On average, Canadian retirees aged 65 only received 58% of the maximum amount they could have been eligible for?
In April 2022, the average monthly amount paid for a new retirement pension (CPP) was $727.61, while the maximum amount is $1,253.592.1 2
| Maximum amounts for government pension plans in 2022 | |||
|
Governement pension plan |
Age |
Maximum monthly |
Note |
|
CCP/QPP |
60 |
$802 |
Before 65, payments will decrease by 0.6% each month, up to a maximum reduction of 36% if your client start at age 60. |
|
65 |
$1,253 |
||
|
65 or older |
$1,780 |
After 65, payments will increase by 0.7% each month, up to a maximum increase of 42% if your client start at 70 (or after). |
|
|
OAS |
65-74 |
$666 |
$8,002 |
|
75 or older |
$733 |
$8,802 |
|
Retirement planning: Are government plans enough?
Most of your clients won’t be eligible for the maximum pension benefit amounts for a few reasons:
- Average income not sufficient to make maximum contributions. CCP/QPP : In 2022, the maximum contributions of the CPP/QPP are $3,500 and $3,776, respectively, and correspond to a salary of $64,900.
- The number of years of contributions to government plans between 18 and the time benefits are paid.
- The age when benefit payments begin.
Government plans are more of a complementary income than a primary source of income. To accomplish their retirement plans, your clients must therefore rely on supplemental plans (RRSPs, TFSAs, private pension plans).
The importance of retirement planning
Making a retirement plan goes far beyond available income. The disbursement plan must also take into consideration:
- A sequence of activity periods, from an active period to gradually less active periods, during which financial needs will be different
- The projects planned during the most active period (trips, renovations, financial assistance to children and grandchildren, etc.)
- An increase in health care expenses over time
- Your clients’ family history (longevity vs. premature death)
- Unexpected expenses
- Inflation
It’s never too early to talk about retirement
If they could turn back the clock, 23% of retirees would consider getting more retirement planning advice.3
Talk about it today!
F13-668 - Planning the retirement income
1 Benefits paid are taxable. Data excludes QPP.
2 Government of Canada, Pension Plan - Overview, 2022
3 The new retirement reality, Mackenzie Investments
