Dear Gen Z: Here's what you need to know about the Canada Pension Plan

financialpost.com:

By John Graham

This message is for Gen Z. If you’re not Gen Z, I hope you’ll keep reading anyway.

As we mark Financial Literacy Month, I know many of you are feeling anxious about money. In fact, we’ve heard that over two-thirds of Gen Z worry about making the wrong financial decisions and about the same number are concerned they will run out of money in retirement. It’s understandable — student loans, rent, house prices and the rising cost of living are a lot to manage at any age. At this point in your life, investing money systematically for retirement probably seems out of reach. Fortunately, if you’re part of the Canada Pension Plan (CPP), you’re already doing just that.

Here’s how the Canadian pension promise works: Every month, a small part of your pay goes into the CPP, matched by your employer. The amount not needed to pay current retirees is entrusted to the team at CPP Investments, where we focus solely on growing it for your retirement. When you’re ready to retire, you’ll receive a deposit in your bank account every month for as long as you live — adjusted for inflation to help ensure your financial security.

This year, we’re marking the 25th anniversary of CPP Investments. We started with $12 million; today, the CPP Fund stands at over $646 billion. Of that, $432 billion, after all costs, has come from the investment income we’ve generated on top of your contributions. Our mission is simple: While you’re building your life, education, career and family, we’re behind the scenes, quietly helping to grow and protect your retirement savings.

For your generation, the CPP will be especially important. People are living longer, and many of you might not retire in your 60s like past generations. You have more