As you and your spouse plan for retirement, part of your financial plan may involve partially or fully relying on the Canadian Pension Plan (CPP) or Old Age Security (OAS). Initially, this may seem like a beneficial way to retire, especially if you and your spouse receive maximum CPP and OAS benefits. This can equate to approximately $3,500 a month in income, which can help you and your partner live comfortably.
But what if the unexpected happens and your spouse dies, and you are left alone, or vice versa? The time is now to sit down with your BlueRock Wealth Management Financial advisor and review how this scenario and other unexpected situations can impact your monthly income in retirement.
While many couples do receive enough CPP and OAS benefits to live comfortably, if your spouse dies, your income will get cut drastically. However, your property taxes, bills, and other expenses will not decrease, creating a need to develop a contingency plan in retirement that covers this potential.
Additionally, most CPP pensioners do not receive the maximum benefit; the average recipient currently receives about $1,154 every month. While surviving partners are eligible for up to 60 percent of their deceased spouse’s CPP pay, this is often not enough to live on. Plus, survivor pensions are difficult to predict, since the amount received depends on how much each partner has contributed and their ages.
The main point we want to emphasize is that as a surviving spouse, your pension benefits could be far less than you predicted or planned on. Contact your BlueRock Wealth Management financial advisor today to sit down and review your financial plan in retirement for unexpected events, so you and your spouse are prepared for any possible outcome. We can also go over life insurance solutions that can protect your family from uncertain survivor pension caps and other financial unknowns.