Planning for retirement
Planning for your retirement is doable. And with the right guidance, it's much easier. If you're a member, you can book an appointment on AccèsD to plan your retirement.
Not a member? Schedule a call to make an appointment.
Retirement planning steps
Identify your sources of income
Government pension plans don't provide a lot, so you'll need other income sources, such as your personal savings or your employer's pension plan.
Decide on your retirement age
This is how you'll determine how much time you have to save up and reach your goals. Based on the average life expectancy in Canada, you might be retired for over 20 years.
Determine your goals
You'll generally need between 50% and 70% of your annual end-of-career income (after tax) during retirement. However, your goals and desired lifestyle can affect the amount you need to save. It's the nature of your goals and your desired lifestyle that should dictate how much you need to save.
Calculate how much you need to save each year
How much depends on the person. It depends on your situation. Ideally, you should put aside 10% of your annual pre-tax income. However, self-employed workers and salaried employees without a pension may want to save more. The important thing is to have a flexible savings plan and to start saving now, regardless of the amount.
Choose where to invest your savings
Choose investments based on your situation, your risk tolerance, the number of years until you retire and your goals. For example, if you're self-employed, you can alternate between saving for your business and saving for yourself. In any case, we can help you make good choices.
Retirement calculator
Our calculator helps you see the bigger picture by identifying your future financial needs, the savings you'll require and the age at which you can retire.
That way, you'll have everything you need when you meet with an advisor.
Retirement income sources
Government plans
Government plans typically cover between 20% and 40% of the income you'll need.
Old Age Security (OAS)
This is a taxable monthly pension indexed to the cost of living. It's paid to Canadians 65 and older.
Quebec Pension Plan (QPP)
This pension is paid to all Quebec workers who have contributed during their working years. The amount paid depends on the number of years you've contributed, your earnings during that time and the age at which you apply.
- Between 60 and 64: benefits reduced by 7.2% per year
- At 65: full benefit amount
- Between 66 and 70: benefits increased by 8.4% per year
The longer you wait, the higher your benefits will be for the duration of the payment period. Therefore, it may be worthwhile to postpone your application if you have other sources of income.
If you're a self-employed worker who pays yourself a salary, you must contribute to the QPP. If you pay yourself dividends, QPP contributions are optional. If you do contribute, it's better to pay the maximum amount, as the QPP is a significant source of income at retirement.
Guaranteed Income Supplement (GIS)
This monthly benefit is available to low-income Canadians. It varies according to family situation and income. It can also be combined with the Allowance, which is a benefit for people aged 60 to 64 whose partner or spouse is already receiving the GIS.
Private pension plans
In addition to the retirement income from public plans, some employers also offer 2 main types of pension plans. Like government plans, these plans alone don't ensure that you'll maintain your standard of living during retirement.
Defined contribution plan
- You know how much you and your employer contribute ahead of time.
- Pension amount depends on your and your employer's contributions and the value of the pension fund investments when you retire.
Defined benefit pension plan
- You know how much money you'll receive when you retire.
- Usually a percentage of your salary multiplied by your number of years of service.
Your personal savings
Your personal savings may well be your biggest source of income in retirement, especially if you can't rely on your employer's plan. That's why it's important to start saving as early as possible.
Registered investments
- Registered with the Canada Revenue Agency (CRA)
- Provide tax benefits
- Include RRSPs, TFSAs and IPPs
Non-registered investments
- Help you continue saving once you've reached the maximum contributions for your RRSP, TFSA or employer's pension plan.
- Include the money in your bank accounts and investments in the stock market.
- Generate taxable income.
Other income sources
Depending on your needs and goals, you may need to consider other sources of income. Keep in mind that some of these amounts are added to your taxable income and may reduce the income-based benefits you receive at retirement.
- Renting or selling real estate, like your primary or secondary residence
- Working part-time
- Transferring or selling a business
Steps to start preparing for retirement now
Schedule automatic transfers
When you set up automatic transfers throughout the year, you take the work out of saving while accruing interest.
Contribute the maximum allowable amounts
Registered investments grow tax-free for longer and some of them will reduce your taxable income. Since your income will be lower, you'll also capitalize on government income-based credits and programs.
Pay off your debt
Depending on your situation, it may be worthwhile to pay off your debt with a portion of the tax refund you get from your RRSP. You should pay off the debt that has a borrowing rate that's higher than the rate of return on your investment, whether that's your mortgage or other form of debt.
Review your retirement plan periodically
Changes related to the economy, your job, your family situation or your health could have an impact on your ability to save and how you'll reach your retirement goals. Review your retirement plan regularly with an advisor.
Prepare for the unexpected
If you're self-employed, it's important to plan for the unexpected. You can do this by buying insurance to protect yourself in the event of accident, disability or serious illness.
Make an appointment
By phone
Montreal area:
514-224-7737 This link opens your phone app. (514-CAISSES)
Elsewhere in Canada and the US:
1-800-224-7737 This link opens your phone app (1-800-CAISSES)
Or have us call you when it's convenient.