Main sources of retirement income

Key takeaways

  • The Old Age Security (OAS) and the Canada Pension Plan (CPP) are the two federal public pensions in Canada. The province of Québec has its own Québec Pension Plan (QPP).

    Eligibility for the OAS pension is based on how long you've lived in Canada after age 18. Eligibility for the CPP/QPP retirement pension is based on contributions you and your employer made while working in Canada.

  • The public pensions are meant to be a part of your retirement income plan.

    You may have other sources like a workplace pension or personal savings.

  • No matter when you decide to start your public pensions, they will always be available to you.
  • Your pensions will change to reflect increases to inflation. These pensions are taxable income.

    When looking at graphs and tables, remember that you will be taxed based on your total income. The amount you actually receive may be less.

  • Retiring from your work and starting to collect your public pensions are two different things.

    You don't have to stop working to collect your public pensions.


Planning for retirement can be overwhelming, but it's never too early or too late to start thinking about it. Taking the time to plan can help you have a comfortable and fulfilling retirement in the future. An important early step in retirement planning is knowing where your money will come from. This can help you set achievable goals. Retirement income will usually come from these sources:

  • The OAS pension and if you have low income in retirement, the Guaranteed Income Supplement (GIS)
  • The CPP/QPP retirement pension
  • Earnings, if you continue to work in retirement
  • Workplace pension plans
  • Retirement savings and investments

If you've worked or lived in Quebec, you may qualify for the Québec Pension Plan (QPP) retirement pension instead of the CPP. These programs are very similar, but not the same.

To learn more visit the QPP retirement pension website.

Canada's retirement income system

A three-pillar system

First Pillar

Old Age Security Program (OAS)

Financed through general tax revenues

Second Pillar

Canada Pension Plan (CPP)/Québec Pension Plan (QPP)

Financed through employer/employee contributions and investment returns

Third Pillar

Workplace pension plans and private savings (e.g. Registered Retirement Savings Plans, Tax-Free Saving Accounts, etc.)

Financed through employer/employee contributions and private savings

Read Bonnie delays to reduce the savings she needs to see how she uses different sources of income to retire comfortably.

Important: Public pensions aren't intended to cover all your financial needs in retirement. Most Canadians will save during their working years or have another source of income to have enough money in retirement. Canada's public pensions offer you flexibility to start collecting them at the best time for your personal circumstances. Canada's public pensions are financially secure. This means that you can count on them for the rest of your life, no matter when you decide to start collecting them. Public pensions also protect you from inflation. Your pensions will grow to reflect increases to the cost of living.

Old Age Security (OAS) pension

Do you qualify for the OAS pension?

Most people qualify for the OAS pension if they have lived in Canada for more than 10 years after age 18. You will have to be a Canadian citizen or legal resident before you can collect your OAS pension.

You may also be eligible if you've lived or worked in another country that has a social security agreement with Canada.

For more details about if you qualify for OAS pension, visit the OAS pension page.

How much could you collect from the OAS pension?

You are eligible for a full OAS pension if you've lived in Canada for 40 years, after the age of 18.

You could collect a smaller, partial pension if you've lived in Canada for at least 10 years after age 18. A partial pension is payable at a rate of 1/40th of the full pension for every year you've resided in Canada after age 18.

You can start collecting your OAS pension at age 65 but you can also delay up to age 70. After age 70, there is no advantage in delaying your first payment. Learn more by reading Deciding when to start your public pensions.

Helpful resources

Guaranteed Income Supplement (GIS)

The GIS is meant to support people who collect the OAS pension and have low income.

To qualify for the GIS, you must:

  • live in Canada
  • collect the OAS pension
  • have an income below a certain amount

The monthly GIS amount depends on your income from the previous year and your marital status. If you are single, you will collect a higher amount.

You cannot receive the GIS until you start collecting your OAS pension.

Helpful resources

Canada Pension Plan (CPP)

The Canada Pension Plan (CPP) retirement pension provides income replacement for those who have worked or been self-employed in Canada. It is a monthly payment that replaces part of your work earnings in retirement. The amount of your CPP is based on your earnings, contributions to the plan and your age when you decide to start your CPP retirement pension.

Do you qualify for the CPP retirement pension?

If you worked in Canada, and had earnings more than $3,500, you and your employer contributed to the CPP. If you were self-employed, you made contributions for both the employer and employee. Contributions are based on your earnings, up to an annual limit.

You may have pension credits from a former partner as part of a divorce or separation.

How much could you collect from the CPP retirement pension?

Your CPP retirement pension amount depends on how much and for how long you've contributed to the plan. The CPP lets you choose when to start your retirement pension, and each month you delay increases your monthly amount. The highest monthly amount you can receive happens at age 70, after which there is no benefit to waiting. If you need money sooner, you can start collecting your pension as early as age 60, but with a permanent reduction.

The amount for CPP retirement pension is increased for inflation every January.

To learn more about early and deferred pensions, visit Deciding when to start your public pensions.

Helpful resources

What is the CPP Post-Retirement Benefit (PRB)?

If you continue to work while receiving your Canada Pension Plan (CPP) retirement pension, and under age 70, you can continue to participate in the CPP. Your CPP contributions will create Post-Retirement Benefits (PRBs), which will increase your retirement income.

Each new PRB will start the year after the new contributions are made. The PRBs are adjusted based on your age when they begin. If you are younger than 65, the PRB will be reduced. If you are older than 65, the new benefit will be increased.

The chart shows changes in monthly payments for people who work for 3 years after starting their CPP retirement pension. It shows that PRBs are added every year to your CPP retirement pension after you continue working and contributing to the plan.

The PRBs are added every year to your CPP retirement pension after you continue working and contributing to the plan.

Text alternative for How we top up your CPP retirement pension using Post-Retirement Benefits


The chart shows changes in monthly payments for people who work for 3 years after starting their CPP retirement pension. It shows that PRBs are added every year to your CPP retirement pension after you continue working and contributing to the plan.


Values presented on the image:
Number of years you contribute to CPP after starting your pensionCPP retirementPRB 1PRB 2PRB 3Total
Year you start your pension$836---$836
1 year$836$29--$865
2 years$836$29$31-$896
3 years$836$29$31$35$931

When you reach age 65, you can choose to stop making post-retirement contributions by filing a form with Canada Revenue Agency (CRA) and giving it to your employer. This will stop you from earning additional PRBs. Together with your retirement pension, PRBs will be adjusted for inflation every year.

To see the difference between delaying your pension or taking PRBs, read Keith collects his public pensions while working.

Helpful resources

Ongoing earnings from your job

Canadians are living longer and many continue to work in retirement. Some do not stop working at all, but many older workers choose to transition step-by-step into retirement. They may reduce their work hours from full-time to part-time before retiring completely. They can also start a new career or business. If you are interested in these options, we explain how working later in life can impact your retirement benefits.

To learn more about combining income from work and retirement, visit Going from work to retirement

Workplace pension plans

Workplace pension plans are separate from your public pensions. They both try to help you live comfortably in retirement. If your employer offers a pension plan, it's a good idea to learn about the benefits of the plan and get a statement of your contributions. Below are examples of workplace pension plans:

  • An employer registered pension plan (RPP)
  • A group Registered Retirement Savings Plan (group RRSP)
  • A group Tax-Free Savings Account (group TFSA)
  • Pooled Registered Pension Plan (PRPP)

Personal retirement savings

Saving money is important to many for keeping their current lifestyle in retirement. If you don't have a pension plan from your employer, you might need to rely even more on your personal savings. There are different ways to save for retirement, but the two most common are Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs). The government helps you save for retirement through these savings accounts by reducing the amount of tax you pay. If you qualify for the OAS pension and have low income, you may also get financial support through the Guaranteed Income Supplement (GIS).

To learn more about how much income you might need in retirement, check out our page on Planning to save for retirement.

Important: Taking money from an RRSP counts as income that may change your eligibility for Guaranteed Income Supplement (GIS). This could change your next payment cycle that runs from July to June. Taking money from TFSA does not count as income. It will not change the amount of your Guaranteed Income Supplement (GIS).
Disclaimer: This website is meant to give you tips on when to take your public pensions. We do not provide financial advice. Once you have all the information you need, we encourage you to seek help from a financial advisor.

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