My retirement income sources
What will my financial needs be at retirement?
Will I need 60, 70 or 80% of my gross income?
And what about my income sources?
Did my planning take into account the fact that once I am retired, I will have a lot fewer deductions like those for public plans, the Desjardins Group Pension Plan, etc.? I will only have my income tax to pay.
Thinking about my finances at retirement now could save me a lot of worry, effort and even money.
To properly plan, I should be aware that once I am retired, I will be able to count on four income sources to meet my financial needs.
The first two income sources are government plans.
I receive basic retirement income from either the Quebec Pension Plan, or QPP, for Quebec employees, or the Canada Pension Plan, or CPP, for employees outside Quebec.
To be eligible for the pension paid by the QPP or the CPP, I must have reached age 60 and must meet certain criteria.
The amount that I will receive is calculated based on my age, the years for which I contributed to the QPP or CPP and the work income my contributions were based on.
In addition, this pension will be paid to me for the rest of my life and will be indexed annually to reflect increases in the cost of living.
It's important to keep in mind that I must apply to receive a retirement pension from the Quebec Pension Plan or the Canada Pension Plan.
The federal government's Old Age Security pension, or OAS, is a little different.
Under the law, to be eligible for a pension, I need to be 65 years of age and to have lived in Canada for at least 10 years since my 18th birthday.
My OAS pension is indexed quarterly to reflect increases in the cost of living.
As with the QPP or CPP, I need to apply to the Canadian government to receive my OAS pension.
These two public income sources can account for a significant portion of my total retirement income.
In addition to the government plans, there is the pension paid to me from the Desjardins Group Pension Plan, or the DGPP. My pension amount will depend on my highest paid years, the number of years during which I was an active member of the plan and the age at which I retire.
Additional and attractive income could be added if I were to build up my personal savings starting now. I could, for example, contribute to an RRSP or TFSA. One dollar invested today will be worth more right before I retire.
When it comes time to retire, I am responsible for requesting my pension from the government and the DGPP. I have a role to play.
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