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Finance & Legal :: Financial Resources :: Retirement Income System

Retirement Income System

To plan for retirement, it is important to understand the Canadian retirement income system. There are three main sources of retirement income that you may be able to draw from:

  1. your personal savings and investments;
  2. government pension benefits; and
  3. employer pensions. 


these can include:
Money in savings accounts; investments such as stocks and bonds; Registered Retirement Savings Plans (RRSPs) Registered Retirement Income Funds (RRIFs); Tax Free Savings Accounts (TFSAs).
You may also have accumulated property such as your home, or financial and business assets. You can consider using your property or business assets as sources of retirement income.


Government pension benefits provide a modest base on which to build your retirement income. The Government of Canada provides:

  • Canada Pension Plan (CPP) retirement pension;
  • Old Age Security (OAS) pension;
  • Guaranteed Income Supplement (GIS);
  • Allowance and the Allowance for the Survivor(CPP).
  • Veterans Affairs Benefits (disability & health as appropriate)

1-800-277-9914 EN; 1-800-277-9915 FR; TTY 1-800-255-4786

The CPP operates throughout Canada, except in Quebec, where the Quebec Pension Plan (QPP) provides benefits. 

You qualify for a CPP retirement pension if you worked, you have made at least one valid contribution (payment) to the Canada Pension Plan, and you are: at least 65 years old; or between age 60 and 65 and willing to take a reduced amount. Your retirement pension does not start automatically. You must apply for it. N.B. Changes are being phased in, therefore checking details is important.

The Old Age Security (OAS) Pension is a monthly benefit available to most Canadians 65 years of age who meet the Canadian legal status and residence requirements. You must apply to receive benefits. . N.B. Changes are being phased in, therefore checking details is important.

The Guaranteed Income Supplement is a monthly benefit paid to eligible residents of Canada who receive a basic, full or partial Old Age Security pension and who have little or no other income. Recipients apply once & then requalify annually for the Guaranteed Income Supplement benefit by filing an income statement or by completing an income tax return by April 30.

The Allowance is a monthly benefit for low-income seniors (aged 60-64) whose spouse or common-law partner is eligible for, or currently receiving, the Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS). You may qualify for the Allowance for the survivor if your spouse or common-law partner has died, and you have not remarried or entered into a new common-law relationship for more than 12 months.

Veterans Affairs Canada has a wide variety of benefits and services for veterans and their families.  These include financial and disability benefits, health care benefits, war veterans allowance and the Veterans Independence Program, assisting veterans to remain healthy and independent in their own homes (details in resources listing attached).  Veterans Affairs Canada:  1-866-522-2122

The Government of Ontario provides the Ontario Guaranteed Annual Income System (GAINS) to ensure a guaranteed minimum income for Ontario seniors. It provides monthly payments to qualifying pensioners on top of the federal Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS) payments. No application is necessary. If you meet the eligibility requirements, your benefits will be determined automatically based on information from Human Resources and Skills Development Canada and information provided on your annual income tax return. 


Many employers sponsor registered pension plans. There are 2 main types: Defined benefit plans provide you with a pre-determined percentage of your working salary when you retire: Defined contribution plans provide you with a pension benefit based on the accumulated contributions and investment income.

If you contributed to one of these, you should receive a statement from the plan administrator telling you the amount you can expect to receive as retirement income. If you participate in a pension plan that is integrated with the CPP, the amount of pension benefits you receive from the plan is reduced when you qualify for CPP retirement benefits.

Other types of employer sponsored retirement savings plans include deferred profit-sharing plans and group Registered Retirement Savings Plans. If you have contributed to one of these types of plans, contact your employer to find out what type of benefits you can expect to receive from the plan.

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