 | How Will I Pay For Retirement?
There are basically three different sources of income at retirement:- Government benefits,
- Personal savings, and
- Your company-sponsored group retirement savings plan(s).
Government benefits
The Government of Canada provides the following retirement benefit programs:
· Canada Pension Plan (CPP) / Quebec Pension Plan (QPP); and
· Old Age Security (OAS).
The amounts available through these programs change as frequently as quarterly.
The Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP) – created in 1966, the CPP/QPP is designed to replace 25% of your earnings up to the yearly maximum pensionable earning (YMPE). The 2011 YMPE is approximately $48,300 so if you make more than that, CPP/QPP is not designed to replace anything above this level. This puts greater emphasis on the need for personal savings.
You can request a copy of your CPP Statement or a QPP Statement of Participation, which will give you an estimate of how much you could receive in retirement, or in the event of death or disability.
Old Age Security (OAS) – introduced in 1927, OAS provides a minimum level of security for retirees. In 1989, an income test was introduced that can "claw back" up to 100% of OAS for higher earnings.
You may be eligible to start receiving OAS payments at age 65.
For more information on government benefits or to request a copy of your CPP Statement or QPP Statement of Participation, visit www.sdc.gc.ca/en/home.shtml.
Your company's group retirement savings plan(s)
Through Manulife Financial, your company offers a group retirement savings plan(s). You can take advantage of a variety of benefits by participating in the plan. Refer to your plan member booklet for more details.
Personal savings
You may be investing retirement savings in a variety of places, such as savings accounts and individual retirement accounts. These will also contribute to your retirement income.
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