Retirement planning: government plans

schedule
4 min.

Wondering about the income you’ll have access to in retirement and whether it will be enough? We’ve got the answers to your questions.

What are the pension plans available in Canada?

There are two government plans: the Québec Pension Plan or the Canada Pension Plan and the Old Age Security (OAS) program.

1. QPP/CPP

The first thing to know is that these plans are contributory, which means that to be eligible, you must have made contributions out of earned income. Benefits are determined based on three factors:

  • Your average working income registered with the plan
  • The number of months you contributed to the plan
  • The age you start receiving your pension

In 2022, the maximum monthly benefit was $1,253.59.

To see an estimate of your monthly pension payments, you can consult and download your QPP Statement of Participation from the Retraite Québec website or your CPP Statement of Contributions from the Canada Pension Plan website.

2. OAS

OAS is a universal, non-contributory plan. All Canadians who meet the minimum criteria are eligible. To be eligible for the full amount ($666.82 in 2022):

  • You must be a Canadian citizen or legal resident
  • You must have resided in Canada for at least 10 years since the age of 18
  • Your personal income on line 234000 of your federal tax return must not exceed $81,761 (in 2022). Above this income level, you must repay 15% of the difference to the government.

Will income from government plans be enough?

Unfortunately, most Canadians will receive less than the maximum amount. For example, in October 2022, the average monthly amount1 paid for a new retirement pension (CPP) at age 65 was $727.61, while the maximum monthly amount for 2023 is $1,306.572.

The main reason for this is that many Canadians do not earn the maximum annual earnings during their working years. Also, to be eligible for the maximum amount, you have to have contributed for at least 39 years. Many people claim their benefits earlier than age 65, leading to reduced benefits.

Government plans are more of a complementary income than a primary source of income. To achieve your retirement goals, you’ll need to rely on supplemental plans (RRSPs, TFSAs, private pension plans).

The importance of having a financial advisor

If they could turn back the clock, 23% of retirees would consider getting more retirement planning advice3.

The role of an advisor in creating a retirement plan goes well beyond simply calculating your available income. A disbursement plan will also take into consideration:

  • Your goals (travel, renovations, financial assistance for your children and/or grandchildren, etc.)
  • Your family history
  • Unexpected expenses
  • Inflation
  • An increase in health care expenses over time
  • A sequence of activity periods, from an active period to gradually less active periods, during which your financial needs will be different

Every retirement plan our advisors make is customized based on your needs, your sources of income and the dreams you have for your retirement.

Find an advisor today.


1 Benefits paid are taxable. Data excludes QPP.
2 Government of Canada, Pension Plan - Overview, 2022.
3 Power retirement survey