Besides your personal savings and investments, do you know how much money you can expect to receive in retirement? To help you better plan, it's important to understand the various parts of the retirement income system.
Canada's retirement income system has three levels.
The first level - Old Age Security
Old Age Security provides a monthly pension to most people over 65 who have lived in Canada for at least ten years. The Old Age Security Program also provides other benefits for low-income seniors, such as the Allowance, the Allowance for the survivor and the Guaranteed Income Supplement. (more details...)
The second level - Canada Pension Plan / Quebec Pension Plan
The Canada Pension Plan can provide Canadians with a retirement pension as early as age 60. This Plan also offers disability, survivors and death benefits. The amount of the pension or benefit depends on how much and for how long a person contributes to the Canada Pension Plan. With very few exceptions, every person in Canada over the age of 18 who earns a salary must pay into it.
The Canada Pension Plan operates in every province and territory except Quebec which has a similar program, the Quebec Pension Plan. (more details...)
The third level- Private Savings
The third level - private savings - includes employer-sponsored pension plans, Registered Retirement Savings Plans (RRSPs), and other investments and savings. (more details...)
Canada's Public Pensions
Public pensions, namely the Old Age Security and the Canada Pension Plan, are designed to provide a secure, modest base upon which to build additional retirement income. Public pensions are not intended to meet all the retirement income needs of Canadians. It is each person's responsibility to look at their own circumstances to decide what level of income is right for them and develop their own retirement plan.
Overall, Canada offers one of the best public pension systems in the world in terms of fairness, level of benefits and affordability. Canada's public pensions are also structured to be financially sound in the years to come.
Learn more about Canada's Retirement Income System - "What's in it for you?". You can also visit the following web pages:
| Old Age Security Program | Canada Pension Plan |
