In 3 years, Andrea will be 61. Andrea is thinking that, in 3 years, she might...

 

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In 3½ years, Andrea will be 61. Andrea is thinking that, in 3½ years, she might retire only part-time. As a result, she is not sure she would take the CPP in 3½ years. Andrea's father and grandfathers died in their mid-70s, but her mother and grandmothers lived to their late 80s. Assume the maximum CPP she is eligible to receive at the beginning of the year at age 65 is $15,000. If Andrea thinks she might live to age 90, should she take the CPP retirement benefit at age 61 or wait until age 65? What are both her options worth at the age 61? Use a discount rate of 3% to evaluate what the CPP annual cash flows will be worth. Show all calculations. Ignore taxes & inflation. In 3½ years, Andrea will be 61. Andrea is thinking that, in 3½ years, she might retire only part-time. As a result, she is not sure she would take the CPP in 3½ years. Andrea's father and grandfathers died in their mid-70s, but her mother and grandmothers lived to their late 80s. Assume the maximum CPP she is eligible to receive at the beginning of the year at age 65 is $15,000. If Andrea thinks she might live to age 90, should she take the CPP retirement benefit at age 61 or wait until age 65? What are both her options worth at the age 61? Use a discount rate of 3% to evaluate what the CPP annual cash flows will be worth. Show all calculations. Ignore taxes & inflation.

Answer rating: 100% (QA)

Step 12 If Andrea lives to age 90 she should take the CPP retirement benefit at age 61 Both her opti... View the full answer