Improvements to the Canada Pension Plan (CPP) will provide Canadian millennials with more funds they can depend on in retirement - a huge relief. On July 9, 2019, Minister of Families, Children and Social Development Jean-Yves Duclos visited firefighters at Station 95 in Markham to speak about steps the Government is taking to help Canadians retire more easily.
According to a Government of Canada news release, the enhanced CPP aims to assist middle-class Canadians and those aspiring towards it. A major portion of that group would include millennials in Canada. The updated CPP will provide today’s workers with more money when they retire. Increases of up to a whopping 50 percent in retirement benefits are expected for millennial workers. This should majorly improve retirement outcomes for future retirees and lower the risk of households not saving enough for retirement.
Currently, a mere 29 percent of working-age Canadians think they will be financially comfortable in retirement, which is just a little less than the global average of 34 percent. On the flipside, Finance Canada estimates that 1.1 million families - 24 percent - nearing retirement may not have enough funds to maintain their standards of living after they retire.
People with severe and prolonged disabilities and the families of deceased low-income workers will also be supported by the newly strengthened CPP. Additionally, the benefits of parents of young children will be protected under the plan.
In Budget 2016, the Government restored the age of eligibility for the Old Age Security (OAS) program benefits from 67 back to 65 years old, which means that future retirees won’t have to wait the extra two years. For lots of Canadians, like Markham’s firefighters, working to 67 is not an option. Two years might not seem like much, but for millennials living paycheck to paycheck, it would make a huge difference when planning for retirement.
“Middle-class Canadians work hard and deserve to know that they can retire in dignity,” said Duclos in his speech to Station 95’s firefighters.
“The newly enhanced Canada Pension Plan will provide more money to Canadians while the changes to Old Age Security will mean they get this support when they actually start their retirement.”
Let’s hope these improvements are here to stay, especially when there might be a change in government with the upcoming elections in October.