirement Income Fund (RRIF) by 71. This will provide more control over the individual receiving the amount while locking it in for retirement.
It would also allow for the money to be transferred to a spouse, children, estate, or make a legacy donation upon death, rather than get eaten up by bureaucracy.
Many small business owners can’t afford to pay more benefits than what the government is already mandating, and that’s fine. I’m not saying increase or decrease the amount. I’m saying change the beneficiary.
As an employer myself, I want to provide for MY employees and their families. Why should their loved ones suffer financially because of a premature death of the parents? The money the parents paid into the CPP all their life is now being used to fund someone else’s retirement.
The CPP rewards longevity.
You would be better off to hook yourself up to a machine in perpetuity just to keep you alive and the cheques coming into your bank account for your descendants, than to die of natural causes.
However, families that need the money the most, need it usually because of a result of a premature death of the main income earner. If your children are adults and out of school, then there is nothing left behind other than a nominal maximum “death benefit” of up to $2,500 which we all know won’t even be enough to cover the funeral costs, probate fees, and legal costs.
With this idea, the cost is still the same for the employer and employee just like the CPP. The key difference is that in the event of death, the remaining amount can be transferred to whomever the employee designated as the beneficiary, rather than losing it all to the government. This plan would preserve the legacy of the individual that passed.
Do you like this idea? Or not?
So tell me what you think. Is it time we thought outside the pine box casket?
Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html
Downtown Wednesday Market returns tomorrow!
It’s Back!! Downtown Red Deer Market offering local goods and produce on Little Gaetz Avenue
Throughout the summer season, the farmers’ market comes to Little Gaetz Avenue in Downtown Red Deer every Wednesday from 3:30 – 6:30 p.m.
You can purchase farm fresh food from nearby farms including meat, fresh vegetables and fruit, baked goods and handmade items at this accredited Alberta Farmers’ Market.
Check out the Downtown Red Deer Market Facebook page for regular updates throughout the market season.
The 2020 Downtown Red Deer Market is launching on June 3rd. During Market, precautions will be taken to ensure physical distancing and hand sanitization practices are adhered to.
The health and well-being of our staff, vendors, and the public is our number one importance and we encourage you to stay informed by regularly reviewing information on the Canadian government’s COVID-19 webpage.
Please note: Dogs are not permitted on-site during the market, as per Alberta Health Services regulations. We apologize for any inconvenience this may cause.
If you’d like to join our market as a vendor, please send us a completed application form. We welcome both seasonal and weekly vendors, and approve applications as they arrive throughout the season.
Please allow 2-3 business days to process applications. Click here to access the 2020 vendor application form.
Some of our regular vendors include:
- Cafe Millennium
- Innisfail Growers
- Klein Farm
- Markerville Berry & Vegetable Farm
- MSW Farms
- Souto Farms
- Troubled Monk
- West Country Kettle Corn
- Taste of Ukraine
- Nixon Honey
Parking at the Market
See our parking page for Downtown parking options near the market site.
German Fitness Trainer Finds Himself Stuck in Calgary – And Making the Best of It!
Cultures collide as COVID-19’s descent on the world leaves personal trainer global adventurer Darian Bessell stuck in Calgary.
Originally from Germany, Darian has been travelling the world for the last year and a half, landing in Canada in February with plans to stay and work for a year. After getting all his permits in place and obtaining a work visa, he was hired by one of the major gyms in Calgary as a personal trainer. Unfortunately, he was immediately laid off after COVID-19 hit the city.
Seeing the situation as an opportunity to strike out on his own, Darian began offering his services as a personal trainer online, offering free consultations by Zoom or in person. His first client, Matt Keay, connected with Darian during his search for a way to improve health and mobility as well as mental wellbeing in his demanding role as a CEO.
“I look over at my two-year-old daughter and she’ll be holding a squat position playing with toys for nearly an hour, totally natural for her,” says Keay, “why can’t I do that?” Keay suffers from sore hips and wrists due to years of abuse from skateboarding and poor diet. This proves difficult, as his role as a leader demands high performance and consistent energy.
“I’ve got training every day with Darian … well, it’s more like all day long,” says Matt, “I’ve heard people say how fitness is a lifestyle, well I really understand that now. I am standing more at my desk, doing more stretches, busting into a squat in the boardroom and the pain I’ve dealt with for years is melting away.”
Darian Bessell, newly appointed Business on Camera Director of Physical and Mental Health will bring health and wellness to high-performance entrepreneurs in Calgary. “The knowing-doing gap is a worldwide common issue,” offers Bessell, “people know that enjoying nuts as a snack is healthier than a chocolate bar, and they know the way they feel physically could be better. Often some simple support tools to improve mobility can have a huge impact on overall fitness and hold the key to a new healthy lifestyle.”
The human body sends signals that it is in poor condition by aching and demonstrating discomfort. The mind also sends signals, for example, feeling depressed or tired all the time. Most people know that they have to change something, but it is all too easy to get caught up in routines and maintain bad habits.
“Most people have the desire to do more for their mental and physical health, so why not just do it then?”
Health and fitness is one of the most flooded industries on the market with new gadgets, diets and methods constantly emerging, leaving no shortage of options when it comes to personal health.
“Choosing to work with Darian was based on the education he had regarding the symbioses between mental health and physical performance, nutrition and mobility. He often referred to a program created by Dr. Kelly Starrett called “Becoming a Supple Leopard,” continues Keay, “a ton of professional athletes and stunt actors are Supple Leopards; I would describe it as intentional and intuitive. For me at this time, the goal is to feel better everywhere, increase mobility, energy, and mood in under thirty minutes a day.”
Darian’s goal is to help individuals overcome the disconnect between desire and action by cultivating discipline and a strong commitment to health and happiness in his clients. “People have to take a huge step to get over the gap between knowing what is good for them and really having the discipline to do it,” says Bessell, “Human beings get used to things so fast and fall into a cycle of ‘I need to do something about that’, then continue to ignore it, and fall into the deep hole between knowing and doing.”
Darian gives people that much-needed kick in the butt. By helping clients reposition their approach to fitness and replace negative habits with positive changes, his program addresses physical and mental wellbeing, leaving clients feeling better than ever. “Other benefits include better sleep, more focus and better work-life balance,” says Darian, “it is all about implementing a holistic approach to health to get your body in an efficient, healthy position, and maintain it with intentional practice.”
Keay is thrilled with his results and excited to see where the program takes him. “I am constantly paying attention to my body now,” he says, “the way I sit, the way I walk, engaging my core, doing a squat instead of bending over to pick something up…it’s really had a tremendous impact on my ability to move properly, and we’re just getting started.”
Darian can be reached by phone at 403-478-3836 or [email protected]
For more stories, visit Todayville Calgary.
NEW MUSIC RELEASE DAY!
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