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Canada's pension system details

Canada's pension is broadly divided into three parts of the old Age security. This is basically the same as the minimum living security in social insurance, as long as the age is enough (generally after the 65 years of retirement, or 60-64 of the amount of early application), long enough to live (40 or meet the standards of 10) can be obtained, is a government money, about 500 yuan per month. 2.CPP (Canadian pension Plan) Canada pension.

This one, like taxes, must be paid by anyone who works, basically you and your employer pay half according to your salary, and if you have a business, you pay it all according to the income. This is calculated and paid in a way called “Pay as I go", which means that all the people working in Canada now pay for those who are now retiring, and when their generation retires, the next generation will supply them, so that if population growth (increased employment) and living standards increase (income increases), Then it will make each generation of income more and more high. The money will be managed and invested by the government when it is collected and paid for current retirees with earnings, currently averaging more than $400 a month, depending on how much money you paid and the age of retirement at the time of your previous job (calculating the top 25% years of payment, that is, the occasional few years of low income will not affect) RRSP(Registered Retirement Saving Plan)

Retirement savings. As can be seen from the above, it is not enough to maintain a standard of living for a normal working person to have only 1000 yuan of income left after retirement (the Government of Canada also acknowledges that it can only maintain about 30%). Because of the rapid ageing process, Canada has lifted the 65-year-old retirement limit in the hope that older people will try to continue working, so if only these two, that retirement is obviously not too good idea, then why do people here have a high pension? The main big head comes from this RRSP, which is the money that people save when they work, This is called the “private saving plan" personal savings program, as compared to the “pay as you Go" system above. That is, people put money into a pension account, the money in this account can be used as a savings account, or no venture capital (GIC guaranteed Investment certificate is a regular deposit and rounding, the general interest will be higher than the bank and the risk is lower than the stock, Because he only invests in companies and banks that can have stable returns), bonds, public funds, housing mortgages, stocks and so on. So what good is it to save money like this? The answer is simple and can avoid tax. Canada's personal income tax is high, from 15% to 45%, and the use of the “progressive income tax" method of calculation, that is, to divide income into several levels, the proportion of taxes paid per previous step will increase. And putting money into a pension account can reasonably avoid tax and keep revenue at a relatively low level. But since pensions can be invested and can be taken out at any time, won't the government lose taxes? No, because when you withdraw money, the money counts as your personal income to pay taxes, not just this retirement savings, including when the two previous pension schemes were paid to pay taxes. But it is appropriate to keep a pension for factors such as interest, so the government has limits on the maximum amount you save to ensure that no one intentionally evades taxes. In addition, you can have a personal deposit, you can also work with the wife, husband, or the employer can organize employees together to decide the amount of deposit and investment projects (the employer must be considerate of the employee, if deliberately conceal investment information or do not notify the employee of the current savings scheme, etc., the employee can sue the employer). This RRSP can be saved until the age of 71, and then it can be turned into another plan to continue, so often inheriting a large legacy is probably this retirement savings.