Canada Pension Plan (CPP) or Québec Pension Plan (QPP)
The Canada Pension Plan (CPP) and Québec Pension Plan (QPP) provide monthly payments to people who contributed to the plans during their working years.
The amount you’ll get every month depends on how long you contributed to the plan and how much you contributed. It also depends on the age when you start getting your CPP or QPP retirement pension.
Old Age Security (OAS) pension
The Old Age Security (OAS) pension is a monthly benefit for Canadians over the age of 65 years old. You can get Old Age Security pension benefits even if you’re still working or have never worked. You don’t need to contribute to the OAS pension in order to benefit from it.
Guaranteed Income Supplement (GIS)
The Guaranteed Income Supplement (GIS) provides a monthly non-taxable benefit to Old Age Security (OAS) pension recipients who have a low income and are living in Canada. You will automatically be considered for the GIS as long as you file your taxes each year.
Employer-sponsored retirement and pension plans
An employer pension plan is a registered plan that provides you with a source of income during your retirement. Under these plans, you and your employer (or just your employer) regularly contribute money to the plan. When you retire, you’ll receive an income from the plan.
Personal retirement savings and investments
You may have other sources of income during your retirement. Two common sources of retirement income are Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs).
You may also receive income from other sources, such as investments like stocks and bonds or personal savings accounts.
Registered Retirement Savings Plans (RRSPs)
An RRSP is a savings plan designed to help you save for retirement. RRSPs help you grow your money while offering tax benefits. For example, you may pay less tax at the end of the year if you contribute to your RRSP. You also don’t have to pay tax on the money you earn as long as it stays in your RRSP.
There is a maximum amount that you can contribute to your RRSP each year.
Money taken out of an RRSP is considered income. This means that you will have to pay tax on it. This can also impact the amount of money you receive from government benefits, such as Old Age Security and the Guaranteed Income Supplement.
Tax-Free Savings Accounts (TFSAs)
A TFSA is similar to a regular savings account. However, it can also hold a wide range of investment products and it allows your savings to grow tax-free. This means that you don’t have to pay tax on the interest, capital gains or dividends your money earns. You also don’t have to pay tax when you take money out of a TFSA.
Money earned or taken out of a TFSA is not considered income. This means that it will not impact the amount of money you receive from government benefits, such as Old Age Security and the Guaranteed Income Supplement.
There is a maximum amount that you can contribute to a TFSA each year.