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Where do I get money after I retire?

When you retire you may be able to get income from:
  • government programs
  • workplace retirement plans, and
  • personal savings.

Government programs

Government programs are designed to help people with little or no retirement savings. The more income you have from other sources, the less you will likely get from the government. The most you will get from these plans is about $15,000 each year – unless you qualify for low-income programs. Couples may also get more.

Canada or Quebec Pension Plan (CPP/QPP) – How much you get depends on what you paid into the plan when you were working. It also depends on how soon you start receiving income. You can start as early as age 60.

Old Age Security (OAS) – OAS kicks in when you turn 65, but how much you get depends on how long you've lived in Canada. If you have other sources of income, the government will start to reduce your Old Age Security payments. This is called a “claw back” of your payments.

Guaranteed Income Supplement (GIS) – This program is for low income Canadians over age 65. How much you receive depends on what other income you have, and you have to apply for the program every year.

Workplace retirement plans

Your employer may help you save for retirement. There are three main types of workplace plans: Defined benefit pension plans – with this type of retirement plan, you know how much you will get each month

Defined contribution pension plans – your company contributes to your retirement savings. You invest the money to grow your savings and create income after you retire. With some plans, you may also contribute. How much you get when you retire depends on how much money you make investing.

Group Registered Retirement Savings Plans – here you and your co-workers each contribute to an individual RRSP account. The RRSPs are managed as a group by a bank or other independent company. Again, how much you get when you retire depends on how much you make investing. Also, your employer may contribute to your savings, sometimes matching your contributions. Take advantage of this, if you can – it's like free money!

Your own savings

Personal savings are an important part of many Canadians' retirement income. One of the most common ways people save is through Registered Retirement Savings Plans (RRSPs). Learn more now about How can an RRSP help me save?

Many seniors sell their home and move into a smaller place to free up money for their retirement. Some get a reverse mortgage, which lets them borrow back some of the savings they put into their home. Be careful if you consider this option. Reverse mortgages are not for everyone – especially if you are just starting your retirement.

Did you know?
  • Many older workers intend to keep working.
  • Be careful: job income may affect your income from the government or your company pension plan.