It is a bit sad, Art. From the 2013-14 CPP Annual Report we learn this:
"The amount of contributors’ pensions depends on how much and for how long they have contributed and at what age they begin to receive the benefits. In 2014, the maximum monthly retirement pension was $1,038.33, and the average payment in 2013-2014 was $535.96."
That's about $400 U.S. I am not surprised. Very few people manage to stay employed steadily for about 40 years, earning the max CPP contributory rate.
I should add, however, that it's a bit less bleak in some ways than the picture I have painted. In addition to CPP, most Canadians get the federal Old Age Pension at age 65. I think it pays a max of about $570 a month at present. It is not related to work, or contributions, but just to putting in your time in Canada. Anyone who has lived in Canada for at least 10 years after age 18 qualifies. To get the max amount, you have to put in 40 years. For people with low incomes, they can also get the "Guaranteed Income Supplement" of up to $772 per month. For those with incomes over about $70,000 per year, the OAP gets reduced, down to zero by $118,000 per year.
Art, as for your query about average tax brackets, pay scales, I have lived and worked in both Canada and the U.S. and, overall, my observations are that wages on both sides of the border are similar, for similar work. U.S. taxes are, overall, lower.
As is occurring in the U.S. right now, employees are being told not to count on things such as social security payments, or Canada Pension Plan payments, to allow one to live in retirement. Those things should simply be looked at as providing a bit extra. Both governments are telling people to find other ways to fund retirement. In both countries, the "traditional" pension from one's employer is dying out. Fewer and fewer companies provide pension plans. So, it's become 401ks, Roth IRAs and, in Canada, RRSPs (registered retirement savings plans) that we are told to look to. Those tend to relegate to the individual the duty to save, invest, manage, etc. Some are better at it than others. Some are abject failures. Even the most prudent investor can be hit hard my market downturns, etc.
It appears to me that traditional pensions are now enjoyed primarily by those in government jobs, at the various levels of government. They are the envy of many. With good reason. In Canada, a great many government pensions work like this: you take the average of your best 5 years' salary (usually your last 5 years). You earn 2% of that average figure for each year of contributing (along with the employer) to the pension plan, to a max of 70% after 35 years. So, someone who started at age 20 and retires after 35 years at age 55, would get a pension of $70,000 a year if they were earning $100,000 in the last 5 years. Those amounts are almost always indexed for inflation. No worries about unfunded liability, should that occur, because the taxpayers will, in effect, fund the shortfall. So that pensioner will get his $70,000 a year, plus CPP, and a portion of the OAP.
The unfortunate reality for many is that they never were members of a pension plan and were never diligent about saving for retirement. While governments have sought to encourage saving, by making contributions tax deductible and eventual withdrawals taxable, many people fall woefully short of the mark in arriving at age 65 or so with significant sums stashed away. Some of those fall for the lure of the totally false mantra of "Live like a king in the Philippines for $1,000 a month."
Topic: Canadian Pension Income, Canadian Employment Income, Philippine Income Tax (Read 5631 times)