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There are some flaws in the Canada Pension Plan, but the general concept has a lot of value at a time when people aren’t saving as much as they used to and household debt levels keep rising.

A lot of critical commentary about the CPP fails to make this distinction. You’ll hear about the CPP’s faults, without recognition of its importance in providing retirement income to Canadians. An example of this was a recent op-ed piece that caught the eye of Leo Kolivakis, an economist and pension consultant who writes a blog called Pension Pulse. Mr. Kolivakis reprints this critical take on the CPP, and then offers a much-needed rebuttal. I encourage you to read it if you wonder whether you’re getting good value from your contributions to the CPP.

Mr. Kolivakis actually agrees with some of the criticisms raised by the writers of the op-ed piece. For example, unlike most other pensions, the CPP can’t be bequeathed on death. Spouses get just partial benefits if a partner dies, and there are limits even there. “This is something which needs to be rectified,” he writes.

Still, Mr. Kolivakis says the CPP beats “crummy RRSPs” because it delivers what he believes a pension needs to work effectively: “It needs to be mandatory, you need to force people to save, and it needs to be made clear to them that under no circumstance can or should they take the money out.”

His overall message is worth repeating as well: “the evidence is clear, the CPP is a great deal for Canadians.”

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What to buy at Trader Joe’s

OK, this is a U.S. chain. But I have come across many Canadians who have visited U.S. cities and come to love Trader Joe’s for its huge selection of cheap and cheerful house-brand food products. Here’s a list of 15 items to check out at Trader Joe’s, including tomato paste in a tube.

A new reward card for travellers

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Today’s featured financial tool

This infographic offers a list of tax credits and deductions for the 2017 tax year.

Ask Rob

The question: “I’ve been told that registered education savings plans are the way of the past. Our daughter is currently two years of age. I was thinking about saving through a long term GIC. I would like to know your thoughts on this matter.”

The answer: “RESPs the way of the past? I don’t get that. Contributions to an RESP bring a matching 20-per-cent federal grant that tops out at $500 per year and $7,200 in total per child (slightly more is available for low- and middle-income families). That’s basically an automatic 20-per-cent return on a $2,500 RESP contribution. With a self-directed RESP at an online brokerage, robo-adviser or advisory firm, you can hold pretty much any type of an investment in an RESP. A long-term GIC is an option. But a two-year-old child won’t need the money in an RESP for 15+ years. That’s long enough to benefit from some exposure to the stock market through diversified mutual funds or exchanged-traded funds. If your child doesn’t want to attend college or university, many training programs qualify for RESP funds.”

Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length.

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