Retraite Québec - For a retirement to your liking

Retraite Québec

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To personalise your retirement to your liking, you must first know about the 3 main sources of income that will allow you to finance your retirement:

Guaranteed basic income

The Old Age Security program

The Québec Pension Plan

Extras

Workplace pension plans or personal savings

The first two sources of income, the public plans, aim to provide basic income guaranteed until death, whereas the third source of income is the one in which you will need to invest the most effort to build a retirement income that is to your liking.

Guaranteed basic income

Public retirement plans from the Government of Canada and the Gouvernement du Québec guarantee a minimum retirement income.

They are the Old Age Security program and the Quebec Pension Plan. They provide basic income for life (until death), which is indexed to the cost of living.

The Old Age Security program has several types of benefits, including the Old Age Security (OAS) pension and the Guaranteed Income Supplement (GIS). These 2 benefits are universal and are designed to guarantee you a first basic income in retirement.

Old Age Security

The OAS program is a uniform benefit paid monthly to all Canadians aged 65 or over, whether or not they have worked. The annual pension is about $7500 and is indexed based on the cost of living four times a year. It can represent about 15% of your retirement income.

Guaranteed Income Supplement

The GIS is for the low-income elderly that receive the OAS. The benefit varies based on income and the marital status of the beneficiary. It is not taxable. The GIS is added to the OAS.

The Québec Pension Plan (QPP) is a public plan financed by contributions from employers and workers in Québec. This plan provides workers and their families with basic financial protection in the event of retirement, death or disability.

The retirement pension under the QPP is intended for every Québec worker that contributed on eligible income greater than $3500. The amount of the retirement pension depends on the number of years of contribution, your income during that period and your age when you apply. The amount is indexed once a year to the cost of living. In 2021, the maximum annual pension is around $15 000 if you start receiving it at age 65.

While it is possible for you to receive a retirement pension under the QPP at age 60, applying later may be to your advantage for several reasons. If you apply for your retirement pension at age 60, the amount will be lower than if you postpone applying until age 65. And if you apply between ages 65 and 70, the amount will be even higher.

At age 65, the retirement pension is equal to 25% of the earnings on which you contributed throughout your career. Within the next 40 years, the income replacement rate will increase from 25% to 33%. For future retirees, it is reassuring to know that coverage will be more significant in the future.

Remember that the longer you wait before applying for your pension, the higher your benefits will be for the entire duration of the payments. Your pension will be indexed based on the cost of living. If you have other sources of income, it may be beneficial to postpone applying.

With extras

It is good to have basic income for your retirement, it is even better when you can add your personal touch and have a retirement income that allows you to maintain your standards of living.

Workplace pension plans and personal savings round out the income provided by public plans.

For most Quebeckers, the income provided by workplace pension plans is necessary to maintain their standard of living in retirement.

If you are a member of a workplace pension plan, be sure to learn all about it. You will need that information to start planning for retirement.

Workplace plans include:

supplemental pension plans (SPPs)
voluntary retirement savings plans (VRSPs)
group registered retirement savings plans (group RRSPs)
group tax-free savings accounts (group TFSAs)
deferred profit-sharing plans (DPSPs)
public-sector pension plans (PSPPs).

For more information, consult our Workplace pension plans section.

Whether you invest in real estate, in a tax-free savings account (TFSA) or a registered retirement savings plan (RRSP), your investments must be sufficient for you to maintain your standard of living once you retire.

There are two main types of investments: registered investments and unregistered investments.

Registered investments

These investments offer tax advantages. RRSPs, for example, enable you to reduce your taxable income and lower your tax bill today. TFSAs, on the other hand, allows you to grow your investments tax-free.

Unregistered investments

These include all amounts not held in a tax-sheltered account. They are taxable. Bank accounts and equities are some examples.

For more information, consult our Choose your savings vehicles section.

Planning your retirement

Retirement is a life project that everyone must think about. To carry out your project, you must follow 5 steps.

Determine your sources of retirement income

Find the best way to leave the labour market

Do the math

Consult a financial planner

Choose your savings vehicles

For additional information on each of those steps, consult the Planning your retirement section.

Our planning tools

Calculate your saving needs for your retirement with SimulR

Almost 3 out of every 4 Canadians have never calculated the amount of savings they need for retirement. Don't be one of them! Simulate your retirement income with our simplified tool to find out in just a few clicks how much you need to save each week to make your retirement dreams come true.

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