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Last post I promised you a small factoid about the Guaranteed Income Supplement most people don’t consider.

Believe it or not, I don’t really like crunching these numbers for you, I just think it’s imperative you understand what you have to look forward to by way of government pensions.

I’ll use the numbers from my last post, based on the CPP Statement of Contributions I recently received.

For the sake of argument, at age 65 I will assume I qualify for the maximum OAS payment of $551.54/month. I learned a few days ago that if I delay collecting my CPP until age 65 I will receive $807.54/month, a whopping total of $1359.32/month. (How much do your basic needs currently cost you?)

When evaluating income to determine qualification for the GIS, the government does not factor in your OAS. So, my annual income without the OAS is $9,693.36. This means I qualify for $293.19/month supplement. My monthly income is now $1652.51/month. (Don’t ever wonder why I recommend you be debt-free by the time you retire!)

BUT! here’s the kicker! here’s the part most people forget to consider: annual income is determined by the numbers on your previous year’s Income Tax. If you were making a humble salary and earned, say… $35,000 last year, you do not qualify for the GIS. If you work even a few months into your year of retirement, there’s a good chance you will not qualify for the GIS for another year. You need to earn less than $16,728 in a tax-reporting year to qualify for the GIS the following year.

This means I need to figure out a way to live on $1359.32/month for at least a year, possibly two.

Not pretty, is it?

Several people I know are turning 65 this year. One is contemplating selling her vehicle. Another is worried she will need to sell her small home. Another is just plain worried.

If I haven’t depressed the hell out of you yet, and you want to go crunch your own numbers, here’s the link to the government website:

If you don’t have serious RRSPs or a private pension plan to bulk up those numbers, you have to figure out an alternative.

It’s your call. You know where to find me. (bottom of this page, click Contact)