Someone explain pensions to me?

[mizunderstood]

I will admit I know little to nothing about old age pensions so any explainations would be great.
My question. If a woman was a stay at home mother all her life, never worked, and now is 65 years old. How come she gets to collect a pension? She never paid into it, therefore why does she get one? I understand the husband getting one if he worked all his life but why the wife who never paid into it? I even understand the wife getting the husbands pension after he passes away, but why would she be entitled to 2 pensions and never worked a day in her life?
The next thing I am wondering is people that have been on assistnace all their lives, how come they qualify for a pension? they too never paid into it so how come they can collect one?
The last question I have is what happens to my generation (20-30 year olds) when we retire? Will we have pensions at age 65? I have heard some talk about there not being a pension plan left when we get to retirement age? Any explaination would be great.
I have my own RRSP through my bank, but I want to know if this will be all I have to live off of when I am in my "golden years"

AND PLEASE I am not bashing the stay at home moms that are now collecting a pension or the people on assitance, I am just curious how this all works.

[dan j]

There are a lot of questions in there!

1. Because we take care of our old in our society.

2. I don't know if that is true (about taking two pensions).

3. Because we take care of our old in our society.

4. Same question, same answer.

5. We'll get screwed. Actually, our government is doing a good job not getting us into more debt (as a country) and maybe things will look up by the time we're old.

6. Kinda the same question.

7. You've just heard talk. Technically, you didn't ask a question.

8. Kind of a question but you didn't pose it as one. Get a banker, trust your banker, and invest as much as you can as early as you can.

[inuit]

Because everyone in Canada gets a Canada pension at the age of 65.You can even collect it at 60 if you cannot work any longer it's just less money. About 1/2 I think. If you have worked you also get an old age security cheque. That cheque amount will depend on how much money you made during your working years. If you work for a company that pays into a retirement fund, you may draw on that but it will be taxed. Same as a rrsp. As for ppl on assistance, they will draw only one pension not both the Canada and the old age one.
Come on Miz, you really don't think our parents generation of stay at home mothers are not entitled to a pension, do you? Those women worked a darn site harder than our generation ever thought of. A monthly stipend is small payment for what they gave in their lifetime.

I could have the two cheques mixed up but I believe Canada pension is larger than old age security or could be the other way around.

[inuit]

I forgot to add too that if there are two people collecting pension then the husband will get a full cheque and his wife will collect only about less than half of hers till he dies then she will collect her full Canada pension and if he has any work pension, she will collect that.

Whan I began nursing in the eighties one of my co-workers was going to divorce her husband so she could collect her full pension. She was 63 and he was 71 at the time. They continued to live together just had different addresses. He upstairs, her down. They had been married 43 years.

[oasis]

I forgot to add too that if there are two people collecting pension then the husband will get a full cheque and his wife will collect only about less than half of hers till he dies then she will collect her full Canada pension and if he has any work pension, she will collect that.

Whan I began nursing in the eighties one of my co-workers was going to divorce her husband so she could collect her full pension. She was 63 and he was 71 at the time. They continued to live together just had different addresses. He upstairs, her down. They had been married 43 years.

With Canada Pension, If you retire (depending on age) You get an amount based on what you made over the years. If both husband and wife retire, they both get their full pension. The wife does not get just half. If one spouse or another dies, the remaining spouse gets a portion of the others pension. Canada pension is available as early as 55 at a reduced amount. It is only available to some one who has worked

Old age pension is available to any Canadian citizen who has been in Canda at least 10 years, at the age of 65 Regardless of whether you have worked or not. I believe it is a fixed amount I know my parents and my wifes parents all get the same amounts. This is under the guaranteed income act passed by the house of commons many many moons ago. This is to guarantee that you do not starve to death.

I think with the 2 pensions you will earn a little less than, or a little more than $1000 Once you start to collect both pension, one is clawed back based on what you make on the other.


mizunderstood.

If you want to live a little better than that then you'd best have a banker help you set up RRSP's to supplement your retirement income.

This is from the Canada Pension web site. Payment info. You'll see it's clear as mud!

<table summary="" border="1" cellpadding="5" cellspacing="0" width="100%"><caption class="captionc">Old Age Security Benefit Payment Rates
July - September 2008</caption> <thead> <tr> <th class="thbgpc thwidth20" id="benefit" scope="col">Type of
Benefit</th> <th class="thbgpc thwidth25" id="recipients" scope="col">Recipient</th> <th class="thbgpc thwidth15" id="ave" scope="col">Average monthly benefit
(March 2007)</th> <th class="thbgpc thwidth20" id="maxmon" scope="col">Maximum Monthly
Benefit</th> <th class="thbgpc thwidth20" id="maxann" scope="col">Maximum
Annual
Income</th> </tr> </thead> <tbody> <tr> <td class="tdleft" scope="row" headers="benefit">Old Age
Security Pension</td> <td class="tdcenter" headers="recipients">All recipients</td> <td class="tdcenter" headers="ave">$476.05</td> <td class="tdcenter" headers="maxmon">$505.83</td> <td class="tdcenter" headers="maxann">See note (http://www.hrsdc.gc.ca/en/isp/oas/oasrates.shtml#note)</td> </tr> <tr> <td class="tdleft" scope="row" headers="benefit">Guaranteed
Income
Supplement</td> <td class="tdcenter" headers="recipients">Single person</td> <td class="tdcenter" headers="ave">$435.02</td> <td class="tdcenter" headers="maxmon">$638.46</td> <td class="tdcenter" headers="maxann">$15,336</td> </tr> <tr> <td rowspan="3"> </td> <td class="tdleft" scope="row" headers="recipients">Spouse of pensioner</td> <td class="tdcenter" headers="ave">$269.71</td> <td class="tdcenter" headers="maxmon">$421.62</td> <td class="tdcenter" headers="maxann">$20,256</td> </tr> <tr> <td class="tdleft" headers="recipients">Spouse of non-pensioner</td> <td class="tdcenter" headers="ave">$426.68</td> <td class="tdcenter" headers="maxmon">$638.46</td> <td class="tdcenter" headers="maxann">$36,768</td> </tr> <tr> <td class="tdleft" scope="row" headers="recipients">Spouse of Allowance recipient</td> <td class="tdcenter" headers="ave">$352.84</td> <td class="tdcenter" headers="maxmon">$421.62</td> <td class="tdcenter" headers="maxann">$36,768</td> </tr> <tr> <td class="tdleft" scope="row" headers="benefit">Allowance</td> <td class="tdcenter" headers="recipients">All recipients</td> <td class="tdcenter" headers="ave">$367.44</td> <td class="tdcenter" headers="maxmon">$927.45</td> <td class="tdcenter" headers="maxann">$28,368</td> </tr> <tr> <td class="tdleft" scope="row" headers="benefit">Allowance for the survivor</td> <td class="tdcenter" headers="recipients">All recipients</td> <td class="tdcenter" headers="ave">$577.24</td> <td class="tdcenter" headers="maxmon">$1,028.06</td> <td class="tdcenter" headers="maxann">$20,664</td></tr></tbody></table>

[inuit]

My mom is 82 and she worked at really menial jobs for 25 years. She gets 2 cheques. One is 1072.00 and the other is 276.00 per month. Annual amt is somewhere in 17,000.00. One is canada pension and one is old age security.

[mizunderstood]

Come on Miz, you really don't think our parents generation of stay at home mothers are not entitled to a pension, do you? Those women worked a darn site harder than our generation ever thought of. A monthly stipend is small payment for what they gave in their lifetime.

Please inuit, that is not what meant, and I made it clear in my original post that I was not bashing stay at home moms or IA people either... I am generally curious as to why they get what they get, and whether we need to worry about having an old age pension when we get to retirement age. I do have a RRSP set up at my bank, but if that is ALL that I am going to have to live off of when I retire it is going to be sad retirement.

[inuit]

Yeah, sorry miz. I was just having a bad day and I didn't mean to dump on you.

It sounded like you were saying that stay at home moms in that generation did not deserve a pension. Sorry if I read it wrong.

You know my mom has been collecting pension since she was 65 and last week was the first time I ever saw her cheque.

I wonder how old people make ends meet when they have to pay rent, medication, heat, lights, food and paying someone for everything they need doing.

When we are young those things never cross our minds.

[mizunderstood]

Yeah, sorry miz. I was just having a bad day and I didn't mean to dump on you.

It sounded like you were saying that stay at home moms in that generation did not deserve a pension. Sorry if I read it wrong.

You know my mom has been collecting pension since she was 65 and last week was the first time I ever saw her cheque.

I wonder how old people make ends meet when they have to pay rent, medication, heat, lights, food and paying someone for everything they need doing.

When we are young those things never cross our minds.

It's ok inuit, I figured as much... lol...
And that is the reason so many people in our generation will end up with nothing when they get to retirement age. They just don't think about it now, when the time is right to be investing in your future. As I said I know very little about pensions and such... Do you know if I have my own RRSP that I can draw from when I get older, will that affect my old age pension? (if there is still one in 30 years)
This is a great site to show what you need to be putting away at any age to retire with 1million dollars. I am sure that you don't need 1million in your retirement but it still gives a good idea what we should be doing now to plan for our futures...
http://money.aol.com/retire-in-style/retire-a-millionaire

[inuit]

I've got it figured out. When I get older I am going to either find a rich man or one with a good pension and marry the fool before he realizes what I'm up to. Laugh out loud. That or win the lottery. Haha

Otherwise I don't know. All my working life I lived paycheque to paycheque. There was never enough money to put any away. Guess I'll have to live off what they give me. It will be more than I'm living on now.lol

I don't know if you will lose what money from your pension that you get from rrsp or not. Doesn't seem fair if they do. This is money that you've put away yourself. You should be able to keep it. I'm sure someone will be able to tell you. I'm kind of couriious too.