Apr. 6: BEST OF THE BLOGOSPHERE

April 6, 2026

Six ways to augment the modest retirement benefits Canada provides

Writing for Money Canada, Vawn Himmelsbach warns that federal government retirement benefits alone don’t provide much income.

“Canada Pension Plan (CPP) and Old Age Security (OAS) provide an important base for retirement income — but for many Canadians, they won’t provide enough support on their own,” she warns.

It’s apparent, her article continues, that most of us are assuming CPP and OAS will allow us to live adequately post-retirement, since a recent Canada Pension Plan Investment Board survey found “that the majority of adults (73 per cent) expect to or already rely on government benefits to cover their basic retirement income.”

But she continues, CPP and OAS “were never intended to fully replace your earnings while in the workforce but rather supplement it. Most retirees need additional sources of cash flow to maintain their lifestyle — and to protect themselves if one income stream falls short.”

Even if you are getting both, the income they provide (CPP maximum is $1,507.65 and full OAS is $742.31, with most people getting less than the full amount), the amounts “often fall well below what most retirees actually spend on basic expenses each month. Housing, food, transportation and healthcare costs can quickly exceed government benefit payments — especially for those who rent, carry debt or live in higher-cost areas,” she explains.

Himmelsbach then turns to six ways you can add income to that modest CPP/OAS base.

Having a workplace pension is an excellent starting position, she notes.

“If you’re one of the 48 per cent of Canadians that has a workplace pension, it can form a strong foundation to your retirement income,” she writes. However, workplace pensions, she adds, are “becoming less common outside the public sector.”

That brings us to the second category – personal savings.

“For many Canadians, personal savings do most of the heavy lifting in retirement. That usually means drawing income from a Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA) or both,” she reports.

RRSPs, she explains, “offer tax-deferral while you’re working, but withdrawals in retirement are taxable. That can make timing and withdrawal strategy especially important, particularly once RRSPs are converted to Registered Retirement Income Funds (RRIFs) and minimum withdrawals begin.”

“TFSAs work differently,” she adds. “Withdrawals are tax-free and don’t affect government benefits like CPP and OAS.”

Another way to save, she writes, is via Guaranteed Investment Certificates (GICs) and High Interest Savings Accounts (HISAs).

“GICs offer a guaranteed return over a fixed period, which can make them useful for planning specific expenses or building short-term income. The trade-off is access: Your money is typically locked in until the GIC’s maturity date, unless you choose a cashable option,” she explains.

“HISAs offer more flexibility. While returns may be lower than long-term investments, they allow retirees to access funds quickly, without worrying about market swings,” she notes.

There’s another category worth considering – dividend-paying investments, she continues.

“Dividend-paying investments can provide a steady income stream on top of potential growth in the long run. For retirees, that regular cash flow can help reduce the need to sell long-term investments to cover everyday expenses,” she reports. “Dividends from eligible Canadian corporations also receive favourable tax treatment through the dividend tax credit when they’re held in a non-registered account, which some retirees might find more appealing over interest income.”

Another way to augment monthly government retirement benefit income is by converting some of your savings to an annuity, Himmelsbach suggests.

“Annuities can provide something many retirees value: certainty. In exchange for a lump sum, an annuity pays out a guaranteed income stream, often for life. That predictability can make budgeting in retirement much easier,” she writes, adding that “some retirees use them to cover essential expenses — like housing, food and utilities — so those costs are always met, regardless of market conditions.”

Her final suggestion is real estate income.

“Becoming a landlord can provide steady rental income, but it also means dealing with maintenance, vacancies, taxes and tenant issues,” she states.

“Owning rental property can also tie up a large amount of capital. Carrying costs, repairs and property taxes don’t stop just because you’re retired. And income isn’t always predictable — especially during economic slowdowns,” she adds.

She concludes this informative piece by underscoring the idea that you will need multiple income streams in retirement.

“The goal isn’t to chase returns, but to assemble a mix of income streams that can support your lifestyle, manage risk and last throughout your sunset years. As with any major financial decision, it’s always in your best interest to consult a financial professional to help you reach your goals,” she states.

Did you know that members of the Saskatchewan Pension Plan can convert some or all of their accounts to a lifetime annuity – an option that carries no cost or monthly fee?

No matter which type of SPP annuity you choose (they are all detailed here in the Pension Guide), you will receive a monthly payment for life. Some options provide benefits for qualifying survivors too – the choice is yours.

See how SPP is helping deliver retirement security for Canadians – check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Money Canada

---

---