You may hear these called the “three pillars” of Canada’s retirement income system : government-administered plans, employment-based pension plans, and personal retirement savings plans.

Pillar 1: publicly-funded plans administered by the government

There are publicly-funded plans administered by the government that you may be eligible for when you retire. These plans include the Canada Pension Plan, the Old Age Security Program and the Guaranteed Income Supplement Program.

Canada Pension Plan (CPP) or Québec Pension Plan (QPP)

The Canada Pension Plan (CPP) and Québec Pension Plan (QPP) provide monthly payments to people who contributed to the plans during their working years. The amount you'll get every month depends on how long you contributed to the plan and how much you contributed. It also depends on the age when you start receiving your CPP or QPP retirement pension.

You can choose to take your CPP or QPP as early as age 60 or as late as age 70. The earlier you take your CPP or QPP, the lower your monthly payments will be. The later you take your CPP or QPP, the higher your monthly payments will be.

Old Age Security (OAS) pension

The Old Age Security (OAS) pension is a monthly benefit for Canadians who are 65 or older. You can get OAS benefits even if you're still working or have never worked.

You don’t need to contribute to the OAS pension in order to benefit from it. You can start to receive OAS at age 65 or choose to defer for up to 5 years. For every month you delay receiving your OAS pension, the higher the monthly payment will be.

You’ll typically be eligible for the OAS pension if you are a Canadian citizen or legal resident and have lived in Canada for at least 10 years. The amount you will get from the OAS pension depends on how long you lived in Canada after the age of 18. You will typically be eligible for the maximum amount if you lived in Canada for 40 years or more.

You may be selected for auto enrolment in the OAS pension. This means that you won’t have to apply to start receiving your OAS pension. You will receive a letter a month after you turn 64 years old telling you if you are chosen for auto enrolment in the OAS pension. You can still defer receiving your OAS pension if you are eligible for auto enrolment.

If you don’t get a letter telling you that you are eliglble for auto enrolment then you will have to apply for the OAS in writing by completing and mailing in the application form.

Guaranteed Income Supplement (GIS)

The Guaranteed Income Supplement (GIS) provides a monthly non-taxable benefit to Old Age Security (OAS) pension recipients who have a low income and are living in Canada. You need to file your income tax return every year to be eligible for the GIS, even if you don’t expect to have to pay extra taxes.

If you were automatically enrolled for the OAS pension then you will automatically be considered for the GIS as long as you file your income tax return each year.

If you were not automatically enrolled in the OAS pension then you will need to apply for the GIS in writing.

Pillar 2: Employment-based pension plans

Your employer may sponsor a retirement plan, such as a group Registered Retirement Savings Plan (RRSP) or a registered pension plan (RPP). These are both registered plans that provide you with a source of income during your retirement.

Under these plans, you and your employer (or just your employer) regularly contribute money to the plan. When you retire you may be eligible to receive either a regular income from the plan or a lump sum of money that you can convert into an income.

Pillar 3: Personal retirement savings

Two common sources of personal retirement income are Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs). RRSPs and TFSAs can be made up of various savings or investment products.

You may also receive income from non-registered sources, such as personal investments like stocks and bonds, or personal savings accounts.