Guide to Financial Planning for Retirement
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Guide to Financial Planning for Retirement 2020.2021
2
Guide to
Financial Planning Useful
for Retirement Information
This guide provides information and advice
PRODUCTION HOW TO CONTACT US
ÉducÉpargne Visit our Web site: to help you come up with a solid retirement plan
educepargne.ca that meets your objectives.
GRAPHIC DESIGN To order additional copies
Bleuoutremer Throughout this guide, we stress financial
of the Guide to Financial
Planning for Retirement: planning for retirement for individuals, not couples.
PARTICIPANTS IN download a copy Once you set your personal objectives, you can
THE UPDATE OF THE or order a copy integrate them with those of your spouse. Spousal
2020-2021 EDITION
from our web site; RRSP contributions are an example of this.
Johanne Bastarache
(Retraite Québec) To contact ÉducÉpargne
by mail:
Hélène Berger
(Institut québécois de
planification financière) ÉducÉpargne
1370 Notre-Dame St. West
Renaud Bourget Montréal (Québec) H3C 1K8
(Retraite Québec)
Mario Charron
(Fondaction)
Philippe Grégoire
(Chaire iA Groupe Financier en
assurance et services
Why do you have to
financiers)
Simon Houle
(Regroupement des jeunes
chambres de commerce du
Québec) think about your
Maryse Gagnon Ouellet
(Retraite Québec) retirement today?
Sylvie McKay
(ÉducÉpargne) 1. Time plays in your favour. The sooner you start
Julien Michaud saving, the more time your retirement capital
(Autorité des marchés will have to grow. In an RRSP or TSFA, the effect
financiers)
can be quite remarkable.
Louis Neamtan-Lapalme
(Fonds de solidarité FTQ) 2. Fluctuating income can have a big impact
on your retirement income. That’s why it’s
so important to protect yourself by starting
Legal Deposit — Bibliothèque © Régie des rentes to save early and regularly. Don’t forget!
nationale du Québec, 2020 du Québec, 2003
Legal Deposit — Bibliothèque ©Q
uestion Retraite,
nationale du Canada, 2020 2005 to 2019
ISBN : 978-2-924692-28-8 (print) © ÉducÉpargne,
978-2-924692-29-5 (PDF) 2020
(17th edition — 2020)
Information contained
in the 2020-2021 Guide
is valid as of June 2020.
3
How Much
Should I Set
Aside Each Year? Useful
Information
p. 2
A simple method Budget
with just five steps. Table
p. 31
A Word
About Inflation
p. 40
1 4
Determine the Determine How
A Word About
Sources of Income Much You Should Investments
You Can Rely On Save Each Year p. 41
p. 4 p. 26
Resources
p. 43
Test Your
Knowledge!
2 5
p. 44
Determine Your Take
Retirement Age Action Glossary
p. 18 p. 36 p. 45
3
Set Your A glossary
Retirement Goals at your
p. 22 fingertips
For your convenience,
a glossary is provided
at the end of the Guide.
The glossary includes
definitions of various words
and phrases used in the
world of finance that can
seem complicated. When
in doubt, check it out!
4 / Section 1
1
Determine
the Sources
of Income
You Can Rely On 2
Remember
To calculate how much you should save each year, you should start 1. The first step in planning for
by finding out about the sources of retirement income you could have. retirement is knowing your
sources of income.
2. Saving for retirement is like building
a house: the base is provided by our
governments, but you have to think
to accumulate personal savings
to build the walls and the roof if you
want to be safe from the unforeseen.
5
You can defer the start of payment of the OAS pension for up
to five years. The amount of your pension will increase by 0.6%
for each month you defer payment, up to a maximum of 36%
3
(60 months).
Before you decide to defer payment of your OAS pension, be
Private pension plans sure to consider your situation. You will not be eligible for the
and personal savings
GIS and your spouse will not be entitled to the Allowance while
you defer the start of payment of your OAS pension.
2
Québec
1.2 The Guaranteed Income Supplement (GIS)
You must be receiving an OAS pension to apply for the GIS.
It is a monthly benefit offered to individuals living in Canada
Pension Plan
who have a low income. The GIS is calculated based on income
and civil status. This tax-free benefit is indexed to the cost
1
of living four times a year.
1.3 The Allowance
Federal Old Age If you are married or have a de facto spouse, you can apply
Security Program (OAS)
for the Allowance if your spouse is receiving an OAS pension
and your combined annual family income does not exceed
a certain amount. The Allowance is calculated based on
1. The federal income and currently can be paid monthly from age 60 until
your 65th birthday. This tax-free benefit is indexed to the cost
Old Age Security
of living four times a year.
program (OAS)
This program provides three types of benefits: the OAS pension,
the Guaranteed Income Supplement (GIS) and the Allowance.
They are described below.
1.1 The Old Age Security pension If you lived outside Canada...
The pension is paid monthly and is indexed to the cost of living
If, after age 18, you have lived in Canada for more
four times a year. The pension is taxable income.
than 10 years but less than 40 years, your OAS pension
Eligibility requirements: will be reduced. However, other conditions can entitle
you to obtain a full pension. Find out how! For more
Be at least 65 years old; information, see Service Canada’s Web site
Have a legal status in Canada; at servicecanada.gc.ca.
ave resided in Canada for at least 10 years
H
after the age of 18.
Table 1 - Old Age Security program (July to September 2020)
Maximum monthly Maximum annual
Type of benefit income Beneficiaries payment* familyincome
Old Age Security pension All beneficiaries $613.53 See note*
Guaranteed Income Supplement Single person $916.38 $18,600
Spouse of pensioner $551.63 $24,576
Spouse of non-pensioner $916.38 $44,952
Spouse of Allowance recipient $551.63 $44,592
Allowance All beneficiaries $1,165.12 $34,416
Allowance for the survivor All beneficiaries $1,388.92 $25,056
* The maximum monthly payment includes the additional enhancements to the GIS and the allowances. The amount is indexed according to inflation four times a year, in
January, April, July and October. Note: Pensioners whose net personal income is over $79,054 in 2020 must repay a portion or all of the OAS. The amount of the refund will
normally be deducted from their monthly benefits before they are paid. The full OAS pension is recovered if a pensioner’s net income is at least $128,137 in 2020.
6 / Section 1
2. The Québec
Pension Plan
The Québec Pension Plan (QPP) provides workers and their Chart 2 - Contribution
families with basic financial protection in the event of
retirement, death or disability. Since January 1, 2019, it consist
$328
For the portion of the salary between
4%
of two plans: $58,700 and $66,900
The base plan;
$552
1.0%
The additional plan.
0.30%
$161
For the portion of the salary between
The base plan currently replaces about 25% of the income $3,500 and $58,700
on which you have contributed if you apply to receive
$2,981
$2,981
your pension at age 65. 1%
5.4%
5.4%
The addition of an additional plan to the Québec Pension
Plan provide more generous coverage for all current workers, 1.0%
0.75%
0.50%
but it goes without saying that new contributions will have 0.15% 0.30%
to be deducted from your salary and paid into the new 2019 2020 2021 2022 2023 2024 2025
contributions will have to be deducted from your salary
and paid into the new plan.
Thus, to finance the income replacement rate, which will Base plan Additional plan
gradually increase from 25% to 33.33%, there will be a 1% long-
term increase in the contribution rate of employees on the 2020 2025
eligible salary range of $3,500 to $57,400.
In addition, for those earning more than the Maximum
Pensionable Earnings (MPE), a new 4% contribution will be
Chart 1 - Replacing income levied from 2024 on the portion that exceeds the MPE to the
new cap of $62,800 in 2024. Starting in 2025, this new cap will
still be set equal to 114% of the MPE, or $66,900. This additional
contribution will allow to fund an income replacement rate
of 33.33% of the MPE to the new cap.
Other
Other
25 % 27 % 31 % 33,33 %
OAS OAS
2019 2033 2048 2065
7
Eligibility requirements Table 2 -
To be eligible for a retirement pension, you must: QPP retirement
Be at least 60 years of age; pension
Have sufficiently contributed to the QPP.
You apply for your Maximum monthly
Amount of the retirement pension pension at… pension in 2020*
The amount of your pension will depend on the age at which
Age 60 $753.47
you apply for it, the number of years you contributed
to the QPP and the employment earnings on which you made Age 65 $1,177.30
contributions.
Age 70 or over $1,671.77
Retiring before age 65
Currently, if you retire before age 65, your pension is reduced * These amounts apply if you are receiving the maximum pension.
for each month between the date you applied for your pension
and the date of your 65th birthday. The adjustment factor
varies depending on the amount of your pension. It will be close
to 0.5% if your pension is low, and it will gradually increase
to 0.6% if you receive the maximum pension.
Retiring at age 65
The “normal” retirement age is 65. This means that your pension
will not be reduced or increased if you start receiving it at
age 65.
Retiring after age 65
If you apply for your pension after age 65, it is increased by 0.7%
for each month between the date of your 65th birthday and
Important!
Very few people receive
the date of your retirement, up to 70 years of age.
the maximum pension
In 2019, only 2.9% of new retirees received the maximum
pension, whether a “regular” pension at age 65, an early
retirement pension between age 60 and 64, or a pension
applied for after age 65. The average pension was $524
a month for all retirees.
The amount is set based on various factors:
Note that… The age at which you retire;
The number of years you contributed to the Plan;
Contributions to the Québec Pension
T
he employment earnings.
Plan are shared equally between
the employee and the employer. A retirement pension under the QPP is taxable and
Self-employed workers assume indexed to the cost of living in January of each year.
both parts.
8 / Section 1
The statement
of participation:
an effective
planning tool
If you would like to know what
the amount of your pension will Québec Pension Plan
be when you retire at age 60
or 65, consult your Statement
Statement of Participation
of Participation. It is a good
source of information. Date of issue: 11 May 2020
Client number: 000 0000 0000
Date of birth: 22 March 1981
The statement of participation
shows all of the employment
income on which you have You can consult your statement at any
time via the My Account online service at
made contributions during your www.retraitequebec.gouv.qc.ca.
life and provides an estimate
of the benefits you could receive
The Québec Pension Plan is a compulsory public insurance plan. It provides basic financial protection in the event
in retirement. You can view of retirement, disability or death. This statement provides an estimate of the benefits that you and your family could
it online or request a copy receive.
In January 2019, a gradual enhancement of the Plan was implemented to offer contributors increased financial
by telephone. security upon retirement. The estimate of benefits shown on our statements does not currently take into account
the enhanced Plan. However, for an estimate of your retirement income that takes into account the enhancement,
you can use the SimulR and CompuPension tools available on our website. For further details on the Plan
enhancement, visit our website.
When you retire
Once you turn 60, a retirement pension can be paid at the age you choose. The amount varies according to:
• your age when you retire;
• your years of contribution;
• the employment earnings recorded under your name (see next page).
Estimate of the amount of your retirement pension (monthly)
This is an estimate of the amount of the
pension you could receive at the age indicated
239 $ 312 $ if, as of today, you do not make any more
S
If you stopped
making contributions T contributions to the Plan. This could be
Age 60 Age 65 because you stop working or because your
today
Age at retirement employment earnings no longer exceed
3 500 $ a year until you retire.
This is an estimate of the amount of the
If you continue to 673 $ pension you could receive at the age indicated
S make contributions
455 $ T if you continue making contributions to the
Plan on earnings that are similar to your
Age 60 Age 65 earnings in the last few years.
Age at retirement
Statement of Participation in the Québec Pension Plan Page 1 of 4
9
To consult your statement,
use the My account online
service on Retraite Québec’s
Web site. It’s free!
If you worked in another Canadian
province or territory, your earnings
Your benefits are calculated using the pensionable earnings
were recorded under the Canada
recorded in your file.
Pension Plan. These earnings
are taken into account in the
The information concerning your employment earnings is
provided by Revenu Québec. Pensionable earnings calculation of your pension under
Pensionable
Your pensionable earnings are shown in the table at
Year
employment earnings
Note the Québec Pension Plan.
right. For years in which partition was carried out, they 2019 - A
correspond to the earnings that were partitioned 2018
2017
32 000 $
31 000 $ Are the figures for the last few
between you and your former spouse. 2016 30 000 $
2015 29 000 $ years different from the ones you
For years in which partition was not carried out, they 2014 28 000 $
correspond, in general, to one of the following: 2013 27 000 $ have? This may very well be the
2012 25 391 $
• Your actual employment earnings, if they were 2011 23 702 $ case. When Retraite Québec
2010 24 248 $
between the minimum required in order to 2009 12 906 $ prepared your statement, it might
contribute to the Québec Pension Plan (3 500 $ in 2008 14 310 $
2020) or the maximum on which contributions 2007 14 987 $ not have received the most recent
could be made (58 700 $ in 2020); 2006 5 574 $
2005 15 662 $ data from Revenu Québec yet.
2004 31 178 $
• Earnings that are less than your actual 2003 30 859 $
employment earnings, if you make more than the 2002 33 273 $
maximum on which contributions could be made. 2001 29 865 $
For example, if you earn more than 58 700 $ in 2000 25 356 $
1999* 18 650 $
2020, pensionable employment earnings of
58 700 $ will be entered in your file.
Double-check the earnings - and your date of birth on
the first page - in order to receive the amounts to which
you are entitled. To notify us of an error, call the
telephone number in the "How to reach us" section.
Note
A Revenu Québec will send us the information
concerning any earnings for this year at a later date.
Therefore, you do not have to provide us with that
information.
* The years recorded begin at age 18.
Statement of Participation in the Québec Pension Plan Page 2 of 4
10 / Section 1
Good
to know
Applying for
your Québec
Pension Plan
You must apply to receive your pension. You can apply up to
Phased retirement, full pension
one year in advance. You can file your application:
If you are an employee between 55 and 70 years of age,
Online by visiting Retraite Québec’s Web site; phased retirement allows you to reduce your hours of work and
continue to contribute to the QPP as though you were earning
By completing the form available on Retraite Québec’s
the same salary. The amount of your future retirement pension
Web site or from Services Québec;
will therefore not be reduced. However, you must reach
By telephone. an agreement with your employer, known as an agreement
concerning Québec Pension Plan contributions and phased
retirement.
Disability and death
Retraite Québec pays benefits in the event of disability or death.
For more information, consult Retraite Québec’s Web site
at retraitequebec.gouv.qc.ca.
If you worked abroad
Retraite Québec has social security agreements for persons
working abroad in about 40 countries. For more information,
consult Retraite Québec’s Web site.11
3. Pension
plans offered
by employers
Private pension plans provide employees with a retirement
income that complements income provided by public plans.
There are various types of private plans, each with its own
characteristics. This is why it is so important to learn about your
plan before you begin your financial planning for retirement. The statement
Four types of plans
There are four main types of plans. Can you recognize yours?
of benefits:
3.1 Supplemental Pension Plan
A Supplemental Pension Plan (SPP), also called a “pension
another effective
fund”, is a plan into which an employer pays contributions
on behalf of employees to provide income for their retirement.
planning tool
Employees can also make contributions, depending on the Members of most plans receive a statement of benefits
terms of the plan. Amounts must be paid into a pension fund at least once a year. This document is important, so keep
that is not connected to the employer. it in a safe place! It indicates the amount of contributions
There are two types of Supplemental Pension Plans: you have made and any interest accrued. If your SPP
is a defined contribution plan, the statement will also
1. Defined benefit plan indicate the amount your employer has contributed
Under such a plan, your pension is set in advance using to your account, with accrued interest. If your plan
a specific formula. It is generally a percentage of your is a defined benefit plan, the statement will indicate the
pensionable earnings multiplied by your years of recognized amount of the pension you have accumulated. Like the
service. Contributions are adjusted periodically to fund the QPP Statement of Participation, the statement of benefits
benefits promised. If your pension is harmonized with the QPP from your SPP will allow you to calculate the income you
(see the section on harmonization), it will typically decrease will have in retirement more precisely.
at age 65 to take into account the QPP pension you will receive.
The pension may be indexed to compensate in whole or in part
for inflation, or it may not be indexed at all.
2. Defined contribution plan
In this type of plan, your and your employer’s contributions
are determined in advance. However, your retirement income
is not known in advance since it will depend on the investment
income accumulated in your account, the interest rate in effect
when you purchase a life annuity or the interest rates for
withdrawals from a life income fund (LIF).
Harmonization
A Simplified Pension Plan (SIPP) is a defined contribution
plan administered by a financial institution that allows you,
as a member, to choose your investments depending
on your investor profile. A Supplemental Pension Plan (SPP) is harmonized with
the Québec Pension Plan when your SPP pension is
reduced at age 65 because you are receiving your
pension under the QPP. For example, your statement
might show that you are entitled to an pension of $15,000
per year between ages 60 and 64 and a pension of
$10,000 thereafter. Is your plan harmonized?12 / Section 1
3.2 Group RRSP When can you begin receiving a retirement income?
A group RRSP is a collection of individual RRSPs to which Generally, a retirement pension under an SPP begins to be paid
contributions are generally made through payroll deductions. at the normal retirement age set by the plan (usually age 65).
Its purpose is to facilitate contributions to individual RRSPs. However, a pension can be paid earlier (often as of age 55)
Your employer may also contribute on your behalf. or later if the plan allows. The amount will then be adjusted
accordingly. If you have a defined benefit plan, the amount
3.3 Deferred Profit Sharing Plan (DPSP)
of your pension and the date you begin receiving it will
Although it is not technically a pension plan, a Deferred Profit-
generally depend on your age and the number of years
Sharing Plan (DPSP) often complements group RRSPs, by
of service recognized for the purposes of the pension plan.
receiving employer contributions.
Some plans require you to have reached a certain age
3.4 Voluntary Retirement Savings Plan (e.g., 55 or 60) or to have achieved a minimum number of years
The Voluntary Retirement Savings Plan (VRSP) is a group plan of service (e.g., 35 years of service). For other plans, the sum
offered by an employer and managed by an authorized of your age and years of service combined must reach
administrator. All employers that do not already offer a certain number (e.g., 88 or 90).
a retirement plan for which source deductions can
Death benefit
be made and that have at least five employees are
If you die before receiving a retirement pension under your SPP,
obligated to offer a VRSP to their employees. Employees
your plan must pay a death benefit to your spouse, unless
are able to opt out of a VRSP if they wish to do so. For more
he or she has waived the right to it. If you do not have a spouse,
information about VRSPs, consult Retraite Québec’s Web site.
or if your spouse has renounced the death benefit, it is paid
Finding information on your plan to your designated beneficiary or your heirs. This benefit is
For more information, consult your plan’s brochure or talk usually paid in a lump sum. Where a death benefit is payable
to your employer. Since the income that will be provided to the spouse, it can also be paid in the form of a pension.
by your plan depends on several factors (type of plan, length
If you die while you are receiving a pension under your SPP, your
of membership, contributions made, etc.), be sure you know
spouse will receive a life annuity, unless he or she has waived
all about your plan.
the right to it. This annuity is usually 60% of the amount that you
To help you with financial planning for retirement, you can also were receiving. Important! Be sure to check with your SPP
consult the statement sent periodically by the plan administrator to see how your plan defines “spouse,” as the
administrator, the financial institution or your employer that definition of spouse varies from one law to another.
gives the sums accumulated under your name.
Transfer right
You can generally transfer pension benefits accumulated in
an SPP to:
A Locked-In Retirement Account (LIRA);
Labour-sponsored funds and payroll A Life Income Fund (LIF);
deductions are another option for pension
Your new employer’s SPP if transfers are accepted;
plans offered by employers
Subscribing for shares of a labour-sponsored A life annuity contract from an insurer.
investment fund (Solidarity Fund QFL, Fondaction) can also Phased retirement
be a worthwhile option. After reaching an agreement with You could be eligible for phased retirement if you are a member
your employer, you could contribute to your RRSP through of an SPP and your plan provides for it. Phased retirement could
payroll deductions and benefit from additional tax credits allow you to receive your pension while working part time. Ask
offered to shareholders of labour-sponsored funds. your employer about it!13
Table 3 - General features of the four types of private pension plans
Supplemental Pension Plans
Defined Group RRSP DPSP VRSP
Defined benefit plan
contribution plan
Amount of the Yes No No No No
pension known
in advance
Basic employer Employer pays the Minimum 1% o (discretionary
N Varies according Employers are not
contribution sums necessary of total payroll contribution) to the plan obligated to contribute,
to fund the benefits Standardized for an be locked-in
C Not locked-in but if they do, their
promised everyone (depending eizable
S Seizable or contributions are
Locked-in on employment or unseizable, unseizable, locked-in
Unseizable category or other depending depending
recognized criteria) on the context on
Locked-in the context
Unseizable
Basic member Compulsory or non- Compulsory or non- enerally
G N/A Automatic and
contribution compulsory, at the compulsory, at the non-compulsory voluntary (possibility
(employee employer’s discretion employer’s discretion ot locked-in
N of waiving participation)
contribution) Locked-in Locked-in eizable or
S Not locked-in
Unseizable (SIPP: locked-in or unseizable, Unseizable
not, at the employer’s depending
discretion) on the context
Unseizable
Voluntary ot locked-in
N ot locked-in
N ot locked-in
N N/A Yes, under certain
contributions nseizable
U nseizable
U eizable
S conditions (RRSP
when allowed or unseizable, contribution room)
depending
on the context
Withdrawal/ Not allowed, unless Not allowed, unless es, except if special
Y Yes, if plan allows Yes, at all times
transfer by it is a voluntary it is a voluntary agreement with
member contribution and the contribution and the employer
during plan allows it plan allows it
employment SIPP:
Locked-in portion:
no refund; transfer
allowed as of age 55
Portion not locked-in:
• Employee
contribution:
at the employer’s
discretion
• Voluntary
contribution: yes
Administration Pension committee Pension committee mployer, union or
E Employer via a trust Administrator
(or employer if fewer (or employer if fewer professional authorized by the
than 26 members than 26 members association Autorité des marchés
and beneficiaries) and beneficiaries) financiers
SIPP:
Financial institution
Your options Portion not locked-in: Portion not locked-in: RSP, RRIF
R RSP, RRIF
R Portion not locked-in:
when RRSP, RRIF RRSP, RRIF nnuity
A ash refund
C RRSP, RRIF
membership Annuity Annuity ash refund
C (taxable) Annuity
ends Cash refund Cash refund (taxable) Payments over Cash refund (taxable)
(taxable) (taxable) ther registered plan
O ten years or single Other locked-in plan
Other pension plan Other pension plan lump-sum payment
Other registered plan
Locked-in portion: Locked-in portion: N/A N/A Locked-in portion:
Before age 55: LIRA, LIF As of age 55 (except
LIRA, LIF Life annuity in the case of a disability
Life annuity that reduces life
Other pension plan expectancy): payment
Other pension plan Possible refund in
As of age 55: certain situations
Life annuity
Possible refund in
certain situations!
Tip For more information about
the HBP and its effects on your
retirement, consult the guide
Save first, Unlock the potential of the HBP!
spend later. Nine strategies to make the HBP
work for you, available on
We often hear that it is hard to put money aside. Make
ÉducÉpargne’s Web site.
saving a priority. It is a good way to maintain the
standard of living you want in retirement. You have the possibility of converting it into an annuity
or Registered Retirement Income Fund (RRIF).
If you start saving early, you won’t have to ramp up your
efforts right before you retire. You have the possibility of drafting strategies to split
income at retirement through a spousal RRSP. Before
That’s why we suggest you use a method that allows
contributing, consult a specialist to find out the
to have savings deducted directly at source. The process
consequences in case of separation if you are de facto
is painless because money is set aside before you can
spouses.
get your hands on it.
* Under certain conditions, you can participate in the HBP even if you already
owned a home a few years earlier.
2. TFSA
Available since January 1, 2009, the Tax-Free Savings Account
(TFSA) is becoming one of the most useful tools for building
4. Your personal savings
up savings for retirement. The types of investment available
You can build your personal savings in two savings vehicles: for TFSAs are generally similar to those available for RRSPs.
registered investments and unregistered investments.
The TFSA is a savings account into which adults can deposit
4.1 Registered investments amounts that will remain sheltered from taxes. It can be used
to save money for any reason (the purchase of a home, a car,
1. RRSP
etc.).
Savings invested in a Registered Retirement Savings Plan
(RRSP) are sheltered from taxes as they grow. That’s why RRSPs Anyone 18 or over can contribute to a TFSA, which has no
are said to offer tax advantages that encourage investment maximum age and no income requirements. Unused TFSA
for retirement purposes. An RRSP can include several types contribution room accumulates and can be carried forward.
of investments: stock shares, bonds, Guaranteed Investment
The TFSA contribution limits were:
Certificates, etc. Amounts invested in an RRSP are deducted
from your net income, which lowers your taxes for the year
during which you invested. However, once you withdraw from 2009 2013 2016 2019
an RRSP, the amounts are taxable income. Therefore, RRSPs to 2012: to 2014: in 2015: to 2018 : and 2020 :
allow you to postpone payment of your taxes to a later date,
$5,000 $5,500 $10,000 $5,500 $6,000
when your tax rate should be lower.
The maximum contribution to an RRSP is 18% of earned income,
up to $27,230 in 2020 and $27,830 in 2021 (less if you contributed In 2020, the cumulative maximum is $69,500 for a person who
to an SPP or VRSP). To find out how much you can contribute to was 18 in 2009.
your RRSP, consult the Notice of Assessment that you receive No amount (capital or interest) withdrawn from a TFSA is
annually from the Canada Revenue Agency. taxable, and the amounts withdrawn free up more contribution
An RRSP offers a number of advantages: room for future years. TFSA contributions are not tax deductible.
You have the possibility of using funds in an RRSP to finance When it comes to taxes, the advantages of using a TFSA
the purchase of your first home through Home Buyers’ Plan for your retirement savings are undeniable: since withdrawals
(HBP)* or further your education through the Lifelong Learning are tax free, they do not negatively affect the various
Plan (LLP), under certain conditions. calculations for amounts received from social programs
(for example, the Guaranteed Income Supplement, the
Old Age Security pension or employment insurance). Also,
the amounts accumulated in a TFSA before retirement can
be used in an emergency, and any withdrawals create new
TFSA contribution room as of the following year.15
Table 4 - Comparison of RRSPs and TFSAs
RRSP TFSA
Annual contribution 60 days after the end of the current taxation year, December 31 of the taxation year.
Dates and amounts
deadline either February 29 or March 1, depending on the case*.
permitted
Annual contribution limit 18% of income earned the preceding year, In 2020, maximum of $6,000 per year as of age 18.
u p to $27, 23 0 in 2 019 and $2 7,8 30 i n 2 02 0, The cumulative maximum is $69,500 for those
indexed to the cost of living for subsequent years. not having reached the annual maximum since
Participation in employer-sponsored retirement the program was established in 2009.
plans reduces the annual contribution amount.
Age limit December 31 of the year you reach age 71 None
Are contributions income Yes No
tax deductible?
Taxable withdrawals? Yes No
Taxes
Taxable investment No No
income?
In case of death Amounts transferred to a spouse or a disabled child Amounts withdrawn from the account at death
are not taxable. Possible tax relief for amounts are not taxable. They do not affect the contribution
transferred to children. room of the spouse who transfers these amounts
into their own TFSA.
Contribution room available Corresponds to the unused portion of your maximum Corresponds to the unused portion of your maximum
annual amount deductible since 1991. annual allowable contributions since 2009.
Contribution room
Excess contributions Penalty of 1% per month Penalty of 1% per month
(lifetime excess contributions of $2,000 allowed)
Do withdrawals increase No Yes. Withdrawals add to the contribution room
contribution room? for the following year**.
Spousal contributions Possible. The contributing spouse claims the tax Considered a deposit by the spouse themselves.
deduction even if he or she is not the beneficiary. The surviving spouse may only transfer the deceased
spouse’s sums to his or her account upon death,
without any impact on his or her contribution room.
Can it be used as No Yes
considerations
collateral for a loan?
Other
Impact of withdrawals on Withdrawals are added to taxable income None
benefits from social
programs
* For example, on March 1, 2019 to reduce your taxable income for 2018. ** Withdrawals from a TFSA account in a year do not reduce the total amount of contributions already
made in that year. However, they are added to the cumulative maximum from the following year, i.e. that they increase the contribution room for the following year. Please
refer to the Government of Canada site for more details.
Avoid dipping into your
RRSP before retirement
(Except when taking advantage
of the HBP or the LLP)
You may be tempted to dip into your RRSP before retirement. Amounts withdrawn from an RRSP do not free up
To help you resist that temptation, consider the following: contribution room for subsequent years: your used
contribution room is gone for good
Any funds you withdraw today will deprive you of much
larger sums that would otherwise be available Any money withdrawn from your RRSP is deemed
in retirement. For example, at an average annual rate to be taxable income. The cost could be high. For example,
of return of 5%, a withdrawal of $5,000 made today will at a 40% tax rate, a withdrawal of $5,000 will cost you
deprive you of $21,610 in 30 years. Think it through! $2,000 in taxes.Chart 3 - Monthly savings
Savings of $100 a month until age 60
Choose Annual rate
of return: 3%
Annual rate
of return: 5%
Annual rate
of return: 7%
periodic $180,000
contributions
$160,000
$140,000
$120,000
It is generally better to contribute a little each month
to your RRSP or TFSA rather than make one large $100,000
contribution at the end of the year. Why? Because each $80,000
month, interest accrues tax free on every dollar invested.
$60,000
$40,000
$20,000
$0
If you begin at: Age 25 Age 35 Age 45
As you can see, by saving a little each month, you accumulate
money easier without undue pressure on your budget. If you
are disciplined, you can save money from each pay cheque
Age limit for and accumulate even more.
RRSP contributions
The following chart shows the growth of investments in two
interest-bearing vehicles, one registered, the other not.
We took into account both the tax reduction obtained (40%)
You can contribute to an RRSP until December 31st of the by contributing to the RRSP and the income taxes payable
year in which you reach age 71. Four options are then (40%) by withdrawing the amounts from the RRSP.
available: withdraw the entire amount of your RRSP
(rarely to your advantage), purchase an annuity
or convert your RRSP into a Registered Retirement
Income Fund (RRIF) or into an Advanced Life Deferred
Chart 4 - The registered savings advantage*
Annuity (ALDA).
5 ans 10 ans 15 ans 20 ans 25 ans 30 ans 35 ans
You can also combine these strategies. An RRIF is similar
120 000 $
to an RRSP in that it allows your savings to grow tax
free. The main difference is that you must withdraw 100 000 $
a minimum amount from your RRIF every year, which
is then considered taxable income. 80 000 $
Even if you can no longer contribute to your RRSP, if your 60 000 $
spouse has not yet reached age 71, you can continue
40 000 $
to contribute to a spousal RRSP with all the tax
advantages. You must have RRSP contribution room, 20 000 $
and the tax refund will go to you. Your spouse’s RRSP
contribution room will not be affected. From a legal 0$
standpoint, however, the amounts contributed belong Placement hors REER/CELI Placement REER/CELI
to your spouse. This may have consequences in the
event of the breakdown of the couple’s union if the
* Growth of an annual contribution of $1,000 in an RRSP or TFSA and in an
couple is not subject to the rules of partition of family
unregistered savings vehicle. The assumptions are as follows: annual rate
patrimony. of return of 5%, marginal tax rate of 40%, payments made at the beginning
of the year.
There is no maximum age limit for contributing
to a TFSA.17
4.2 Unregistered investment In your RRSP or TFSA, investments such as publicly-traded
shares or certain mutual fund shares generate dividend
1. Traditional unregistered investments
income or capital gains. You therefore lose the tax break you
If you have maximized your RRSP, TFSA and SPP or VRSP
would be eligible for otherwise. A financial planner can help you
contributions, there is no reason you cannot save more
draft an investment strategy that weighs these factors.
for retirement by making unregistered investments outside
an RRSP or TFSA. However, income generated by unregistered 2. Unregistered tax-advantaged fund
investments is taxable. One common strategy is to: In addition to traditional unregistered investments, you can
invest in unregistered tax-advantaged funds. Although tax-
Put all interest-bearing investments into an RRSP or TFSA;
advantaged funds are less flexible than other types of funds
Put all investments that pay capital gains into in terms of cashing out, they allow you in return to benefit from
an unregistered account. tax credits that reduce your income taxes payable. As with
other unregistered investments, the income these investments
For tax purposes, interest income is not treated the same
generate (capital gains, in the case of tax-advantaged funds)
as dividends or capital gains. Therefore, the taxes payable
are taxable in the year of withdrawal.1
on interest earnings are greater than the taxes that apply
to dividend and capital gains income. Here is a table summarizing the main characteristics of three
tax-advantaged funds in Quebec:
Table 5 - Main characteristics of three tax-advantaged funds in quebec
Capital régional
Fondaction Solidarity Fund QFL
et coopératif Desjardins2
Federal credit rate 15% 15% N/A
Provincial credit rate 20% 15% 35%
Total credits 35% 30% 35%
Maximum annual amount
Maximum of $5,000 in total for both funds Maximum of $3,000
eligible for tax credits
Can be deposited
Yes Yes No
in an RRSP
At retirementand, with a minimum holdins Minimum holding period
Withdrawal conditions3
period of two years, with exceptions of 7 years, with exceptions
1. The tax credits of these funds do not reduce the adjusted cost base of these shares, which will be a significant benefit on the resale of these shares by decreasing the
capital gain. / 2. This is the current category of shares. Beginning in 2018, a shareholder with shares of the current category for at least 7 years and who has never requested
the redemption of his or her shares or proceeded to the purchase by agreement of his or her shares, may acquire shares of a new category. This new class of shares will
entitle the shareholder to an additional 10% credit. In exchange for this credit, the shareholder agrees to keep his or her shares for another period of 7 years. The maximum
amount eligible for the credit will be $15,000, which could generate an additional credit of up to $1,500. / 3. Consult the simplified prospectus for these funds for more
information.
Plan online!
SimulR and CompuPension are two tools There you will find information on your
that enable you to simulate your retirement participation in the Québec Pension Plan as
income. Visit their site to use them and kill well as the amounts you could receive when
two birds with one stone by consulting you retire. retraitequebec.gouv.qc.ca
My Account.18 / Section 2
2 5
Remember
Determine 1. Eligibility for a public pension begins
only at age 60.
Your Retirement
2. Public pension plans are designed
to ensure minimum protection
in retirement.
Age
3. Retirement income generally depends
on employment earnings.
4. Review your saving strategies
regularly to ensure a retirement that
meets your expectations.
if you choose to retire between the ages of 55 and 65, there may 5. The age at which you decide to retire
be a financial cost. will influence your savings strategy.
AT AGE 55, you are not yet eligible for a public pension plan (Québec Pension
Plan and Old Age Security). You will have to rely on your personal savings
to get by. Will you have enough? Remember, you won’t be entitled to a pension
under the Québec Pension Plan (QPP) for another five years, and it will be
a reduced pension at that. You’ll also have to wait at least ten years to qualify
for an Old Age Security (OAS) pension.
AT AGE 60, you become eligible for a retirement pension under the QPP. If you
apply for a QPP pension at that age, the amount will be lower than the amount
you would have been entitled to if you had applied at age 65. The decrease
is permanent.
AT AGE 65, you have access to all of the available sources of retirement
income. You can receive an OAS pension and the Guaranteed Income
Supplement (GIS), if you are eligible.19
Table 6 - Single person retiring at age 60 in 2020 and 2050
Annual % of income replaced
QPP* OAS GIS Annual total
income* before taxes
before
retirement 2020 2050 2020 2050 2020 2050 2020 2050 2020 2050
$30,000 $4,833 $5,981 $0 $0 $0 $0 $4,833 $5,981 16% 20%
$35,000 $5,595 $6,924 $0 $0 $0 $0 $5,595 $6,924 16% 20%
$40,000 $6,345 $7,852 $0 $0 $0 $0 $6,345 $7,852 16% 20%
$45,000 $7,083 $8,766 $0 $0 $0 $0 $7,083 $8,766 16% 19%
$50,000 $7,809 $9,663 $0 $0 $0 $0 $7,809 $9,663 16% 19%
$55,000 $8,522 $10,546 $0 $0 $0 $0 $8,522 $10,546 15% 19%
$60,000 $9,042 $11,363 $0 $0 $0 $0 $9,042 $11,363 15% 19%
$65,000 $9,042 $12,018 $0 $0 $0 $0 $9,042 $12,018 14% 18%
$70,000 $9,042 $12,261 $0 $0 $0 $0 $9,042 $12,261 13% 17%
$75,000 $9,042 $12,261 $0 $0 $0 $0 $9,042 $12,261 12% 16%
$80,000 $9,042 $12,261 $0 $0 $0 $0 $9,042 $12,261 11% 15%
* This data is in 2020 dollars
Table 7 - Single person retiring at age 65 in 2020 and 2050
Income from
Income from public sources Total income
public sources
Total income,
Annual
Additional public and
income* Total Income Objective of
Replacement income private
before QPP* OAS* GIS* from public replacement
rate to achieve sources
retirement sources rate
the goal combined, by
objective
2020 2050 2020 2050 2020 2050 2020 2050 2020 2050 2020 2050 2020 2050 2020 2050
$30,000 $7,220 $8,935 $7,363 $5,462 $714 $0 $15,297 $14,398 51% 48% $8,000 $9,500 $24,011 $23,898 80% 80%
$35,000 $8,424 $10,424 $7,363 $5,462 $0 $0 $15,786 $15,887 45% 45% $12,200 $12,000 $27,986 $27,887 80% 80%
$40,000 $9,627 $11,914 $7,363 $5,462 $0 $0 $16,990 $17,376 42% 43% $13,000 $12,500 $29,990 $29,876 75% 75%
$45,000 $10,830 $13,403 $7,363 $5,462 $0 $0 $18,193 $18,865 40% 42% $15,500 $15,000 $33,693 $33,865 75% 75%
$50,000 $12,034 $14,892 $7,363 $5,462 $0 $0 $19,396 $20,355 39% 41% $15,400 $14,500 $34,796 $34,855 70% 70%
$55,000 $13,237 $16,381 $7,363 $5,462 $0 $0 $20,600 $21,844 37% 40% $18,000 $16,500 $38,600 $38,344 70% 70%
$60,000 $14,128 $17,754 $7,363 $5,462 $0 $0 $21,490 $23,217 36% 39% $20,500 $18,500 $41,990 $41,717 70% 70%
$65,000 $14,128 $18,778 $7,363 $5,462 $0 $0 $21,490 $24,240 33% 37% $20,500 $18,200 $41,990 $42,440 65% 65%
$70,000 $14,128 $19,159 $7,363 $5,462 $0 $0 $21,490 $24,621 31% 35% $24,000 $21,000 $45,490 $45,621 65% 65%
$75,000 $14,128 $19,159 $7,363 $5,462 $0 $0 $21,490 $24,621 29% 33% $23,500 $20,500 $44,990 $45,121 60% 60%
$80,000 $14,128 $19,159 $7,363 $5,462 $0 $0 $21,490 $24,621 27% 31% $26,500 $23,000 $47,990 $47,621 60% 60%
*This data is in 2020 dollars. The Old Age Security pension and the Guaranteed Income Supplement increase each year according to inflation, while salaries generally
increase at a rate of 1% higher than inflation. To reflect this assumption, we need to multiply OAS in today’s dollars by a discount factor of 1% by 2020 (7,363 × 0.7419 = $5,462).20/ Section 2
What do public pension plans offer?
Public programs such as the Québec Pension Plan (QPP), Setting your
federal Old Age Security (OAS) pension and Guaranteed
Income Supplement (GIS), generally do not provide all of the
funds necessary to cover individual’s needs in retirement. You
retirement age
will have to rely on your personal savings or income from
a pension plan to make up the difference.
is a good starting
Here is an example point, but life can
Maryse is 35 years old. She believes that her average gross
annual income of the three years before her withdrawal from
labour market will be $50,000 and, at present, she has not
sometimes throw
saved for retirement.
you a curve.
Here are three
At age 65, public plans replace about 40% of her working
income (see Table 7). To achieve her goal of 70% replacement
rate of her income at retirement, she will need additional
income from another pension plan, an RRSP or a job to make
up the difference, of $14,500 a year. She could also consider
examples:
saving money to fill this gap. As our example applies
to pre-tax income we however do not take into account this
possibility.
However, if she retires at age 60 Your health
Your health can change drastically, forcing you opt for
Public plans will only replace 19% of her working income
phased retirement or retire earlier than you intended.
(see Table 6);
A serious illness or disability could lead you to reassess
She will only receive 64% of her pension under the Québec your plans for retirement. A financial planner can give
Pension Plan for the rest of her life; you more information to help you prepare for the
unexpected.
She will not yet be eligible for the OAS or GIS.
Family obligations
If you’re thinking about having children at age 35, bear
in mind that they will only be 20 years old when you turn
55. If they are students or still living at home, this could
mean an extra financial burden. You may have to put
off retirement. On the other hand, if you have to care
for a family member, you may be forced to leave the
labour market sooner than expected. Be sure to take
family obligations into consideration when planning for
retirement.
Your professionnal situation
It is difficult to predict what your professional situation
will be like over a period of 20 or 30 years. Losing a job,
a plant closing, returning to school to begin a new
career, a work accident, and starting a new business are
a few examples of major changes that could have
an effect on when you retire. Your retirement could
be delayed or, on the contrary, occur sooner than you
anticipated. A professional can help take these various
factors into account in planning for retirement..21
Other
information It’s different for women
life expectancy and financial planning
Life expectancy is the average number of years you can expect Studies show that women have less retirement income than
to live. But it is only an average: some people die very young men. When a child is born, women often take maternity leave
while others live beyond age 100. So you need to plan for and have their income drop for an extended length of time.
retirement carefully! During this period, they do not necessarily save for retirement.
Regular updates If you are a woman, you will probably have to live longer on
A financial plan for retirement is never set in stone. Professionals your savings than if you were a man. In 2019, life expectancy
recommend that you re-evaluate your plan every three years for men and women age 65 is 86 and 88.5 years of age
or when a major change that has an effect on your finances respectively.
occurs. Therefore, you could re-evaluate it at different phases
More women live alone. In 2011, in Quebec, 39% of women aged
of your life, such as the birth of a child, a sabbatical leave, part-
65 and over lived alone, compared with 20% of men the same
time work, loss of employment or startup of a business.
age.4 Therefore, more women do not have help covering basic
needs such as lodgings, heating, taxes, etc.
4. Source : Ministère de la Santé et des Services sociaux.22 / Section 3
3
Set Your 3
Remember
Retirement Goals
1. A
n individual will generally require 60%
to 80% of his or her average gross annual
income earned during the last three years
of work to maintain the same standard
Generally, you will not need 100% of your income of living in retirement.
once you retire.
2. W
hen you retire, your work-related
expenses will decrease or disappear, but
expenses for health care and social and
recreational activities will increase.
3. At whatever age you retire, public plans
will only replace a portion of your income.
You can make up the difference with your
personal savings or retirement plan
or a combination of the two.23
60 to 80%
of average
work income earned
during the last
three years
Specialists agree that in general, an individual will require Generally, you will not need 100% of your income once you
approximately 60% to 80% of his or her gross annual income retire because:
earned during the last three years of work to maintain the
You will have fewer expenses, and some will or disappear
same standard of living in retirement. for example, if your
altogether (e.g., work-related expenses);
average gross annual income is $50,000, you will need $30,000
to $40,000 per year in retirement. You will be paying less tax;
You will no longer be making contributions for retirement;
You will likely have fewer family-related expenses.
Important! On the other hand, costs for health care and social and
recreational activities could increase.
However, this “rule” does not apply to everyone: it depends
on your employment income and your post retirement plans.
You can determine a higher or lower percentage, based on
your personal situation, that takes into account your salary and Get inspired by the content of fixed and
your retirement goals. variables expenses from the budget table
You can convert the percentage into dollars (e.g., 80%
in this guide tohelp you evaluate your expenses
of $30,000 is $24,000) to determine whether the amount will in retirement.
be sufficient.24/ Section 3
Table 8 - Probable changes in expenses during retirement
Expenses Eliminated Reduced Unchanged Increased
Social and recreational activities
Food
Contributions to a pension plan offered by your employer
RRSP contributions
TFSA contributions
Québec Pension Plan contributions
Professional membership fees and union dues
Employment insurance contributions
Parental insurance contributions
Vehicle maintenance
Transportation expenses
Expenses for travel
Income tax
Lodging
Health care
Clothing25
What does this
chart mean?
Chart 5 shows the percentage of income various public
sources replaces, by employment income prior
to retirement, when benefits start at age 65. The higher
your salary, the more you will need to rely on other
types of savings to maintain the standard of living you
had prior to retirement.
Chart 5 - Sources of income required to replace between 60% and 80% of your salary
before retirement for a single person retiring at age 65 in 2050
80% objective 75% objective 70% objective 65% objective 60% objective
90%
80%
32% 34%
SOURCES OF REPLACEMENT INCOME (%)
31% 33%
70%
29% 30% 31%
28% 30%
60%
27% 29%
50%
18%
16% 14%
40% 12% 11% 10% 9%
8%
8%
30% 7%
30% 30% 30% 30% 30% 30% 30% 7%
29%
27% 26%
20% 24%
10%
0%
$30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000
REVENUE BEFORE RETIREMENT ($)
QPP OAS Additional income to achieve the goal26/ Section 4
4
Determine How
Much You Should
Save Each Year
Have you started to make calculations for retirement?
From a financial standpoint, at what age could you retire?
4
Remember
1. M
ake your budget to know where
Of the amount you could manage to save each month, what portion should
your money goes.
go towards an RRSP? Should you invest in a TFSA? How much will your RRSP
be worth when you are 60? If you retire early, do you know how much your SPP 2. P
ay yourself first.
pension will provide? In this section, discover the various tools offered
by ÉducÉpargne to help you answer these questions. 3. Set aside 10% of your net income
for retirement.
4. Re-evaluate your budget regularly.27
1. Put at least 10% of your net income
away for retirement
To make sure you save, it is better to start with a budget and Audrey likes her current lifestyle and wants to maintain it.
include a portion devoted to savings. Given this fact, where do we find amounts to save?
As a general rule, it is often recommended to set aside 10% 10% of her net income is $3,600. She would like to save that
of your net income for retirement. Of course, this rule doesn’t amount each year. In making her budget, she realizes that she
apply in all situations, but it can give you a general estimate has a $3,000 balance on her credit card at an interest rate
of the amount you should save in order to maintain your of 18%. She also has a credit card balance insurance that costs
standard of living in retirement. her $360 a year. She finds that her auto and home insurance
For example are expensive and that her groceries are too. She is, however,
Audrey is 28 years old. She is an employee at a multimedia very proud of her $3,000 cash emergency fund deposited
development company, and her employer does not offer in a TFSA.
a retirement savings plan. Her annual gross salary is $45,000. By taking inspiration from the 99 trucs pour économiser sans
Currently, once the typical deductions are made (federal and trop se priver, she chooses a few tips and she quickly gets
Québec taxes, contributions to the Québec Pension Plan, results while maintaining her standard of living:
employment insurance and the Québec Parental Insurance
Plan, etc.), her net income of approximately $36,000 is used for
all of her basic expenses, plus a few “treats.”
Table 9 - Audrey’s strategy to achieve her goals
Actions Results
Achieve immediately
She uses her emergency fund (TFSA) to pay off her expensive credit card. She saves $540 in interest and $360 in credit card insurance each
From now on, she will pay the full credit card balance at the end of each year. She temporarily sacrifices$45 of annual return on the amounts
month. deposited in her TFSA.
She changes credit cards for a card that gives her cash rewards. She will receive $200 in rewards each year and she will invest it.
She’s shopping for auto and home insurance. She saves $400 a year.
She buys more foods on sale at the grocery store, going so far as to stock She saves $300 a year.
up in order to not pay for regular-priced food.
She uses part of her 3% salary increase ($400 a year) to invest. The rest will She saves $400 the first year, $800 the second and $1200 the third
be used to offset inflation. She will do the same for the next two years, then year.
she will use all of her other salary increases to improve her lifestyle. After all,
she tells herself, one must live well!
Achieved in 1st year
After 9 months, she saved $1,500 and deposited it into her savings account She saves $200 a year in bank fees.
as an emergency fund. She then chooses a banking package allowing her
a dozen free transactions per month while maintaining this balance. Most
of her transactions will now be done with her credit card which does not
charge fees.
At the end of the first year, with the money saved, she deposits $700 She deposits $700 into her TFSA that accumulates tax-free and also
in her TFSA. serves as an emergency fund.
Achieved in 2nd year
The amount saved that year allow her to: She deposits $800 more into her TFSA.
Deposit $800 in her TFSA for her emergency fund; Her emergency fund is totally restored;
Invest $1,570 in her RRSP (cost of $1,060 considering the tax reduction); She contributes $1,570 to her RRSP;
Invest $2,400 in a labour-sponsored RRSP fund (cost of $900). She contributes $2,400 to a labour-sponsored RRSP fund.
Achieved in 3rd, 4th and 5th years
The amount saved in each of these years allow her to: She contributes $3,348 to her RRSP;
Invest $3,348 in her RRSP (cost of $2,260 considering the tax reduction); She contributes $2,400 to a labour-sponsored RRSP fund.
Invest $2,400 in a labour-sponsored RRSP fund (cost of $900).28/ Section 4
2. Plan now!
The 10% rule doesn’t apply to every situation. Your personal
retirement goals might require you to set aside a different
percentage of your income. If your employer offers a retirement
savings plan, you could reduce the amount of your personal
savings.
After five years, Audrey sees the significant financial progress she ÉducÉpargne invites you to use SimulR! Simple and easy-
has made and she is proud of it. Taking into account her to-use, the tool was designed to help you make your own
performance, she has accumulated more than $22,000 in her savings plan for retirement. It is available on ÉducÉpargne’s
RRSPs. Web site educepargne.ca in the “Outils pratiques” section
as well as on the Retraite Québec Web site at retraitequebec.
She is aware that she will have to pay taxes when she withdraws gouv.qc.ca.
some money, but the amount accumulated without reducing
her standard of living is still impressive. This calculator is for everyone, no matter how familiar you are
with personal finances and financial planning. It offers
She could have chosen to invest less in a labour-sponsored an overview of the amounts you could receive in retirement.
fund or in her other RRSP, and more in her TFSA, but she thought It estimates the amounts you could recei ve from your RRSPs,
it was motivating to see large amounts of money accumulate QPP pension and OAS pension, as well as any other applicable
through tax breaks. For the following years, she proposes employer-sponsored retirement plans.
to consult an authorized representative to make sure
to diversify her investments. SimulR can also help you determine if the money you are
setting aside for retirement will be enough to meet your needs
How much will Audrey have accumulated in 35 years. throughout your retirement. If not, it will give you an overview
Assuming a rate of return of 3.9%, she will have accumulated of the additional amounts that you will need to save each year
more than $310,000. That’s a nice chunk of change for her to meet your goals.
retirement!
To help you save
ÉducÉpargne’s brochure 99 trucs pour économiser sans trop se priver (French version only)
is a tool that will help you save money by paying less for the goods and services you need
without asking you to give up coffee or take your lunch to work. Download or order this guide
for free at educepargne.ca.You can also read
