Thank you for this video. You mentioned that Alberta teachers are pretty much stuck taking CPP at 65. So they can't choose when to start it? Here in Ontario, the teacher pension has a bridge benefit which ends at 65, but there is nothing preventing the pensioner from delaying CPP or starting it early. As a matter of fact, for many career teachers, full OAS at 65 is not much less than the bridge benefit, so they could still delay CPP and not see a large reduction in their total pension. Then, when the delayed CPP is started, there is a significant increase in total pension. So much so that some pensioners might start getting close to OAS clawback territory! Thanks again for all your videos and keep up the great work.
Fair point. I’ve never actually run the full scenario to know exactly which way would work the best, but it’s usually a much simpler decision when the bridge just ends. If I come across the actual numbers of someone typical, I’ll run them to see how it plays out.
Huge fan of the channel! I've referred to you quite a bit over the last 2-3 years. *Two suggestion to elevate your amazing content:* 1) you've got a nice, deep voice that deserves a better vocal mic than the one on your camera (even a cheaper $50-100 usb mic off Amazon would make a world of difference) 2) find somebody who knows how to EQ the audio so that it caters to your specific voice. I do this kind of editing for channels and they're always floored at the difference it makes. Would be honored to answer any questions you have!
Thanks for backing up my thinking. Got into teaching after my Army time, followed wife into the profession. My figuring is that each $1000 a month of pension is "worth" about $300000 savings/investments with the 4% rule. Following some of the retirement mantras out there ($1million, 12x salary, etc), that $2100 of your wifes pension would equate well toward that number especially with it being more secure then many pension plans.
Fantastic video Kent. I'm a retired AB teacher so let me share a few other thoughts. Although carrying debt into retirement isn't ideal, It's also somewhat irrelevant. It's possible for those with DB pensions to make more net income in retirement than working. Once CPP, EI, Union Dues and pension contributions stop you only have to pay taxes and they can be substantially lower. That is easily 30+% of your gross pay now eliminated. A 100K teacher now needs only about 70K to make the same money. Pension + CPP + OAS + personal savings can easily exceed that. If I can afford the debt while working, I can afford the debt in retirement IF I replace my net income. Many believe you cannot retire until debt is gone and that is not the case. They continue working to the potential detriment of their health, especially teachers. The 85 index is often misunderstood. Once you hit 85 you have no reductions in the pension you are entitled too. If you work until index 90 (age 60 + 30 years pensionable service), your pension still increases beyond what it would have been at 85. This is because the years of pensionable services still increases. I confirmed this with ATRF. Teachers in AB with sub years can purchase that time back and it is cost shared with AB Gov't at retirement. A simple RRSP transfer is a great way to do this. It increases pensionable service and gets you closer to the 85. AB teacher pensions are not tied to CPP in any way unless they chose that option. They can start CPP at age 60, I did. I used DRpensions to run some numbers and it made sense to start early. Two working teachers with close to max CPP number at 65 should take CPP early. Keep up the great videos.
Awesome, thanks for the insight. I definitely agree with the debt aspect as I know some teachers can make as much or more in retirement after taxes, especially since the contributions are gone, but I think it’s a good rule for most to attempt to follow. Thanks for the extra pension info.
My wife is a teacher in Nova Scotia. Her retired colleagues have told her to be sure to put plenty of extra savings aside. The NS teachers pension is chronically underfunded, and recent retirees haven't seen any indexing for inflation in about 15 years.
It’s a good point. Not all pension plans are created equal. However, it likely wouldn’t take much to save the additional income needed once you add in CPP and OAS
good info , Teachers retirement plans arent the greatest in some places so they wont get cost of living for decades. They need better negotiators as soon as the gov;t says Oh think of the kids, They cave and take low increases which of course sets the standard for other unions, Last big union meeting my brother was at, they laid out that the teachers will never reach out to brain storm with other unions,so get taken to the cleaners and only exemption of late was out in Nova Scotia when the teachers union had to join the group of unions to ease the legal fees. In the end, during their court challenge, the teachers got 1.5% yr raise when the police service in the capital got 2.5% and they nearly lost their case even.
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Thank you so much for doing this video that's catered to teachers. Much appreciated.
Thank you for this video. You mentioned that Alberta teachers are pretty much stuck taking CPP at 65. So they can't choose when to start it? Here in Ontario, the teacher pension has a bridge benefit which ends at 65, but there is nothing preventing the pensioner from delaying CPP or starting it early. As a matter of fact, for many career teachers, full OAS at 65 is not much less than the bridge benefit, so they could still delay CPP and not see a large reduction in their total pension. Then, when the delayed CPP is started, there is a significant increase in total pension. So much so that some pensioners might start getting close to OAS clawback territory! Thanks again for all your videos and keep up the great work.
Fair point. I’ve never actually run the full scenario to know exactly which way would work the best, but it’s usually a much simpler decision when the bridge just ends.
If I come across the actual numbers of someone typical, I’ll run them to see how it plays out.
FYI - AB teachers can start CPP anytime between 60-70. There is a bridge option but not a requirement.
Your education comments are on point.
Huge fan of the channel! I've referred to you quite a bit over the last 2-3 years.
*Two suggestion to elevate your amazing content:*
1) you've got a nice, deep voice that deserves a better vocal mic than the one on your camera (even a cheaper $50-100 usb mic off Amazon would make a world of difference)
2) find somebody who knows how to EQ the audio so that it caters to your specific voice.
I do this kind of editing for channels and they're always floored at the difference it makes. Would be honored to answer any questions you have!
Thanks for backing up my thinking. Got into teaching after my Army time, followed wife into the profession. My figuring is that each $1000 a month of pension is "worth" about $300000 savings/investments with the 4% rule. Following some of the retirement mantras out there ($1million, 12x salary, etc), that $2100 of your wifes pension would equate well toward that number especially with it being more secure then many pension plans.
Fantastic video Kent. I'm a retired AB teacher so let me share a few other thoughts.
Although carrying debt into retirement isn't ideal, It's also somewhat irrelevant. It's possible for those with DB pensions to make more net income in retirement than working. Once CPP, EI, Union Dues and pension contributions stop you only have to pay taxes and they can be substantially lower. That is easily 30+% of your gross pay now eliminated. A 100K teacher now needs only about 70K to make the same money. Pension + CPP + OAS + personal savings can easily exceed that. If I can afford the debt while working, I can afford the debt in retirement IF I replace my net income. Many believe you cannot retire until debt is gone and that is not the case. They continue working to the potential detriment of their health, especially teachers.
The 85 index is often misunderstood. Once you hit 85 you have no reductions in the pension you are entitled too. If you work until index 90 (age 60 + 30 years pensionable service), your pension still increases beyond what it would have been at 85. This is because the years of pensionable services still increases. I confirmed this with ATRF.
Teachers in AB with sub years can purchase that time back and it is cost shared with AB Gov't at retirement. A simple RRSP transfer is a great way to do this. It increases pensionable service and gets you closer to the 85.
AB teacher pensions are not tied to CPP in any way unless they chose that option. They can start CPP at age 60, I did. I used DRpensions to run some numbers and it made sense to start early. Two working teachers with close to max CPP number at 65 should take CPP early.
Keep up the great videos.
Awesome, thanks for the insight.
I definitely agree with the debt aspect as I know some teachers can make as much or more in retirement after taxes, especially since the contributions are gone, but I think it’s a good rule for most to attempt to follow.
Thanks for the extra pension info.
How do you recommend to save on fee in investment?
My wife is a teacher in Nova Scotia. Her retired colleagues have told her to be sure to put plenty of extra savings aside. The NS teachers pension is chronically underfunded, and recent retirees haven't seen any indexing for inflation in about 15 years.
As a teacher in NS, I too am wondering if my savings rate needs to be higher.
It’s a good point. Not all pension plans are created equal. However, it likely wouldn’t take much to save the additional income needed once you add in CPP and OAS
good info , Teachers retirement plans arent the greatest in some places so they wont get cost of living for decades. They need better negotiators as soon as the gov;t says Oh think of the kids, They cave and take low increases which of course sets the standard for other unions, Last big union meeting my brother was at, they laid out that the teachers will never reach out to brain storm with other unions,so get taken to the cleaners and only exemption of late was out in Nova Scotia when the teachers union had to join the group of unions to ease the legal fees. In the end, during their court challenge, the teachers got 1.5% yr raise when the police service in the capital got 2.5% and they nearly lost their case even.
Pᵣₒmₒˢᵐ