Government pension plans most commonly consist of the Canada Pension Plan (CPP) and Old Age Security (OAS). If you contributed to the Canadian Pension Plan during your working years, you will be provided with monthly payments from the government. The amount of income you receive every month depends on the length of time you contributed to the plan, how much you contributed, and the age you start receiving your retirement pension benefits.

Old Age Security (OAS) pension is a monthly payment you can get if you are 65. It is income based and will be clawed back over certain thresholds. 

The second pillar is employer pension plans and/or group Registered Retirement Savings Plans (RRSPs). Your pension plan might be a defined benefit pension plan or a defined contribution pension plan. Generally, both yourself and your employer will contribute to the plan over the span of your career. When you retire, you have the option of taking a monthly income from the pension plan or taking your commuted value and have an investment advisor or financial planner manage your assets.

The third pillar of retirement income is individual retirement savings. This can come in a number of different forms and accounts. The most common account is a Registered Retirement Savings Plan (RRSP). An RRSP investment is a tax-sheltered vehicle where an investor can grow assets tax-deferred until they pull money out of the RRSP or turn it into a Registered Retirement Income Fund (RRIF). 

Tax Free Savings Accounts (TFSA) can also be used for retirement income.  When used for retirement income, it doesn’t count as income like other sources of retirement income. 

Other areas of retirement income can include individual pension plans, non-registered accounts, rental income, dividends, and business income.