Retirement Age

Retirement Age in Canada 2021

Retirement age is the established age at which a person is required to stop working. It is also the age at which they are entitled to get benefits from the government like state pension. While deciding the retirement age, several factors are put into consideration like health, life expectancy, nature of job, labor force, fiscal cost, etc.

What is The Retirement Age in Canada?

Retirement differs according to country, Normal Retirement Age (NRA) is the age employees qualify to retire from working and start receiving a full pension.

In Canada, the retirement age is 65; age 55 is the earliest retirement age, while the average retirement age is 63. Age 65 the age at which you qualify to start receiving Old Age Security Pension (OAS).

OAS is a government program open to all Canadian aged 65 or above who have resided in the country for at least ten years. The amount to be gotten depends solely on how long you have stayed in Canada since you turned 18. Note that high earning individuals do not qualify to collect OAS.

Canada’s retirement benefits system is established on three major pillars as it is termed.

  • The Universal Government Benefits

This includes the Old Age Security (OAS) and Guaranteed Income Supplement (GIS)

  • Canada/Quebec Pension Plan
  • Voluntary Retirement Savings Plans

These include the Employment Pension Plan (Defined Benefit and Defined Contribution Pension Plans) and Individual Retirement Savings (RRSPs – Group, Spousal, and Pooled).

How Much is CPP at 60?

The Canadian Pension Plan (CPP) is a program that provides retirement, survivor and disability benefits to retirees. Age 65 is the age when retirees get to receive benefits from the Canada Pension Plan (CPP). CPP is linked to how much you contributed over the years to your retirement.

To know the exact amount you contributed over the years, contact Service Canada on 1-800-277-9914, you will be given access to your online statement. The maximum payment amount due at age 65 for CPP is $13,855 yearly. If you decide to take your CPP at age 60, the amount would be reduced to$8,867 yearly.

How Many Years Do You Have to Work to Get Maximum CPP?

Not everyone gets maximum CPP as the amount you receive depends on how much you contribute while still employed. Eligibility to get maximum CPP depends on your years of contributions and amount contributed.

  • Years Of Contributions

To receive maximum CPP, you must contribute to CPP for at least 83% of the period you are eligible to contribute. Note that you are eligible to contribute to CPP from age 18 to 65, which is 47 years. Since you are required to contribute at least 83% of the time that makes it 39 years.

You have to work for 39 years to be eligible to receive maximum CPP if your years of work does not add up to 39 years from 18 to 65, then you would not receive maximum CPP. Notably, you might get maximum CPP, though it would be based on other qualifications.

  • Amount Of Contributions 

Yearly as you work and contribute to CPP between the ages of 18 to 65, your benefit keeps increasing. To qualify for maximum CPP, ensure that you contribute enough between the ages of 18 to 65.

To determine if you have contributed enough, CPP uses the Yearly Maximum Pensionable Earnings (YMPE) to track your contributions.

What Benefits Do I Get At 60?

There are several federal and provincial programs and benefits available to retirees from age 60. Note that individuals are considered differently for these benefits. On the federal level, there are a few benefits open to retirees like;

  • Old Age Security (OAS)
  • Guaranteed Income Supplement (GIS)
  • Allowance And Allowance For The Survivor
  • Canada Pension Plan (CPP/QPP)
  • CPP Post-Retirement Benefits (PRB)
  • CPP Survivor Benefits
  • CPP Death Benefit
  • International Pension Benefits

Do You Get CPP if You Never Worked?

If you have never worked or contributed money towards your old age, don’t fret, you can be eligible to over $24,000 yearly, a larger portion of which is tax-free and tagged to the cost of living.

To be eligible, you must have Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). You must have attained age 65 and meet the least Canadian residency requirements.

If you have never worked before, you get little or no CPP but may be eligible for maximum GIS alongside OAS. You may also be eligible for different provincial top-up programs like GIS, such as Ontario’s GAINS (Guaranteed Annual Income System).

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