Are you between ages 65 and 72, working and receiving a retirement pension under the Québec Pension Plan (QPP)? As of 1 January 2024, you can choose to stop contributing to the QPP. This option allows you to have more money in the short term, but deprives you from having a supplement to your pension for life.
You are contributing to the QPP as soon as your employment earnings exceed $ per year. When you are contributing to the QPP, your employer is also contributing to it. All those contributions increase the amount of your pension. This is called the retirement pension supplement, which is guaranteed for life and indexed, therefore adjusted each year to the cost of living, like your retirement pension. If you stop contributing to the QPP, your employer contributions also stop, and the supplement is not added to your pension.
That depends. The retirement pension supplement is paid for life. The longer you live, the longer you will receive it, therefore your contributions will pay off.It is often preferable to increase your retirement income that is guaranteed for life and adjusted to the cost of living. That is a good strategy to adopt to ensure that you have sufficient income throughout your retirement.
In a number of cases, it is advantageous to continue contributing to the QPP, but it all depends on your situation. For more information, consult our experts' analysis entitled Keep contributing to the plan while receiving a retirement pension? or your financial planner.
You have more chances than you think to live longer.
In Québec, life expectancy for a person at the age of 65 is currently at age 90 for women and at age 87 for men. One person out of four will live to age 94.
If you are in good health and have good life habits, you could live longer than average people.
To stop contributing to the QPP, you must meet the following conditions:
Stopping to contribute is a personal choice. Your employer cannot force you to do so.
You will stop contributing to the QPP automatically as of 1 January following your 72nd birthday.
If you meet the conditions, you must complete the Election to Stop Contributing to the QPP or Revocation of an Election form available on Revenu Québec's website. Once you have completed it, you must give it to your employer and Revenu Québec. If you have more than one employer, you must complete a form for each one. If you change jobs and you do not want to make contributions to the QPP for that job, you must complete a new form and provide a copy to your new employer. Your contribution to the QPP will stop the following month.
You can reconsider your decision whenever you want to. To do so, you will have to complete the same form and give it to your employer and Revenu Québec. You will start contributing to the QPP the month following the one during which your employer received the form. However, if you stop contributing during the current year, you will only start contributing again as of the following year.
If you meet all the conditions, you can choose to not contribute to the QPP for your self-employment income when you file your income tax return. You can reconsider your decision each year.
Are you age 65 or over and receiving your retirement pension under the QPP? You may have decided to stop contributing on new employment earnings. If you cancel your pension, you must repay the amounts you received and start contributing to the QPP once again. To do so, you must inform your employer as soon as possible so that the required contributions can be deducted from your salary. You may also need to pay contributions for the previous months for which you should have paid.
