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Retirement Tools and Resources
RSP Savings Account
For residents of Canada
Retirement in Canada
The standard retirement age to start the pension is 65. However, you can start receiving your pension as early as 60 or as late as 70 years.
The average amount held in RRSPs nationally is $112,295 in 2020 (Source: BMO's Annual RRSP Survey)
Your retirement income will likely come from: The Canada Pension Plan ( CPP) or Quebec Pension Plan ( QPP ) the Old Age Security ( OAS ) employer-sponsored pension plans and personal savings and investments
What Is Retirement Like in Canada?
Depending on how you set up your finances, retirement in Canada can be enjoyable. The standard retirement age in Canada is 65, but you could receive a pension as early as 60 and as late as 70. From a health perspective, there is also the added benefit of universal health care available, especially for those that retire much older. This doesn’t negate the negative aspects of retirement in Canada. Many Canadians do not set themselves up well for retirement – 32 % of Canadians have nothing saved for retirement.
What Is the Average Canadian Retirement Income?
According to Statistics Canada, the average income for senior households, where the highest earner is 65 years or older, is $64,300. This number drops significantly when we look at unattached individuals over 65 with an average after-tax income of $29,500.
What Government Pensions Are Available in Canada?
Canada’s retirement income system is quite robust, with income coming from three primary sources, which include the Canada Pension Plan, Old Age Security and Guaranteed Income Supplement.
Canada Pension Plan (CPP)
The CPP, or Quebec Pension Plan (QPP) in Quebec, is a plan that provides partial employment earnings to contributors and their families in the event of retirement, disability, or death. Most Canadians pay into this plan throughout their working careers until the age of 65.
Old Age Security (OAS)
OAS is another pension that provides a monthly benefit to most Canadians when they reach 65. You can receive up to $629.49 per month if you are eligible. The difference between OAS and the CPP is that your employment history does not determine whether you will receive the benefit. To be eligible, you must:
- Be 65 years old or older
- Be a Canadian citizen or legal resident at the time of your application
- Have lived in Canada for at least ten years since the age of 18
Guaranteed Income Supplement (GIS)
The GIS is an extension of the OAS provided as a monthly payment to low-income seniors living in Canada. To be eligible for the GIS, you must be 65 years or older, live in Canada, and have income below $18,984 as a single, divorced, or widowed person. Visit the official government website to learn more.
How Many Years Do You Have to Work in Canada to Get a Pension?
Though it differs for each pension plan, you can generally receive the OAS if you are 65 years or older and have lived in Canada for at least ten years. For pension plans like the CPP, you must have made at least one contribution to it.
Can You Get Pension if You Never Worked in Canada?
You can! The OAS is one pension that does not factor in your work history. You can receive it if you meet the eligibility criteria.
How to Prepare for Retirement in Canada?
For many, retirement seems like a far-off reality that we don’t realize comes much faster than we think. Preparing yourself for retirement requires detailed planning and long-term investing to live a comfortable life and reap the fruits of your labour. Here are some questions you should be asking yourself:
- When do you want to retire?
Traditional retirement standards are slowly changing as many people are now opting for an early retirement. The timing of your retirement is essential for you to begin planning.
- How much money do you need to retire?
We all have varying incomes and may need to sustain our current lifestyle when we retire. What dollar amount have you decided you needed to retire?
- What are your retirement income options?
Outside of government pension plans, you should also consider your employer pension plans. In many instances, a portion of the money you contribute to your pension is matched by your employer.
For an in-depth look at potential your retirement journey, visit the retirement financial checklist provided by the Government of Canada.