The ability to live life on your own terms in retirement is often considered the ultimate goal. To achieve this you must ask yourself – will I have enough money to retire?
By assessing your priorities, taking stock of your sources of income and establishing goals, you can take the appropriate steps to help ensure you will have the financial resources you need to transition into retirement with confidence.
Once you are no longer working, your retirement income will most likely come from three key sources: government benefits, employer retirement or pension plans, and personal savings and investments.
Government benefits could come in the form of the Canadian Pension Plan (CPP), which provides a monthly benefit to eligible Canadians starting as early as age 60, or Old Age Security (OAS), which begins at age 65.
| Canadian Pension Plan pensions and benefits - Monthly and maximum payment amounts - January 2025 |
|---|
| Type of pension or benefit |
Average amount for new beneficiaries (October 2024) |
Maximum payment amount (2025) |
| Retirement pension (at age 65) |
$808.14 |
$1,433.00 |
| Old Age Security pension and benefits - Monthly payments amounts and maximum annual income - January to March 2025 |
|---|
|
Maximum monthly payment amount |
Annual net income to receive the OAS pension in 2024 |
| Ages 65 to 74 |
$727.67 |
Less than $148,451 |
| 75 and over |
$800.44 |
Less than $154,196 |
Employer retirement or pension plans may also be in place if you’ve contributed to a company pension plan at work. Be sure to check with your employer for details because each company is different.
Your personal savings may include money you’ve set aside in a Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA), which allow your investments to grow on a tax-advantaged basis. Of course, you may have other savings and assets that can provide you with even more flexibility by providing other sources of income in retirement.
Whether you are nearing retirement or still many years away, there are four ways you can boost your retirement income. To remember them, think of the acronym STEW:
Save more
A useful habit to develop in order to grow your savings is to regularly increase contributions to your RRSP (subject to limits). Paying yourself first is a proven way to save more and the sooner you start, the better. Saving more may also mean spending less today. This doesn’t necessarily mean huge sacrifices but rather an awareness of how to spend more conservatively during your working life in order to preserve wealth for the long term. To do this, examine your current expenses and look for ways to cut back. Any small savings can help and be sure to contribute them into your retirement plan right away.
Take less
If you aren’t in a position to increase the amount of money you save, then it might be time to review your spending expectations in retirement. Think about what is most important to you and be realistic about your desired lifestyle. There are usually ways to make smart adjustments to make your plans fit your financial means.
Earn more
If you are concerned about not reaching your retirement savings goals, there are steps you can take now to earn more. When it comes to investing, earning more may mean repositioning your investments to potentially earn a higher rate of return. However, it is important to understand your risk tolerance since aiming for a higher rate of return usually means taking on more risk. You may also want to explore different career options that earn a higher salary or taking on part time or consultant work to beef up your income.
Work longer
Are you open to the idea of delaying your retirement a few years? Delaying your retirement could allow you to defer government benefits for a few years while building up your savings. What about continuing to do some paid part-time work in retirement? The structure of employment in today’s society is changing and many people find gratification from working part-time in retirement rather than stopping work completely.
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