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PensionPlainly

How it works

The income timeline estimates your retirement income from the numbers you enter and the published rules for CPP, QPP, OAS and income tax. This page explains where those rules come from, how the timeline uses them and what it leaves out, so you can check a result for yourself.

Where the rules come from

Each rule is read from the government page that publishes it.

OAS amounts change every quarter, and CPP, QPP and tax tables every January. The dates above show when each was last checked.

How the timeline uses them

Your workplace pension

The timeline starts from the amount on your pension statement, or the amounts your plan quoted for different ages. If you retire before your plan's unreduced date, the pension is reduced by the rate you enter. It then rises each year by your plan's indexing, if it has any. A bridge benefit is paid until the age your plan stops it, usually 65.

CPP and QPP

The timeline starts from your estimate at 65. CPP is 0.6% lower for each month it starts before 65, and 0.7% higher for each month after, up to 70. QPP is 0.5% to 0.6% lower for each month before 65, depending on the size of the pension, and 0.7% higher for each month after, up to 72.

OAS

OAS starts at 65 at the current quarter's amount, and is 0.6% higher for each month you delay it, up to 70. It rises 10% at 75. With fewer than 40 years in Canada after age 18, it is a share of the full amount. When the timeline shows income after tax, OAS is repaid at 15% of income over the yearly threshold.

Savings

Each savings account earns the return you set, and is withdrawn in equal amounts until it runs out. The amounts are equal in today's dollars, so they rise with prices. An RRSP, DC pension or LIRA becomes a RRIF or LIF at 71, and from 72 pays at least the minimum the law sets, even where that is more than the equal amount. Registered savings are taxed as income, and TFSA withdrawals are tax-free.

Tax

Income after tax is a rough estimate for one person: federal and provincial or territorial tax at this year's rates, with the basic, age and pension income credits. In Ontario it includes the surtax and the health premium, and in Quebec the contribution to the health services fund. In British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island it takes off the province's tax reduction for low incomes. Pay from work has CPP or QPP and EI taken from it, with the credits they earn. The same rates are used for every year, since they rise with prices. The pension income amount is the exception where it is a set number of dollars, as it is federally and in most provinces, so it is worth less as prices rise.

Today's dollars

Amounts are shown in today's dollars unless you switch to future dollars. Prices rise 2% a year unless you change it. The timeline runs to age 95. That is not a forecast of how long you will live.

What it leaves out

  • The Guaranteed Income Supplement and other benefits that depend on income
  • Pension income splitting and other tax savings for couples
  • Quebec's prescription drug insurance premium and low-income tax reductions
  • The most you can take out of a LIF each year
  • Extra CPP or QPP from working after it starts

Your results list every assumption they rest on, beside the numbers. For your own pension amount, your plan's statement is the best source. For CPP, your My Service Canada Account has your own estimate.

If something looks wrong

Corrections are welcome. See the contact page for how to send one.