Good morning! Retirement age isn't really one number: it's a math problem with a lot of moving parts, and today's lineup pokes at three of them. What happens if you retire before CPP and OAS are ready to pay you full freight? What should come first when you're carrying debt and eyeing an exit date? And now that benefits have gone up for Q3, does that actually close the gap between what government income covers and what retirement costs?
On The Money Today:
The real reason 62 might be too early to retire
Debt or RRSP first: the order most Canadians get backwards
Benefits just went up, but the gap you still need to fill hasn't closed
Let’s dive in.
RETIREMENT
CPP shrinks for every month you claim before 65, and OAS won't start paying out until you hit that age at all, so retiring at 62 means covering a real income gap on your own. That math is laid out below, along with how to tell if $500K gets you through it.
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RETIREMENT
A guaranteed 20% return sounds great, until you realize that's just the interest rate on the credit card debt you're carrying into retirement. Before you put another dollar into your RRSP, it's worth asking whether debt payoff should come first. The math favours paying it down first, and that decision carries real weight for your actual retirement date.
FEATURE
Higher benefit payments sound like good news, and they are — but they still don't close the space between what government income covers and what typical retirement spending actually costs. Here's what the new numbers mean for your plan, and where the shortfall still shows up.
MONEY IQ
What year was the RRSP introduced in Canada as a way to help people save for retirement?
ALSO MAKING THE ROUNDS TODAY
RETIREMENT: My dad convinced grandma to change her will and cut me out of a $400K inheritance — do I have options
MONEY IQ: HOW'D YOU DO?
Answer: B) 1957 — RRSPs have been part of the retirement toolkit for almost 70 years, long before anyone was debating whether to max one out while still carrying debt.
That's a wrap for today! Before you go, we'd love to know what you thought of today's newsletter. Hit REPLY if you have more to share — we read every reply.
