Sources of Income for Your Retirement

Those of you who want to retire soon and don’t know your retirement income source or want to do some kind of calculation to figure out the amount you need at your retirement to keep the lifestyle you have now… this is for you!

 

1) The Canada Pension Plan/Quebec Pension Plan (CPP/QPP).

2) The Old Age Security (OSA).

3) Employer-sponsored pension plans and personal savings and

investments.

 

 

The CPP and QPP – if you worked and contributed during your working years, CPP/QPP provide you with monthly payments.

Your monthly income depends on:

 

i) how long you contributed to the plan.

ii) how much you contributed.

iii) the age you start receiving. The earliest age to take CPP/QPP is 60.

 

Remember, the early you take the lower the monthly

payments will be. You are allowed not to take CPP/QPP till you

reach age 70. The late you take , the higher your monthly

payment will be.

 

 

The OAS pension is a monthly benefit.

 

To be eligible:

 

i) you have to be 65 years old or older. You can start taking OAS at

age 65 or choose to defer for up to 5 years. The more you delay,

the more monthly payments you get.

 

ii) you don’t not need to contribute to it.

 

iii) you have to be a Canadian citizen or legal resident.

 

iv) you have to live in Canada for at least 10 years. The longer you

live in Canada after the age of 18 the more monthly payment

you get. You will be eligible for the maximum amount if you

live in Canada for 40 years or more.

 

v) you don’t need to stop working.

If you have a low income, living in Canada, and a recipient of OAS pension, you will be eligible for The Guaranteed Income Supplement that provides you a monthly non-taxable benefit.

 

If your age is between 60 and 64 and your spouse/common-law partner receives the OAS and is eligible for the GIS, you will be eligible to receive an Allowance.

 

 

i) Employer-sponsored pension plans is:

A source retirement income you received, If your employer

sponsors a retirement plan - such as a group Registered

Retirement Savings Plan or a registered pension plan (RPP).

Under these plans, you and your employer or your employer

regularly contribute money to the plan. When you retire you

may be eligible to receive either a regular income from the plan

or a lump sum of money that you can convert into an income.

 

ii) Personal retirement savings and investments

Two common sources of personal retirement income are

Registered Retirement Savings Plans (RRSPs) and Tax-Free

Savings Accounts (TFSAs).

You may also receive income from non-registered sources, such

as personal investments like stocks and bonds, or personal

savings accounts.

 

iii) Getting money from your home

If you own a home and you're looking for additional income in

retirement, you may be able to use the equity you built up in

your home. You can either sell your current home and buy

another one that is less expensive (downsizing) or get a reverse

mortgage.

 

A reverse mortgage allows you to get money from your home’s

value without selling your home. It is available to homeowners

who are 55 years old or older… the cost associated with reverse

mortgage may be quite high.