September 19, 2018

[Ep. 168] Canada Pension Plan: Will It Be Around When You Retire? with Mei Maven

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I’m Jessica and I’m a money expert, speaker, Accredited Financial Counsellor Canada®, host of the More Money Podcast, and am currently writing my first book with HarperCollins Canada (2025).
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We all pay into the Canada Pension Plan (CPP), but most of us have no idea what it is, who manages it, or if it will even exist by the time we retire in the next 40+ years.

That’s why for this episode I talk with Mei Maven, the Director of Global Communications for the Canada Pension Plan Investment Board (CPPIB). I ask her all the important questions we all should know about CPP so we can understand how this pension plan can (and should) work into our individual retirement savings plans.

So…Will CPP Still Exist in the Future?

Since I was a young adult, I remember hearing conversations from my parents about how CPP wouldn’t be around by the time I would retire. I think that’s a big reason why I was so set on saving and investing for retirement as soon as I got a full-time job.

This is actually a fairly common worry amongst Canadians, so I wanted to make sure I got to the bottom of it. Well, the short answer is YES, CPP will be around by the time you retire. As Mei mentioned in the interview, it is almost guaranteed to be around for the next 80 years. It will probably (and hopefully) be around for longer than that, but I don’t think CPPIB can make assumptions further into the future than that.

Does This Mean I Don’t Need to Save for Retirement?

As Mei also mentioned in our interview, CPP is meant to supplement your retirement savings, not replace them. You still need to save for your own retirement, but it’s important to consider CPP when doing your calculations for how much you actually need to save up to retire comfortably.

One great tool to play around with is the government’s free Canadian Retirement Income Calculator.

What Is CPP Invested In?

This was a fun question to ask, and it was quite nice to get a straight-up answer. All the funds that CPP is invested in are made public on their website under the Our Investments tab.

What Has CPP’s Portfolio Performance Been Like?

To see what returns the CPP’s investment portfolio has been earning, check out the Our Performance tab on the CPPIB website. As shown clearly on their website, their 5-year annualized return has been 12.3% and their 10-year annualized return has been 8%.

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