The MoneyReady App allows you to specify how to estimate the CPP/QPP pension in one of two ways:
The most accurate way. For this, you will need to specify your past CPP/QPP pensionable earnings; you can access that information from the CRA/RQ website (links below). You can now copy the table from the website, making sure to copy a few lines before and below it so you have everything, and paste it the input box. No need to worry what that looks like. Click on the Parse button, and the pasted text will be parsed and entered into the table. The paste/parse function will work directly from the CRA or RQ websites, but also from most plain text files (not Excel) if it was copied to one first. Once your current table submitted, you will be shown an estimate of your CPP/QPP pension if that pension was started at 65. This is what the CPP/ calculator on the CRA website does, so you can check that our calculation is correct by checking that the number corresponds to what the CRA/RQ says (it should be identical or extremely close). This estimate will only be close to what you will actually receive if you are close to 65 and retiring soon. If that is not true, that estimate can be way off as it assumes that you will continue to earn, in the future, the average earnings you have earned over your past career. If you continue to work and have higher wages (even considering inflation), the amount will be underestimated, and if you retire early, the amount will be overestimated.
Similarly for QPP, we show an estimate at 65 with the same assumptions made by the CRA calculator, but with QPP calculations, which are similar but there are significant differences. The QPP statement provides several estimates projecting future earnings, but it is unclear what their actual assumptions are for those calculations, so our estimate and theirs will be probably be different.
A less accurate way, which does not require inputting the table, is to guess at the portion of the maximum pensionable earnings you made in the past. If you are a high-income earner and have always been, then set it to 100%. If you started working late, due to schooling and/or child-rearing (although the TIME MACHINE does consider the child rearing drop-out provision), you may want to set that lower. For new retirees in 2019, the average CPP payout is 723.89, which is ~62% of the $1,154.58 maximum. The program will fill the table with all of the amounts at the proportion that you set. It will still fill in the future years with any entered qualifying INCOMES.