Exploring Your Sources of Income in Retirement: CPP, OAS, and Beyond

Retirement planning isn’t just about how much you’ve saved — it’s also about where your income will come from when your paycheques stop.

For Canadians, your retirement income often comes from three main pillars: Canada Pension Plan (CPP), Old Age Security (OAS), and personal savings/investments. Understanding how each works — and how to make the most of them — can mean the difference between a comfortable retirement and one that feels financially strained.

Let’s explore each source, plus strategies to maximize your income.

1. Canada Pension Plan (CPP)

The CPP is one of Canada’s primary retirement income programs, providing monthly payments to those who contributed during their working years.

Key points:

  • The amount you receive depends on how much and how long you contributed.

  • You can start as early as age 60, but the earlier you start, the smaller your monthly payment.

  • If you wait until age 70, your monthly payment could be up to 42% higher than if you started at 65.

How to maximize your CPP:

  • Delay starting CPP if you’re in good health and don’t need the income right away.

  • If you had gaps in your career or lower contributions, look at ways to boost your other retirement income streams to fill any shortfall.

2. Old Age Security (OAS)

OAS is a government benefit available to Canadians 65 and older, regardless of work history or CPP contributions.

Key points:

  • The amount you receive depends on how long you’ve lived in Canada after age 18.

  • OAS is income-tested — higher-income retirees may have part or all of their OAS “clawed back.”

  • You can choose to delay OAS until age 70 to increase your monthly benefit.

How to maximize your OAS:

  • Keep track of your annual income to avoid unexpected reductions.

  • If you can, delay taking OAS for a bigger monthly amount — this is especially valuable if you expect to live well into your 80s or 90s.

3. Personal Savings & Investments

While CPP and OAS are important, most Canadians need additional income sources to maintain their desired lifestyle. This is where your RRSPs, TFSAs, pensions, and other investments come in.

How to maximize your personal savings:

  • Withdraw strategically — consider taking TFSA funds first to keep RRSP money growing tax-deferred.

  • Keep your portfolio diversified — mix of stocks, bonds, and other assets to balance growth and stability.

  • Review your withdrawal plan annually to adapt to changing markets, tax rules, and personal needs.

The Bottom Line

The more you understand about CPP, OAS, and personal savings, the better you can plan your retirement income. A thoughtful strategy can help you pay less tax, maximize benefits, and keep your lifestyle secure for decades.

Talk to a financial planner who can help coordinate all your income sources into a clear, tax-efficient plan that supports the retirement you’ve envisioned.

Mike Gomes, CFP