Retirement planning: government plans
What are the pension plans available in Canada?
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:
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.
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):
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.
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:
Every retirement plan our advisors make is customized based on your needs, your sources of income and the dreams you have for your retirement.
1 Benefits paid are taxable. Data excludes QPP.
2 Government of Canada, Pension Plan - Overview, 2022.
3 Power retirement survey