How Much Do I Need To Save?

Putting it all together your company pension is just one part of your retirement income. You can also plan to use money coming from a RRSP(s), other personal savings and investments. And don't forget your government pension plans.

• Old Age Security
• Canada Pension Plan

To see the bigger picture, start by finding out:

What income you will need to support the kind of lifestyle you'd like when you retire?

A common rule of thumb is that you'll need about 70% of what you make today.

What income will your pension provide when you retire?

Your annual pension statement may give you an up-to-date number.

What income will you have from government pensions?

How does that income work with your pension and other savings and investments you might have?

It's a good idea to review these numbers from time to time. Early in the year is a perfect time to make sure you're on track. You may want to contribute to an RRSP and when you make your contribution in the first 60 days of any year, you can count it towards your tax return for the previous year.

Remember: it takes careful planning to make sure you have enough income for your retirement. Things often change over time. Your money may not grow as fast as you thought it would. How much money you make may go up or down. Or, the cost of living could take you by surprise. You don't want to find out at age 50 that you won't have what you need to meet your retirement goals.

About Your Government Pensions

Old Age Security (OAS)

OAS provides a monthly retirement payment based on your age and the amount of time you've lived in Canada. It's available to all Canadian residents 65 and older - even if you're officially retired. You can continue to work and still receive OAS.

Benefits include:

The basic OAS pension: You have to apply to receive this pension. It's not based on your income - but if you're a higher earner, you may not qualify to receive the full amount. Your pension is adjusted every three months to keep up with inflation.

The Guaranteed Income Supplement (GIS): This additional monthly payment is tax-free. It goes to residents of Canada who qualify for OAS but have little or no other income. If you are 65 or older and your retirement income is low enough, you may qualify. You are required to re-apply for your GIS supplement every year.

Canada/Quebec Pension Plan (CPP/QPP)

CPP and QPP are Canada's major pension plans. The CPP operates throughout Canada, except for Quebec. Quebec has the QPP, a similar program.

Here's how it works. You have to contribute to this plan during your working years. It in turn will provide regular income to you when you retire. What you receive will be based on the number of years you've worked and how much you made during that time. CPP/QPP is also adjusted to keep pace with the rising cost of living.

You must apply to receive your payments from CPP. The plan officially kicks in at age 65. But, you can apply to receive your pension as early as your 60th birthday or as late as age 70. And, you may qualify to receive other benefits, such as disability payments and survivor benefits.