While everyone has different financial goals and dreams, we often have one goal in common – retirement.
Whether those golden years are right around the corner or feel like a lifetime away, it’s important to know what main retirement income sources you’ll be relying on so you can retire with confidence.
Government benefits
Depending on your situation, you may be able to collect up to three government benefits in your retirement. When deciding when to start receiving these income sources, you should keep in mind your health, financial situation and plans for retirement.
Canada Pension Plan (CPP)
If you contributed to the CPP during your working years, you can receive monthly payments to replace part of your income. Your payment is based on how much you earned, your contributions to the CPP and your age when you decide to start taking your CPP. You can start this pension as early as 60 or as late as 70, but remember the later you take your CPP, the higher your monthly payments will be. To give you an idea, the average monthly amount paid for a new retirement pension at age 65 was $815 in 2024, while the maximum monthly amount paid at age 65 was $1,364.60 in 2024.
Old Age Security (OAS)
OAS is another monthly benefit you can receive if you’re 65 or older and have lived in Canada for at least 10 years as an adult. The amount you receive depends on your income and how long you’ve resided in Canada since the age of 18. Unlike CPP, OAS doesn’t depend on your employment history. That means you can get OAS pension even if you’ve never worked or are still working.
Guaranteed Income Supplement (GIS)
The GIS provides a monthly non-taxable benefit to low-income OAS pensioners.
Employer pension
During your working years, you may contribute to your employer’s retirement plan or pension plan. Under these plans, you and your employer regularly contribute money to the plan, so you’ll be able to reap the benefits later during your retirement.
Personal inputs
Besides government and employer contributions, you can build your nest egg to have the most control of your retirement. It’s important to calculate this aspect of your retirement income so you can meet your financial needs when retirement becomes a reality. Two of the most common personal retirement income sources are a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA). Ultimately, your personal savings and investments could make all the difference when it comes to your lifestyle in retirement.
Let’s plan for your future
Retirement Planner Calculator
Saving for retirement can seem daunting, especially if you’re already feeling behind. We understand how overwhelming this can be, so let’s make a plan so you can invest in your future.
If you’re looking for help with retirement planning, our Affinity Wealth Management experts are here to help you plan for that stage of life. Give us a call at 1.866.272.2521 Monday to Saturday, 9 am to 5 pm.