A retirement foundation
When most of us think about retirement, spending more time with family, finding new hobbies and travelling the world are often top of mind. But while retirement can be a wonderful chapter, getting there isn't always easy.
A recent survey found 55 per cent of Canadians either believe they aren't financially on track to retire – or simply don't have a long-term savings strategy in place. More than one out of five of us also report high levels of stress when planning for the future. Fortunately, we are not as behind as we think.
Through the Canada Pension Plan, beneficiaries have a solid foundation for retirement income in their golden years. If you work in Canada, contributions to the CPP are automatically deducted from your paycheque during your working years, and any of those funds not needed to pay current beneficiaries are then invested by Canada Pension Plan Investment Board, a professional investment organization. You then get these funds back in the form of the CPP benefits in retirement.
To make sure that your pension money is there for you when you retire, CPPIB invests in a diverse set of worldwide holdings, which includes everything from public and private equities to real estate and infrastructure.
At the end of its most recent fiscal year, the fund totaled $316.7 billion and earned a gross investment return of 12.2 per cent.
Canada's chief actuary, who monitors the financial state of the fund, estimated in the last triennial report that the CPP is sustainable over a 75-year projection period. This means that the Fund will be able to pay out benefits for at least the next 75 years, at current contribution and benefit rates.
“The fund's performance has been strong over the past decade,” says Dan Madge, senior manager of public affairs or CPPIB. “Retirees should take comfort in the fact that their Canada Pension Plan is sustainable for many generations and will be there for them when they retire.”
Planning for retirement is stressful, but CPP'S contributors and beneficiaries can remain confident the fund will provide financial stability today and tomorrow, allowing them to focus more on their families, communities and futures.
Find more information at www.cppib.com.