Retiree's Dilemma: Collecting CPP Benefits Before 2023 Ends

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Finance News

Retiree,CPP Benefits,Stock Options

A retiree is considering collecting CPP benefits before 2023 ends to potentially avoid or reduce CPP contributions. The retiree had stock options and shares from their former company, which they were able to sell after the company went public. They are concerned about the impact on their CPP contributions and seek advice.

I retired in July 2022 and was fortunate enough to have a number of stock options and shares from the company I retired from, but they were not liquid at that time. I had up to one year to sell them. The company went public early in 2023, so I was able to sell all the shares and options in the first and second quarters. My understanding is that this will be deemed employment income for 2023, so I will have to pay both the employee and employer portion of CPP contributions.

I am wondering if it makes sense to start collecting CPP before 2023 ends and will that avoid or reduce having to make those CPP contributions? Service Canada shows that I will receive maximum CPP benefits. Since I will be 61 shortly, I know the payments will be reduced by about 25 per cent

 

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