As we near retirement age, the thought of receiving pension payments may be both exciting and overwhelming. Many Canadians are unsure of how pensions work and the steps they need to take in order to receive them. In this article, we will break down the basics of pension payments in Canada to help you gain a better understanding of this important aspect of retirement planning.
The first thing to know is that there are two main types of pension plans in Canada: the Canada Pension Plan (CPP) and the Old Age Security (OAS) program. The CPP is a pension plan funded by contributions from employees and employers, while the OAS is a government-funded retirement program for Canadians aged 65 and older. In order to receive pension payments from these plans, you must meet certain eligibility requirements and have contributed enough through your working years. It’s important to note that these pensions may not be enough to sustain your desired lifestyle in retirement, so it’s recommended to also have other sources of income, such as personal savings or investments.
Another important concept to understand is the different options for receiving pension payments. You can choose to receive a full pension at the age of 65, or you can delay receiving payments until the age of 70 to receive a higher amount. Alternatively, you can choose to receive a reduced pension as early as age 60. It’s important to carefully consider your