Amounts and Types of Income you Will Need When you Retire

First of all, that depends on your needs and the age at which you would like to stop working.

It is important to know that to maintain your current standard of living in retirement, you will have to replace between 60% and 80% of your gross employment earnings by different sources of income. Gross means before taxes. When you retire, you usually do not have to replace 100% of your income because you will have less expenses and you will no longer have deductions from your salary, like those for the Québec Pension Plan.

You must also determine what your projects will be when you retire. For example, if you would like to travel, you must ask yourself how much money per year you will need to do so. Be realistic and take into account your interests.

Once you have assessed your needs, take time to calculate the amount it represents. For example, if you earn $60 000 a year, you could need about $42 000 to maintain your standard of living. It corresponds to 70% of your employment earnings. If you have special projects, their cost must be added to that amount. The best way to estimate your needs in retirement is to make a budget. Our Budget planner  tool can guide you so that you can make a budget that takes into account your retirement income.

Now that you know the amount you will need when you stop working, you must know how to obtain it. You can count on two sources of basic income: the Old Age Security pension from the Government of Canada and the pension from the Québec Pension Plan. However, those two sources of income are basic income, which means that they provide you with part of your income, but do not cover all your needs. The remainder must be compensated with your workplace pension plan, if you have one, your savings accumulated over the years and maybe even income from a part-time job, if necessary. Let us take a closer look.

How much will I receive from the Old Age Security program?

As soon as you turn 65, each month, you will receive the Old Age Security pension from the Government of Canada. If your retirement income is low, you could also be entitled to the Guaranteed Income Supplement, which will give you an additional amount.

The Old Age Security pension will replace about 15% of your income, if you have an average income. The pension is adjusted to the cost of living every three months. You can also wait after you turn 65 to apply for it. If you do so, you will be entitled to a bigger amount for the rest of your life. It is worth thinking about! You can even postpone payment of your pension until you turn 70 so that it can be higher. The amount you will receive will increase by 7.2% per year of waiting.

Worth knowing about: if your income exceeds a certain amount, that is, $93 454  in 2025, your pension will decrease by $0.15  for each dollar of income above the threshold.

For more information on the Old Age Security pension or the Guaranteed Income Supplement, visit the Public pensions  section on the Government of Canada's website.

How much will I receive from the Québec Pension Plan?

The retirement pension under the Québec Pension Plan (QPP) will give you a little more than 25% of the employment earnings you have earned on average throughout your career. The contributions that you pay to the QPP on each pay determine your pension amount. Your contributions correspond to a percentage of your salary. Therefore, the higher your salary, the higher your contributions, up to a certain maximum. In 2025, the maximum is $81 200 . A salaried worker who earns such an income pays a contribution of $4735 .

When your retirement pension is calculated, some of your lower income is not taken into account. You can consult the details on the Calculation of your retirement pension under the Québec Pension Plan web page. 

Aside from the income you have earned during your career, it is the age at which you start receiving your pension that determines its amount. The normal age is 65, therefore, if you start receiving your pension at that age, you will receive 100% of the amount. If you apply for it later, you will be entitled to a higher amount. If you apply for it between ages 60 and 65, you will receive a lower amount. Very important thing to know: the retirement pension is guaranteed for life and increases each year following the cost of living. Therefore, it is worth trying to maximize its amount by applying for it as late as possible.

In 2025, the average pension under the QPP, for someone who starts receiving it at age 65, is $717  per month, that is, $8604  per year.

You can consult a personalized document, which is called the Statement of Participation under the QPP. Consult it in My Account: you will therefore have an estimate of the pension you could start receiving at different ages.