Retirement for New Canadians (Part 1)

Moving to a new land is a huge change. There are cultural issues. There may be religious issues. You’ll no doubt miss your “home” a lot. But moving to a new land brings big opportunities for those who are prepared to take advantage of them. And many a New Canadian has done very well by working hard and appreciating the second chance they have to build the life they want.

The biggest mistake you can make financially as a New Canadian is to jump into something you don’t understand simply because it’s seems to be the way everyone else is going. While seeing the opportunities and making them work for you makes good sense, adopting bad habits does not.

You also can’t assume that the universal benefits you hear about will apply to you. Everything has a rule, and if you don’t fit the rule, you don’t get to play in the game. Our government pensions are a good example of this. You can’t assume you’re going to get the maximum amount talked about in examples in the media and in financial brochures. There are very specific rules for qualifying for the maximum and anyone who has lived in Canada less than 40 years likely won’t get the maximum available from Old Age Security (OAS). (See my next blog for more on this.) And since the Canada Pension Plan is a contributory system – what you take out is based on what you put into the plan — you might not get the maximum from that plan either.

If you come from a tradition where children take care of their elders, and your family maintains that tradition, then you’re very lucky. Know, however, that life for your children in Canada will be very different than you might now imagine. They will have their own struggle to make a home for their family. If they marry out of your culture, that may create tension if you try to move in later. And if they must relocate for work – and relocation is a way of life in North America – will you want to move away from family and friends, from everything with which you have become comfortable, to live with your immediate family? If not, you better have enough money to take care of yourself.

Part 2 on Thursday.

11 Responses to “Retirement for New Canadians (Part 1)”

  1. As a Canadian living abroad, I can very well imagine how hard it must be to try and plan your retirement in a new country… for example, although I am fluent in the language of the country where I am living for the next few years, I can’t imagine trying to read technical documents like insurance policies, RRSP regulations, etc. in what is now my fourth language…

    Do resources exist in Canada for new Canadians that can explain those fairly complicated systems in plain English (or French) in an reasonably unbiased way? Or is it something that community associations for the various ethnic groups take upon themselves to provide to the community?

  2. Luckily…if you are a low income senior, who arrives and finds that OAS will not assist you, you may qualify for social assistance (depending on if you were sponsored or not) for rates slightly less than the max OAS amount. SO, even though you need to qualify for our ‘retirement’ government plans…you can still just show up, and apply for assistance…and get it. It is, however, subject to asset and income qualifications. Most often, the seniors I deal with day to day, know about how to apply for this assistance BEFORE they reach Canada.

  3. Interesting. I was born in Canada, have lived here my entire life, and worked and paid taxes since the age of sixteen. My OAS doesn’t approach the maximum as it is clawed back. Yet my tax money provides Social Assistance for other seniors who have figured out the system before they even arrive in Canada. There’s something very wrong with this.

  4. @Linda. It seems that the poor can be rich, and the rich can be poor. Sometimes, in all fairness, the poor can be poor and the rich can be rich…but, back to my first comment…

    I was feeling poor in spirit yesterday…and poor in general.

    While I was on the road, I dropped into the local liquor store for some pity-party wine. At the till, I considered giving the twenty dollar bill I had on me (a rare thing) to pay for my purchase. I chose not to give it up quite so quickly. Funds were going to be non-existent until the next pay-period. Credit would bridge the gap today (I knew my cashflow).

    I exited the store, heading toward my 1989 Toyota Corolla and saw a woman on a wheelchair, setting up a “help me” sign. I thought her deliberate act of revealing her one stumped leg was a bit manipulative and provocative: I certainly felt manipulated and provoked! But I forced myself to do a rethink. I do this quite often, deliberately, now.

    I know how much our family lives on. I have a sense of what others “make do” with. Stewardship matters to me. To be crass: I don’t want to throw my pearls to the swine.

    As I passed the bill to her, saying what I felt I needed to say, her hands clung to mine with an emotion I’ve experienced before. There didn’t need to be words, actually.

    As I drove home, I pulled a “Gail” and said to myself, “Give your head a shake, girl!” I know who I am. I know what I’ve got. And it’s enough. It’s a lot. That lady gave me something back: more than she knew. I was back in my “right mind.”

    None-the-less, the wine every bit as lovely as I expected it to be. 🙂

    p.s. A generous person, though poor, is rich.

  5. I’m with Linda on this one. If someone is coming to this country with the intent of manipulating the system, then something should be done to prevent this from happening. I am an immigrant, btw, but I pay taxes like everyone else, and when I see people (and I do personally know some such people) who come here not only expecting all these government benefits but coming here just to take advantage of them, I get annoyed. At the same time, if you get someone who had no intention of manipulating the system, but are down on their luck and through no fault of their own they need help, I’m happy they get assistance. It all depends on the intention of the person for me.

  6. The lovely thing with CPP is that even if you work your whole life you will likely not get the max. Becoming disabled before you retire can also affect your rate even if you don’t qualify for CPP disability. Not many disabled people actually qualify for CPP disability unless they have a generous doctor. The rules are that strict.
    I just received my calculation sheet from CPP and was shocked to see how much I would not be getting because I am not able to work for a number of years before I am eligible to claim. I will not be eligible for assistance either. Unlike many new immigrants who are who did not spend their lives here paying taxes and other benefits, I am not able to work the system. So my money went into the pool but I am not able to get what I should be entitled to back. I bought into the dream of help in retirement from the feds. Thankfully common sense also made me put money away for retirement just in case. Just wish I would have put more away when I had the chance. Until the injury I was on track for an ok retirement. No one mentioned what not working for the years leading up to 65 would do.

  7. Kim,
    What social assistance pays that much like OAS max??

  8. I just googled OAS and the max is about $550. I thought it would be higher, like $1000.

  9. Kim says, “may qualify for social assistance (depending on if you were sponsored or not)”…”subject to asset and income qualifications.”

    The slant, accenting people as “manipulative” threaded it’s way through following posts. I believe there is good reason for this cynicism… Systems are imperfect…and so are people.

    I guess, for me, one of the best things about Canada is that our own good fortune makes us long for everyone to be okay. Perhaps my own idealism gives me away.

    I find my heart distracted by people looking for hope. My own experiences of “looking for hope”…make me want to be a baton-passer in that relay-run.

    In the end, I don’t believe there’s a whole lot of disagreement between us “posters.” We are each experiencing a different “burden” THIS day…and our eyes are simply choosing to focus on different angles, according to the pressures of our own need.

    Nobody really wants a truly manipulative person to succeed. Unfortunately, if our undies were revealed, a whole lot of us are not as un-manipulative as we would like to imagine.

    er…um…Justice for…all?

  10. Not sure why anyone thinks a generous doctor can get someone cpp disability. The application is filled out by your doctor and cpp looks around test results, etc before they approve it. I don’t think gravy train and disability payments can really ever be put in the same sentence!

  11. The CPP disability comment I made was in part based on issues that were revealed a few years ago. There were a group of doctors who were making money on the side helping people, many of who would never qualify, to get CPP disability. One article done by the CBC in 2011 focused on a company that was known to be in the business of getting their clients disability tax breaks for a fee. Fraud does happen, and many an honest person are told they don’t qualify. I may sound cynical but so are many journalists who uncover the ugly truth about those who try to work a system.

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