👵Pension Calculator

Deciding When to Start Your CPP

In Canada, you can start receiving your CPP as early as 60 or as late as 70. Starting early results in a permanent reduction of 0.6% for each month before age 65. Conversely, delaying until 70 increases your monthly payment by 0.7% for each month after 65. Our calculator helps you visualize the 'break-even' point, showing how waiting even a few years can significantly increase your guaranteed lifetime income in Canada.

Service Canada – CPP Retirement Pension

Understanding OAS and the GIS Top-up

Old Age Security (OAS) is a monthly payment available to most Canadians aged 65 and older. If your income is low, you may also qualify for the Guaranteed Income Supplement (GIS). However, if your individual income exceeds a certain threshold (approx. $86,000), you may have to repay part of your OAS (the 'OAS recovery tax' or clawback). This tool helps you plan your retirement withdrawals to minimize these clawbacks and maximize your total government support.

CRA – OAS Recovery Tax

The Impact of CPP Enhancement

Since 2019, the CPP has been undergoing an 'enhancement' phase to increase the replacement rate of the average worker's earnings from 25% to 33%. While this means higher contributions now, it results in a larger pension for future Canadian retirees. Use this calculator to see how these ongoing changes will affect your projected benefit, helping you adjust your private RRSP and TFSA savings accordingly.

Department of Finance Canada

How much is the maximum CPP payment in Canada?

For 2024, the maximum monthly CPP retirement pension at age 65 is approximately $1,364.60. However, the average amount paid to new beneficiaries is often much lower (around $830). Your specific amount depends on how much and how long you contributed. Our calculator uses your estimated years of contribution to provide a more realistic figure than the national maximum.

Does my spouse get my pension if I pass away?

In Canada, the CPP includes a 'Survivor's Pension' for the legal spouse or common-law partner of a deceased contributor. The amount depends on the survivor's age and whether they already receive their own CPP. OAS does not have a survivor benefit, but low-income survivors aged 60-64 may be eligible for the 'Allowance for the Survivor.' This tool helps couples plan for joint retirement security.

Can I collect a Canadian pension if I live abroad?

Yes, OAS and CPP can generally be paid to you even if you live outside of Canada, provided you met minimum residency or contribution requirements while in Canada. However, non-resident tax may be withheld by the CRA unless your new country has a tax treaty with Canada. This tool helps you estimate your 'net' pension income regardless of where you choose to retire.

Start Early

The power of compound interest means starting early can dramatically increase your pension pot. Every year counts.

Maximize Employer Contributions

Contribute at least enough to get your full employer match - it is essentially free money. Many employers match contributions up to 5-6%.

Increase Contributions with Raises

When you get a raise, consider putting half of it into your pension. You will not miss money you never got used to having.

Annual Reviews

Review your pension annually. Check fees, performance, and whether your allocation still matches your risk tolerance and timeline.

Income Replacement: 70-80%

Most experts recommend replacing 70-80% of pre-retirement income. You will have fewer expenses (no pension contributions, mortgage potentially paid off), but may have higher healthcare costs.

The 4% Rule

A common guideline is that you can safely withdraw 4% of your pension annually. This means you need 25x your annual retirement expenses saved.

Asset Allocation by Age

A common rule: subtract your age from 110 to get the percentage in stocks. At 30, that is 80% stocks, 20% bonds. At 60, it would be 50% stocks, 50% bonds.

How much should I contribute?

A good rule is to contribute 12-15% of your income (including employer contributions). At minimum, contribute enough to get your full employer match.

What if I start late?

It is never too late to start. Contribute more aggressively, consider delaying retirement by a few years, and consider part-time income in retirement to make up the gap.

What return rate should I use?

For long-term planning, 6-7% is a realistic estimate after inflation for a diversified stock/bond portfolio. Be conservative - better to have a pleasant surprise than fall short.