June 2021 – 15 min read

Almost two thirds of Canadians don’t belong to a workplace pension plan, so if you’re part of the fortunate minority who do, be sure you’re making the most of it. This means that if you have a defined contribution pension plan – where your employer matches your contributions to a certain point – you should do your best to maximize this. Don’t leave this “free money” on the table.

As you near retirement, you should also be thinking about how your pension income will work with your other sources of income – like government benefits and personal savings – and working with a financial advisor to create a sustainable plan for making these resources last.

While the standard retirement age is 65, most pensions give you the opportunity to retire earlier. This may mean you’ll receive a smaller cheque each month – but you’ll have more time to pursue your retirement dreams when you’re younger.

On the flip side, delaying your retirement may allow you to continue working for longer, building up your savings further. Delaying taking your pension to 69, for example, could mean you’ll receive more each month than someone who takes it at 60. The con, however, is that the future is uncertain, and you may not live long enough (or be in good enough health) to enjoy the retirement you’ve been putting off.

Your pension is fully taxable as income when you receive it, so factor that into your budgeting.

...don’t panic! While a workplace pension is great asset if you have one, it’s still possible to have a sustainable plan for your retirement income without one. Work with your financial advisor to make sure you’re making the most of the resources you do have, like your personal savings and investments, or government retirement income.