Latest / Wealth On Main Street / 159. ​​A CPP Case Study: Will You Get Your Money Back? with Henry Wong

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159. ​​A CPP Case Study: Will You Get Your Money Back? with Henry Wong · Wealth On Main Street

• 0:00
  Speaker A: You are listening to the wealth without Bay street podcast, a canadian guide to building dependable wealth. Join your hosts, Richard Canfield and Jason Lowe, as they unlock the secrets to creating financial peace of mind in an uncertain world. Discover the strategies and mindsets to a financial future you can truly bank on. So you got those payroll taxes coming off your check. You file your taxes at the end of the year, maybe you're incorporated, maybe you're a sole proprietor, and you're wondering, where did all the money go? Well, we're going to talk about one of those line items that we all fund in Canada called the Canada Pension Plan. It is the unfunded liability that we've been looking at that supports additional income for retirees in the nation. And of course, it is a very interesting program. It's been around for a while. We've had another episode about it. But today we're going to talk about an actual example of someone, as a canadian living in Canada, contributing over their working lifetime into the CPP. We're going to run a bit of a projection on how much more they're going to contribute and what they would have to do. How long would they have to draw an income and live and receive that CPP benefit in order to get their money back. I'm joined today again with my good friend Henry Wong. We're going to talk about this fun little analysis here, and we're also going to just spitball on a few other things that we've noticed and some fun graphs that Henry pulled before we went live here and the time of this recording. Just so everyone knows, because you might be getting this a little bit later, it's February 6 today, so in 2023, and we're just having a lot of fun talking about how much money I personally am going to see disappear to the canadian government in the CPP pension fund that I may or may not get back.
• 1:40
  Speaker B: Thanks for having me, Richard. It's always a pleasure to be here. And just to kind of tie into what was talked about earlier, is many Canadians actually may have noticed this if they looked at their paycheck. In 2023, there was an increase in the amount of, and this is what it's called, increase in CPP contributions. I like to call it as an increase in terms or a decrease in the money that's available to you to use. And coupled with the environment that we're in, the economic environment where interest rates have gone up significantly over, interest rates were raised again just a couple of weeks ago, with interest rates raising seven, eight times last year in 2022. But more specifically now the deductions or the money that is, the less money that you're getting out of your paycheck now that's increased about 2.7%. And so before the maximum contribution was 3500, that would get taken off your paycheck annually. Now it's up to 37 54, which is an extra 254 the government is receiving annually. And that's still also slated to go up each year too.
• 2:49
  Speaker A: Well, and what's interesting is Nelson Nash used to call them instead of contributions, he used to call them confiscation. Th so that's how I've come to formally think of them as. And again, a lot of this folks is all kind of tongue in cheek. We're going to have a little bit of fun with this. At the end of the day, I think it's pretty clear I don't really like paying more than my fair share of taxes. I don't think anyone should or needs to. So we're always looking and striving for a way where we can understand more about the system that we're tied to, how that system is pulling out from us versus where is it actually contributing. And so we're going to isolate a very specific example relative to the Canada pension plan and how that's happening. And again, we're going to use a real life example here to talk it through and we'll be spitballing some other things along the way. Now before we do this, I think this is interesting. Right before we went and hit the record button, Henry, you were showing me something. I'm kind of curious to maybe dig into that first. Just around some of the analysis from the CPP investment fund. And you pulled some data around the geographic locations where the ginormous pension fund that's supporting all of the Canadians is putting its money to work. And funny surprise, turns out not a lot of it's going into Canada.
• 4:02
  Speaker B: And the first thing that I think most people have this thought, or maybe hasn't crossed their mind, is we are by legal deduction from the government on a t four income. And it's worse for corporate owners or self employed owners. Self employed individuals self employed paid double the amount. So as I quoted before, 37 54, it doubled. That is 7500 around. And then for the corporate owners, if they pay themselves in the form of a salary, the corporation is going to pay the 37 54. And then personally the individual is going to pay the 37 54. You would assume all that money that is legally required to be paid into the CPP contribution fund in the form of a contribution, that money is put to work. Now, I don't know if many Canadians actually dive into the amount that the fund. We recorded a previous episode talking about how much money the CPP fund lost last year in the elements of 20 ish billion dollars. If that money is being lost, more contributions going in. So the fund is getting more money out, but you would assume they're out to help invest that money. And we live in an open environment where you can invest the money where you feel you get a great return. What's actually surprising, though, is when you're trying to put money, you would assume a good portion of that money comes back to the economy, the citizens who are actually contributing to that fund. So the citizen, as in you and I, are contributing to the fund by legal deduction. And that money, I would assume, gets majority redeployed back into our economy to support our economy. And so, Richard, as you mentioned, I put together some data.
• 5:56
  Speaker A: Imagine that they would invest in businesses in the nation, and they would invest in, I don't know, exploration of state resources and things that tie to the economic engine. It seems like there's an opportunity, potentially, for a little bit more of a closed loop scenario with CPP. Obviously, the investment board needs to make decisions where they think they can get the best potential return to meet the actuarial requirements of their mandate, which is to support these income streams for people as they retire at a later stage of life. With that in mind, just thinking about that for a moment as we roll into what Henry is going to show us, if they think they can get a better rate of return, or on the capital, or maybe even a safer rate of return outside of the country, what is it that they know that we don't know? Or why is it that they're doing that? What do they think about what's going on in Canada that has them not wanting to put more of the capital here? So there's no answer there. It's just an interesting question to kind of chew on as we go through this exercise.
• 6:55
  Speaker B: Yeah, it's actually, you are generating the income or money in Canada, contributing it to the fund, and that money is leaving the country to another place. That's the part that's also what I wanted to highlight. So let's take a look at some of the data. Now, the information I've taken, I've just taken screenshots of the particular annual reports that are from CPPIB or the Canada pension Plan as a whole. CPPIB is just the investment arm of all the money that they receive from the contributions. And so what I've done is I've just compiled it into a spreadsheet that you can see here. And here they have what's called the global diversification. And as at March 31, 2012, I just randomly chose 2012. It was about ten years from now. And you can see, let's say Asia was 5.3%, Japan was 2.6%, Europe was 10%, United Kingdom, 6.8%. North America, excluding Canada, was 29%. Australia, 3.2%. Other was 2.9%. I was just going through all those details, but one thing I want to highlight is, back in 2012, Canada was 40.2%. And now if I go on each incremental year, I'm only going to highlight Canada. So, Canada was 40.2%, which is very close to 50%, which I think that's pretty respectable. I don't know if that's a good amount or a bad amount, but that's a reasonable size, given the geographical diversification that they have.
• 8:24
  Speaker A: And it seems more reasonable based on some of our questioning, like, okay, well, again, this is a system designed by Canadians, for Canadians, for the benefit of Canadians, with a general leaning thought process that you would think would be spur more investment in the country of Canada as a kind of a self supporting system. So I think that's on target, if that's the case. But this is where things get interesting, as Henry shows us here, moving forward.
• 8:53
  Speaker B: Yeah. So their fiscal year end was March 31. On March 31, 2013, Canada's is 36.7. Sure, it's still lots of billions of dollars, sizable difference, but we'll work with that. But as we go on each of the years. So that was 2013. 2014 is now for Canada, 31%. So compared to the 40%, now, it's 9% lower. And then we go to March 31 of 2015. Now Canada is 24%. So 16% compared to the original March of 2012. And then we go to 2016, which is 19%. So now that is 21% away from the 40%. And then 2017, Canada is 16.5%.
• 9:44
  Speaker A: Wow.
• 9:45
  Speaker B: 16.5%. And then 2018 is 15%. 2019 is 15.5%, and 15.6. 2021 is 15.7. 2022 is 16%. And 2023 should come out probably around June, depending on when they audit their financial statements. But I would be surprised if it went back to 40%.
• 10:17
  Speaker A: So, I mean, interesting and just fascinating to look at this. And again, the trend is, I think, what's interesting, but a 24% differential in a ten year time frame where we've seen the churning economic investment capital of the Canada pension Plan, which is substantial. I mean, we're talking about billions and hundreds of billions of dollars in investment money here, floating all over the earth. And the percentage of that money that's sticking within our own Nation is declining. The trend, at least, is declining now, again, there might be a ton of reasons for that. We're not here to speak to what the investment board's thinking or their rationale. I'm sure they have valid reasons. But it seems a little bit odd, as a canadian taxpayer, to see the all the other rhetoric and complaints that we hear about money leaving Canada and investment dollars not coming in, and how much we need to spur our own economy when we have a perfect resource that could help do some of that. And it seems to be taking its money and voting it outside of the nation, 24% of it, coincidentally, over the last decade, that seems to have disappeared. And yeah, it just seems very interesting. It poses an interesting thought exercise. Basically.
• 11:37
  Speaker B: I just want to show one more thing. Maybe it's coincidental, I won't say it, but I just want the listeners to hear. So remember, in 2012 it was 40%, and a pretty significant event happened in the 2015 2016 year, as in a change of some group started somewhere, and now in that 2016, it became 19.1%. I don't know if that's coincidental, Richard.
• 12:10
  Speaker A: Yeah, I don't know. It's interesting to see. So now that we've kind of outlaid a little bit about where capital is being deployed in the CPP, and again, those are publicly available reports, you can go on to the CPP investment board site and look at all of them. I'm sure there's a ton of extra good information on there to dig through. What got Henry and I kind of going today was the conversation, know as we're looking at putting some of the final touches on the aspects of the new book, which Henry has co written around keeping taxes away from your wealth. We're talking about ways where taxation is just coming off the top that you can't really do much about. And the CPP contribution confiscation isn't really a tax, but yet it is a tax because it's collected by the tax authority. It really has the same. There's the expression, if it looks like a duck, quacks like a duck, probability that it's a duck seems pretty high. So I'll let our listeners make their own judgment on that. But what we wanted to look at is. Okay, what amount do people actually contribute to this thing over their lifespan? So, trying to find some data on the average contributions for a canadian taxpayer to the CPP over their lifespan seems a little bit tricky to get some of that data. So instead of trying to get the data of the average person, I kind of thought, well, you know, I'm kind of average. Let's just see what my data is. So for those of you that don't know, granted, some people that know me well would say I'm certainly above average, but for the purpose of our conversation today, we're just going to stick with average. Richard. Kind of like dodgeball, the movie Joe's. You know, I feel like that's the place I would have went and worked out if anyone remembers the movie dodgeball. So if you consider for a moment now working years over time and then moving forward into time, how many more working years I have ahead of me relative to the societal norm, what everyone in kind of the rest of society is turning towards, that's really what we're going to look at here today. And we just have a very rudimentary spreadsheet that we put together. And I literally went into the government of Canada website, like the Service Canada website, you can log in there. If you don't have a login for that, consider going getting one. There's an area where you can actually see your own CPP contributions. You can actually print out a view of that, and then you can also get an estimation of what your potential income is if you took it at 60, 65, or 70, and it gives you an estimate on that income that you would receive. So we're going to look at that as well today in the purpose of our example. Now, before I jump into this kind of weird spreadsheet we got going on here, Henry, is there anything we want to quantify before we kind of show this and just kind of talk through it on the fly?
• 14:52
  Speaker B: Yeah, I mean, what it's going to reveal, and it was eye opening for me to work with you on this, was to see that this is how much you've been contributing into, and you still have quite a few more years to go into before you decide to retire on the standard norm of collecting from CPP at, let's say, 65. So the general age that a majority of Canadians will access CPP or declare for CPP is at 65. Now, some people can delay it to 70, some people take it early at 60, but majority, and when I say majority, a good amount of that is coming at 65. So we are just using that representation. Now, Richard, you're also structured very differently right now compared to also when you first started at 18, I believe. Right, like you started contributing to the CPP at 18.
• 15:41
  Speaker A: That's correct. So we'll talk a little bit about that as we go. We'll maybe do a bit of a summary first, and then we'll circle back to some of those changes, and then we'll talk about when I started my first corporation, and then how that plays a role into the double dipping aspect of what I'm contributing to CPP as well.
• 15:58
  Speaker B: Before we dive into your specifics, Richard, I just wanted to show from the CPP website, they have listed out how the deductions work. So I'm just going to share my screen and put it in Excel column a. You'll see this is the year for the CPP contributions, and this is the maximum annual pensionable earnings that they will calculate using that, and then they give a 3500 exemption. So this is how much an individual get calculated on their base. So if you earn more than 63,100, you are 100% going to make the maximum contributions. Anything that you start making less than that, the maximum amount of contribution. So they cap how much CPP they would take off of your annual paycheck. So going back to my example, in 2022, the amount that an individual who earns more than 61,400 would pay close to 3500 of CPP deductions. And as in 2023, what they've done is they've increased the contribution base from 61,400 to 63,100. Plus they've increased the rate from 5.7 to 5.95%, leading it up to an extra increase in annual contributions of 3754. So if we kind of look back in the previous years, going down and down to, let's say when it first started, crossing 3000 was in 2020. If we actually even go down to 2022, the contributions that an individual would get deducted from was anybody above 46,600 would pay the maximum. So they capped it off at 4600, at 4.95%, and you would only be contributing 2003 six. Again, that might be, for some people, quite manageable, but for now, that amount is, as your income has gone up, you are also contributing a lot more. Anything to add, Richard?
• 17:56
  Speaker A: It's basically like a double. Like it's a double tax. One tax is kind of direct with the percentage, and the other tax is more hidden, which is the amount of your earnings that is forming the calculation. So one's kind of like, hey, here's what we're going to do. The other one's like, oh, by the way, don't pay attention to what this hand is up to, sort of a scenario. But now that we've seen this, so again, we can see the progression of the maximum for the employee side going up. And one thing that Henry's identified here, he's got another column, which is the max. Self employed. So if you're self employed and you're taking an income, whether even if you're incorporated, but you pay yourself a t four income, then you have to pay, the corporation pays, and then you pay. If you're self employed, you're not incorporated, so you have to pay both portions. So whatever your taxable income is for the year, you have to pay the employee side and the business side combined. And so we're going to take a look at that when we flip over to the sheet that I'm going to show, and we're going to actually reference kind of how that looks.
• 18:58
  Speaker B: And the main thing to take away is that what you can see is that amount of that base and the rate has increased. We can't predict or know exactly what that is, but from a track record standpoint, which is all available on CPP's website, that amount has increased significantly. Back in 1966, when CPP first started, individuals were only required to contribute $79. Okay, so just for reference.
• 19:27
  Speaker A: Yeah. So $79 versus $3,700. Obviously, incomes have gone up in there. Like, we get that there's other proportional aspects, but just on the surface level, it's kind of a bit of an eye opener. So let's go ahead and bring up this spreadsheet. So really what we did is I actually copied and pasted data from inside of the CRA or the Service Canada website. And this shows basically the amount of the contributions that I've made personally to CPP starting back in 1999, which was when I turned 18. And so I only worked about less than half the year. And at the time I had taken, well, my first job, I was cutting logs for a neighbor, which was fun, and then using chainsaws. And then I joined my electrical career. And when I got paid as an electrician, as a starting electrician, I was making a whopping $7 an hour, I think was my starting rate. So I worked a number of months there in that, as I began my apprenticeship. So you see that increasing amount over time and then shoot forward to about 2007 was when I first launched. Near the end of 2007, I first set up my corporation. I was contracted as an electrician at that time. And then following that, you see a drop actually in my CPP portion. Well, that's because the amount that I paid myself in t four income was able to be controlled. So I actually made a lot more income in 2007, 2008, et cetera. But the way that I was able to control that, what I had to contribute to CPP was because I was now incorporated. So that's not really well reflected here. But you can see that it goes up and then there's a drop. Now, shooting forward to 2011 and beyond, you'll see a varied number of amounts. And we're going to talk a little bit about this. S on the sidelines here. That is what I want to reflect on. And Henry, go ahead. Some comments from you.
• 21:23
  Speaker B: So, and, you know, these are one of the things that we share in the book, keep taxes away from your wealth. Talking about one of the five ds, which is design, you've changed the design and how you received your income structurally. So that gave you elements of control in order to, in one sense, that 2007 to 2008, you started to contribute less to the CPP because you kept a lot of that capital retained in the corporation.
• 21:55
  Speaker A: Yeah. And so just to highlight, so 2006 was $1,910. My personal contribution, 2007 was $1,061. So it was near the tail end of that year that I set the corporation up and I was able to shift and design my income from being a t four employee to being now working for my own corporation and contracting my services as an electrician. And then in 2008, again, that progressed and continued. So the number is declining from 1910, 1061, then down to 752. For the years 2009 2011, I was transitioning my life into a different type of a career. So my income actually went down. And of course, I had several years of back taxes to deal with there, but that's a different story. And then moving forward in a new career, now as a self employed individual, again, how you frame the income, just shift and change. So it's all relevant to a number of that and maybe some of the tax advice I received at that time. So this is a period of time where I actually went through a number of accountants over a period of a few years. And so that probably reflects some of the amount I was paying here in CPP during this time frame from 2011 to, I don't know, 2015 or so. What's interesting, though, is you see that the number jumps up a lot. It goes to $4,435. It's kind of hovering between 4000 and $5,000 a year in 2016, it was almost $5,100. And that's because we're seeing actually the portion that I paid personally, plus double that the portion I paid as the sole proprietor or as the business owner in that scenario for myself. So you're seeing the double impact of my contributions there. When you scroll down to 2021 and the estimate I have for 2022, it's still working on those numbers. It should be about the same. Again, I'm showing $2,077. This is the combination of what I paid personally plus what the business now is paying, because again, we're designing that income a little bit differently. And why are we sharing all this? Well, here's the interesting thing. When we add up all these numbers, this is approximately 24 years of working years. The total contributions that I've made up to this point in time to this Canada pension plan as a canadian citizen is just shy of $64,000. So $63,552. Now, moving forward, even though I've had the ability to design my income, as my income is shifting and changing, you're going to start to get to a point where as income goes now, as a corporate owner, you run into other barriers on the other side where I might have to mitigate some tax and actually have to pay myself more salaried income, more t four income. So that's a good chance that that could be happening moving forward for upcoming tax years. For me, if that is the case, I may be, I don't want to say forced. I may have to voluntarily choose or decide, working with my tax professional, that it makes more sense from an overarching perspective, to actually take more taxable income and pay more CPP, if that is the case. Now, we don't know that yet, but it certainly is possible that could go that direction. You want to speak to that a little bit? Henry?
• 25:09
  Speaker B: Yeah. And these are elements that, as a good relationship with a tax professional that you have, you would dive into. And these are conversations that we have with our clients, specific areas that they can extract and have more of their capital retained to them. And the technical term is called income planning. And in essence, you're optimizing how much of a portion you want to take from a corporate standpoint, how much you want to take in the personal standpoint, and also the form in how you want to receive it in the form of a salary or a dividend. And again, just putting in for the book, that's where I talk about the definition of how you receive the income. So that is also part of income planning, provided you have a good relationship with the professionals that you work with and the team that you have.
• 25:55
  Speaker A: So with that in mind, I want to circle back to the sheet and highlight a couple of things. Now we've seen what has transpired. We can look back on the past because we have the data. And in this example, realistically, I was still able to control my income to a decent degree because I was still below the maximum on a lot of these years. So I had more income. I paid myself dividends for my corporation. So in many of these years, over the last decade, we are not looking at the maximum potential that I would have had to pay CPP. So again, this is still relevant. If I was employed and earning similar amount of income, or 100% t four, all of these numbers in the last decade would have been higher numbers, primarily speaking, at least I think for the most part, most of them would have been. And so now, with what Henry showed us earlier, we've got an increase to the CPP max, both on the earnings and on the rate that they charge. So now, on an ongoing basis, we already know that the projection going forward is probably much higher. So I think I'm going to do a reasonable estimate. I'm going to reflect back on the 2020 year, 2019 year. They're very similar amounts. It was about $5,300 that I paid CPP as the employer and as the employee. And so if I were to estimate roughly 23 working years, so I'm 42 years young now, add 23 years onto that. That brings me to everyone's mystical age, 65, which I could care less about. But for the purposes of our chat today, we'll use 65. And so that's an additional I would expect $5,400 of contributions or confiscations that are expected, at minimum, for the remaining 23 years of my life. So that adds up to an extra 124 grand, plus what I've already contributed, which reminder is less than what I would have had to contribute based on how much income I actually was able to work and spend with. So my contribution should be higher if I was employed with a typical organization. And now my lifetime total, we're estimating at about $188,000 here in our summary. So comments on that, Henry?
• 28:16
  Speaker B: Yeah, and what's important to recognize is, Richard, you are starting when you were young, so that 63,000 came from a lower income base that you essentially now have reached your peak earning years, which a lot of people will reach into. And as they go into it, it's not like their income really drips down or drops down, and yours is going up. So your contributions actually are going to increase. So 5400 is relatively conservative as a double contribution from the employee and the sole proprietor standpoint, self employed standpoint, because the maximum right now is 7500 and.
• 28:49
  Speaker A: That 23 future years, I'm taking a flat number estimate, and I'm not doing an inflationary increase or the projected annual increases that are currently slated. In order to ensure that the CPP pension system can remain actuarily sound and robust, they have to increase the amount that they're taking in because of the amount of boomers that are retiring in order to continue feeding the beast. It's basically a Rob Peter, in which case I'm Peter to pay Paul and Paul, in this case, let's say, is my, you know, so my dad is receiving CPP and my parents receive. Okay, I get that. And many other people that are in their retirement phase, so they're taking out of my pocket to go put it in that person's pocket. Effectively, yes, there's an investment pool, and it's doing other things as well, losing $22 billion. But the system is on the confiscations happening so that they can move those confiscations around to produce an income for someone's future, many of which are being drawn on presently. So the actual amount I'm using, again, that $5,400 of annual expectations, I do think is very low. So I think I'm being conservative. I think it's fair to assess that we could easily round up my number to at least $200,000 of actual contributions over my working lifetime.
• 30:11
  Speaker B: And so with that in mind, 187, right, Richard? 187.
• 30:15
  Speaker A: Yeah, it was about 188 is what I showed here with my conservative estimate. And so with that conservative estimate, I'm going to switch over to the next thing I want to show everybody. And actually, I realize I need to do here, I printed off an example of essentially what my anticipated income is going to be. So this is one of the cool things you can do. If you are again able to log into your CPP benefit, it'll show you your estimated benefits. So, as of February 6, 2023, the day of recording this, this is accurate. As of today, at age 60, I could receive $723 a month. At 65, I could get $1,130 a month. And if I wait and defer until age 70, I could receive one, $604 a month. So these are my monthly contributions, assuming I'm consistent in my continued contributions confiscations. Sorry. So, with that in mind, I took those numbers. And we plugged that into a simple spreadsheet showing that monthly amount and what that is annually, and then adding the cumulative total up, essentially. Can you see that spreadsheet on your screen there, Henry?
• 31:27
  Speaker B: Yeah. And the column you're using that you're referring to is the gross column, like the gross cumulative, correct.
• 31:34
  Speaker A: This is gross cumulative. So in other words, how much annual income, pretax gross amount of income I would receive. And then we're assuming again, very, I guess the assumptions here, I'm going to put a 25% tax on that, where my net would be roughly after taxation, about 25% less. And so I'm showing the cumulative net estimate as well as the cumulative income total here. Now, this is if I took it starting at age 60. So I'm showing end of year. So if I took it at 60, I would be 61 at the end of the year. Basically, I'd be turning 60 essentially at the time of doing this. Then we've got deferring that income, and then we've got deferring it again all the way to age 70 down here. So when I add these together and I look at the cumulative totals, in order to get all of my money back, based on my currently funded and future conservative estimate of contributions, I would have to receive and live to at least 82 years old. In the first example, if I started at 60, I would have to live to 82 to receive all my money back. And if I waited till 65 and then took my contributions, I would theoretically get them back by about age 79. Whereas if I deferred until age 70, I would get them back at approximately age 80. So this is on the gross number. Whereas if I look@the.net number on a net basis, I would have to live to 89 to get all my money back if I took my income starting at age 60, 84 if I waited to 65 and 83 if I waited till 70. So again, just showing everyone perspectives here, we don't usually look at and assess information this way. This would be just to get even with the program, not including anything else. So in order to actually make any gains or return on it, I guess you could say I would basically have to outlive the program and easily an additional five years in order to have probably the equivalent of maybe a two or 3% growth rate on my contributions over that time frame. So when you really put it into perspective, again, we don't know when we're going to go. This is all under the assumption that I will live a long and healthy life, which I certainly do hope that I will if I do go early. Right now, I have young children. There's a small orphan benefit that kicks in. So that's a nice little advantage. And there's a benefit, a surviving spouse benefit for my wife, but the amount that they receive is much smaller, and they would then have to receive that for a really long period of time in order to get my contributions back. And that doesn't include, again, now my wife's contribution. So again, there's a whole host of things happening here. And as the business owner where my wife, she effectively, presently she does the most important job, which is being a stay at home mom, which is unbelievable. Well, she gets compensated from our corporation, and again, we can design her income as well, so we can manage and mitigate how much contributions we make from her perspective also. So all that being said, there's a whole host of background things happening here with the CPP, and perspective is important. Recognizing that the contribution levels are increasing, the way that they're calculating the contribution levels is increasing. The need to have the contributions at a later date for the retirees is increasing. And how long you have to actually receive your benefits for to be able to actually come out ahead and in this whole circumstance and assessing all these things. Before we hit the record button, what did we spend? Maybe 15 minutes looking at this, Henry, before we hit the record button is what is the opportunity cost on that capital? Because you can't use it. You can't use it to pay off debt. You can't use it to grow your assets in some other way. This is where when you're able to move from the aspect of being able to design your income a little bit, as you talk about in the book, Henry, you can have a little bit more power and control over the use of that CPP dollar to some degree. So for myself, as an example, since I've become aware of this and really understood this aspect, now, I commit that same CPP contribution amount that I would normally be paying those guys into an insurance contract. So I'm creating a far greater output and outcome with something I control that's a mutually benefiting relationship with the insurance company I co own and all the co owners of the insurance company. So perspective is what we're trying to get people to understand. As we have these kind of conversations. We're not trying to necessarily throw this program under the bus. That's not what it's about. It's about having a heightened level of awareness over the things that we are tied to as part of this nation's. Citizenry and where you can start to try and figure out and find and ask the right questions on how you can maneuver through that system to your benefit.
• 36:45
  Speaker B: It's all about the productivity of your capital. And I'll just add as you don't know when your best before date is with the CPP, you will get 2500 as they state right now. But if you just change the location of where you are putting your money, becoming your own banker, owning that process of banking, you can leave a much larger bonus check to your family to why you're doing a lot of the things that you're doing.
• 37:16
  Speaker A: Yeah, and on that note, the bonus check that you get with CPP is $2,500. That's the death benefit that CPP provides. Thanks Henry. Plus it's taxed, whereas the benefit I've been able to create for my family using the same capital amount to create something we own and control is vast multiples greater than that number. And we have total autonomy over our decision process and that's tax free. So with that in mind, thanks for listening to this episode. Hope you enjoyed it. There's boom playlist that just showed up. Make sure you click through it and get some more of that good learning in because we got a lot more great content for you to discover. Cheers. Thanks for listening to the wealth without Bay street podcast where your wealth matters. Be sure to check out our social media channels for more great content. Hit subscribe on your favorite podcast player and be sure to rate the show. We definitely appreciate it. And don't forget to share this episode with someone you care about. Join us on the next episode where we continue to uncover the financial tools, strategies, and the mindset that maximize your wealth.