Seniors should get per month

I have seen this post making the rounds on FaceBook that says, we should be paying seniors $2,000 a month.Great idea, but a bit misleading. Why did they choose that number? What is magical about $2,000. Right if you started collecting Canada Pension you could receive starting the pension at age 65 is $1,253.59.  This is not the reality but it is a number the government likes to toss around. 

To be eligible for that amount of payment, a worker must contribute to the CPP for at least 39 of the 47 years from ages 18 to 65. You must also contribute the maximum amount to the CPP for at least 39 years based on the yearly annual pensionable earnings (YMPE) set by the Canada Revenue Agency (CRA). The YMPE for 2021 is $61,600, Since very few people start working and earn $61,600 a year, the amount of CPP earned by most workers is less than the full amount. The average monthly amount paid for a new retirement pension (at age 65) in July 2022 is $727.61. 

In addition to Canada, Pension seniors collect Old Age security in Canada for those between 65 and 74 this amount is $685.50 for those of us over 75 the amount is $754.05. To receive the maximum a senior must earn less than  $$129,757.

So the average senior who has worked in Canada now receives an income from Canada Pension and Old Age Security of $1,413.11. If this is the senior's only income they may be eligible to receive a Guaranteed Income Supplement (GIS). There is a formula for calculating the GIS and GIS payments are calculated using your income and marital status. From July to September 2022 the maximum monthly payment is $995.99 if you're single, widowed, or divorced. The maximum monthly amount is different if you have a spouse or common-law partner.

So if a senior is eligible they could receive more money so they could be earning $2,409.10 a month. Not a lot of money but better than the $2,000 that the FaceBook authors are asking people to fight for from the government.

Living on a retirement income is hard and even at $2,409.10 a month or $28,909.20 a year. This is still very close to the poverty level in Canada which is $26,620 a year for a single person. There are many seniors who are below the levels stated here because these are the maximum amounts and very few people get the maximum amount. One of the questions people ask is the following:

Does Canada have high elderly poverty rates?

The poverty rate among Canadian seniors is one of the lowest in the world. Five percent live below Statistics Canada's low-income cut-offs,1 and 7.2 percent below the OECD's poverty measure.

The issue of having an adequate income in retirement is complicated and there is no easy answer, but we are fortunate in Canada but that does not we should be complacent as the rate of inflation is rapidly destroying many seniors' savings and retirement plans, and most importantly their access to good affordable housing.

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