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The 70% Pension


Pension consultants today suggest that an adequate pension should be approximately 70 per cent of pre-retirement income. RRSP, Registered Pension Plan and Individual Pension Plan contribution levels were originally based on the premise that an annual contribution of 18 per cent of salary would provide a business owner with an adequate pension.

If you earn more than $125,000 annually, you can expect to experience ‘pension discrimination’ because of the cap on contributions. In other words, your pension benefits will be significantly lower than the acceptable standard of 70 per cent of pre-retirement income.

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