turbanplanner
Senior Member
Remember a lot of the pensions are based on highest 5 years of earnings. If stay entry level my whole life and put in 10% of my income, but get a management position the last 5 years I'd never get a multi million dollar retirement unlike the public sector.^ I would be interested to see how RRSP is working for government in terms of taxation revenue on cashout.
With so many people contributing to public sector pensions earning in excess of 100K and assuming the full 35 years of pension credit x 2%, the earned pension ie public sector pension plus CPP approaches the point at which OAS is clawed back.
Less of a problem if you can pension split with a spouse, but if the spouse also has good pension or retirement income…… every dollar withdrawn from an RRSP/RRIF first is taxed at a high marginal rate and then triggers a dollar for dollar OaS clawback.
Hard to feel sorry for higher wage earners, I agree… but my point is that RRSP may be proving to have been a godsend to government taxwise and it would be hard to convince government to undo it.
- Paul




