The Canada Pension Plan (CPP) is a government program that provides retirement, disability, and survivor benefits to contributors and their families. It is funded by mandatory contributions from both employees and employers.
How It Works
Employees and employers each contribute a percentage of employment income to the CPP, up to an annual maximum. Self-employed individuals pay both portions. Contributions earn credits that determine the benefits you receive in retirement or if you become disabled.
Benefits Provided
- Retirement pension: Monthly payments starting as early as age 60, based on your contributions.
- Disability benefits: Support if you are unable to work due to a severe disability.
- Survivor benefits: Payments to your spouse or children if you pass away.
Final Thoughts
The CPP is a cornerstone of retirement planning in Canada. Combined with personal savings and other programs, it helps provide income security throughout retirement.