The Québec Pension Plan (QPP) is a public plan financed by contributions from employers and workers in Québec. This plan provides workers and their families with basic financial protection in the event of retirement, death or disability.
The retirement pension under the
QPP is intended for every Québec worker that contributed on eligible income greater than $3500. The amount of the retirement pension depends on
the number of years of contribution, your income during that period and your age when you apply. The amount
is indexed once a year
to the cost of living. In 2021, the maximum annual pension is around
$15 000 if you start receiving it at age 65.
While it is possible for you to receive a retirement pension under the
QPP at age 60,
applying later may be to your advantage for several reasons. If you apply for your retirement pension at age 60, the amount will be lower than if you postpone applying until age 65. And if you apply between ages 65 and 70, the amount will be even higher.
At age 65, the retirement pension is equal to 25% of the earnings on which you contributed throughout your career. Within the next 40 years, the income replacement rate will increase from 25% to 33%. For future retirees, it is
reassuring to know that coverage will be more significant in the future.
Remember that the longer you wait before applying for your pension, the higher your benefits will be for the entire duration of the payments.
Your pension will be indexed based on the cost of living. If you have other sources of income, it may be beneficial to postpone applying.