Your retirement income pie: CPP is just 1 slice

By Susan Yellin

Government pension payments are rising, but they probably still won’t provide all the income you’ll need in retirement. So how will you fill the gap?

The Canada Pension Plan will begin phasing in contribution and payout increases in 2018, but the full benefit of those increases won’t be felt for decades. In the meantime, what does the average senior’s income look like?

According to these figures from Statistics Canada, senior families (those whose highest income-earner is age 65 or over) saw their median after-tax income steadily rise by 66.7% from 1976 to 2014, to $54,000. (Note that Statistics Canada is using constant 2014 dollars to factor in inflation and allow comparison across time in real terms.) Between 1976 and 1995, most of those gains came from increases in government transfers, including Canada Pension Plan (CPP), Old Age Security (OAS) and Guaranteed Income Supplement (GIS). But since 1995, it’s the stock market, not government programs, that has been the main source of income gains for senior families.

Filling the CPP gap
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