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How much money will I get from Canadian Government Programs at Retirement?

When we think about government programs for retirement, most people first consider the Canada Pension Plan (CPP). However, CPP is only available to Canadians who have made contributions through work or through self-employment. In effect, CPP is like an RRSP except it is managed by the government. Further, while there is certainly a relationship between the amount of money you contribute to the plan and the amount you get out, there are lots of factors influencing the monthly payouts and there are those who believe that fiscal pressure and the aging workforce might reduce payments in the future. However, given the reliance of Canadians on this program, it seems to be a good bet to assume that the program will remain relatively intact for some time.

Coming back to the question of how much you’ll receive from CPP, the payments vary based on how long you’ve worked, how much you’ve contributed and how soon you decide to take your benefits. For 2016, the maximum monthly benefit is $1092.50—but the average monthly benefit is only $629.33. So, at best, you should only expect about $1,000 per month from CPP.

Old Age Security (OAS) is the other major Canadian retirement program offered by the government. It is available to all Canadians at 65, regardless of your work status. For 2016, the maximum monthly OAS benefit is $570.52. In addition, the lowest-income seniors can receive the OAS Guaranteed Income Supplement (GIS), which maxes out at $773.60 per month.

With this in mind, an individual at age 65 would receive $14,398 per year, on average from CPP and OAC, or about $20,000 per year at maximum payout.

The government does provide a calculator that might also be helpful in your retirement planning. Your investment advisor can also provide you more personalized advice.

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