The best retirement income sources for Canadians

There are a lot of different ways to plan for retirement, and the best approach depends on your individual circumstances. But there are some basic principles that apply to most people. Here are the best retirement income sources for Canadians:

  1. Government benefits. The Canadian government provides several benefits that can help supplement your retirement income, including Canada Pension Plan (CPP) and Old Age Security (OAS).
  2. Employer pension: If you have a defined benefit or defined contribution pension plan through your employer, that will be a key source of retirement income.
  3. Registered Retirement Savings Plans (RRSPs): RRSPs are a great way to save for retirement, and the money you put in is tax-deductible. You can withdraw from your RRSP at any time, but you will pay taxes on the money you take out.
  4. Tax-free Savings Account (TFSA): TFSA’s are very tax-effective and you do not pay tax on any money you take out.
  5. Registered Retirement Income Funds (RRIFs): A RRIF is similar to an RRSP, but you must start withdrawing from it at age 71. The money you take out of a RRIF is taxable.
  6. Personal savings: This can include any savings you have outside of an RRSP or TFSA or a pension plan, such as in a savings account, GIC, or mutual fund.
  7. Work income: Many people choose to work part-time or full-time in retirement. This can provide a significant boost to your retirement income.
  8. Reverse mortgages: A reverse mortgage is a loan that allows you to tap into the equity in your home. The money you borrow does not have to be repaid until the home is sold.
  9. Home equity lines of credit (HELOCs): A HELOC is a revolving line of credit that is secured by your home equity. The interest you pay on a HELOC is often tax-deductible.
  10. Life insurance: If you have a life insurance policy with cash value, you can borrow against the policy or cash it in.
  11. Annuities: An annuity is a contract between you and an insurance company. You make a lump sum payment, and in return, the company agrees to make periodic payments to you for a specified period of time.

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Always seek advice from your financial planner. If you are a member of one of the BC Public Sector Pensions plans, you can see what the Pension Corporation says about your situation. Their pages provide a detailed summary of your options.