Many times questions arise as to when CPP and OAS should be applied for as individuals approach retirement. How much CPP are you entitled to and when should you take it? It is important to note that CPP and OAS should make up only a portion of your retirement planning to supplement your retirement income. The rest should come from your RRSPs and your pension plans.
According to the Department of Finance, the following make up the sources of Canadian Retirement Income:
- 28% – CPP/QPP
- 28% – OAS & GIS
- 44% – RRSPs and Pension Plans
What is the Canada Pension Plan (CPP)?
The CPP is a federal program that provides pensions to qualified contributors in retirement. Any benefits paid by the CPP are taxable both federally and provincially. CPP operates throughout Canada. Quebec has its own similar but not identical program, the Quebec Pension Plan (QPP), which is closely associated with the CPP.