Canada Pension Plan = Do we have enough money?

When the news says Canada's pensions are in trouble you start to worry about what's in store for you when retirement hits.

A 2 hour Deep Dive into CPP lead to some surprising facts:

• Canadians contribute 9.9% of their salary into CPP up to $45k in salary!!! (If you work for a company they pay half)
• The average benefit is just a little over $500 per month.
• When you 'donate' your contribution part of that money is going to pay for current retirees (Around 9% and rising)

• The best news is that according to an actuarial report CPP is funded for everyone forever and ever and ever.... Of course the contribution rate used to be 3.6%, I wonder what the actuaries were saying then...

I'm happy to read that the problems there having in America with an underfunded pay as you go system. I don't like to read that I'm paying for everyone retiring now. However that seems to be the way of the world. CPP's will be growing its asset base over time from 3.9% assests/yearly expenditure ratio in 2010 to 5.2% in 2050. So they want more money, 'just in case'?

It's just most upsetting to read about how defined pension's are dissappearing in the private sector because todays seniors syphon off too much money, oh and they're still taking from us kids because they didn't pay enough while they were working.

So the amount of money I really have to spend is.

104.95% my income including the 4.95% my employer has to pay to cpp. Yep they know.
- 9.9% for CPP contribution
- 1.73% for Employment Insurance contribution
- 15.54% for Federal Tax if I made around the Canadian average of $45k per year
- 5.08% for Ontario Tax if I made around the Canadian average of $45k per year
- 5% GST
- 7% PST

= 60.70% or if I made $45k I'm left with $27,315 per year. YIKES

Some info:
http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/rates.shtml
http://www.servicecanada.gc.ca/eng/isp/cpp/contribrates.shtml#examA
http://www.osfi-bsif.gc.ca/app/DocRepository/1/eng/oca/reports/CPP/CPP25_e.pdf

The Myths surrounding what Canadians do.

GDP represents what Canada produces in one full year. Why is this important to know? So you can make informed decisions about your career future, your companies future or just so you can make informed political decisions. Politicians don't care about GDP they care about votes.

Some common myths:

Agriculture is very important to our economy.
- In 2009 agriculture accounted for .02% of our economy. So why are farmers always a hot topic in political decision making? In 2001 1 rural vote is worth 34% more than 1 urban vote. Who lives in rural areas? Read here to find more

Our natural resources are the main engine driving our economy.
- Mining and oil and gas extraction was worth twice as much as agriculture. A huge .04% of our economy.

We manufacture goods that other people around the world buy.
- True, but it's not as much as you might think. Manufacturing is about 10% of our economy.

So what kind of economy do we have?
- We have a service based economy. 80% of our economic activity is classified as Services-producing industries. Services the man you called to fix your toilet, the bank you used to finance your mortgage, or the teacher that taught you how to read.