Where Will Your Retirement Income Come From?

3 min read
Brought to you by Sound Choices - AGF Education for Investors and Advisors

Sources of retirement income

For most Canadians, the likely sources of retirement income will include government benefits, registered retirement savings, non-registered savings and company pensions.

Your government benefits will generally consist of Old Age Security (OAS) and Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) payments. According to Service Canada, the average combined CPP and OAS benefit is currently about $17,000 per person per year. You’ll also receive the Age Amount, which isn’t a paid benefit but rather a federal non-refundable tax credit given to every taxpayer who is 65 or older at the end of the year.

Some provinces provide additional benefits for retirees, particularly lower-income earners. Your advisor can provide you with more information specific to your province and situation.

Your registered savings are whatever you’ve saved in a Registered Retirement Savings Plan (RRSP), Registered Pension Plan (RPP) or Tax-Free Savings Account (TFSA). Your non-registered savings include everything else, like money you have in a savings account, “open” investment account or invested in your home.

If you’re not sure if you have a company pension plan, speak to someone at your company’s Human Resources department.

About clawbacks

If you’re counting on government benefits as part of your retirement income, keep in mind that OAS and the Age Amount are dependent on how much you earn. If your income is too high, these benefits may be reduced (or “clawed back”) or eliminated altogether.

For more information on the OAS and Age Amount thresholds, visit the Service Canada website.

To minimize the impact of both Age Amount and OAS clawbacks, it’s a good idea to have multiple sources of income in retirement: fully taxable (RRIF, pensions, CPP, OAS), tax-preferred (dividends, capital gains) and non-taxable (TFSA, return of capital). Your advisor will work with you to create a plan that maximizes your retirement income while minimizing clawbacks.

To learn more about your retirement income, including government benefits, talk to your financial advisor or visit AGF.com/RRIF.

Commissions, trailing commissions, management fees and expenses all may be associated with investment fund investments. Please read the prospectus before investing. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

The information contained in this document is designed to provide you with general information and is not intended to be tax advice applicable to the circumstances of the investor. Investors should consult their investment professionals and tax advisors prior to implementing any changes to their investment strategies.

The contents of this website are provided for informational and educational purposes, and are not intended to provide specific individual advice including, without limitation, investment, financial, legal, accounting or tax. Please consult with your own professional advisor on your particular circumstances.

This document may contain links to third-party websites. The parties who own, maintain or control third-party websites are solely responsible for their content, and AGF assumes no responsibility for such content. Links to third-party websites are provided for convenience only and are not to be construed as an endorsement or recommendation of the products, services, advice or information that may be available on them.

AGF Investments is a group of wholly owned subsidiaries of AGF and includes AGF Investments Inc., AGF Investments America Inc., AGF Investments LLC, and AGF International Advisors Company Limited. The term AGF Investments may refer to one or more of the direct or indirect subsidiaries of AGF or to all of them jointly. This term is used for convenience and does not precisely describe any of the separate companies, each of which manages its own affairs.

® TM The “AGF” logo and all associated trademarks are registered trademarks of AGF Management Limited and used under licence.

RO 2717835

March 2, 2023

Browse the Library

Working With A Financial Advisor

A financial advisor can play an important role in your investment future
Our website uses cookies to help you get the best experience. Please Accept or click Edit to control your settings.
Edit cookie settings Accept all cookies