The steps to planning your retirement in Quebec
Stressed about stopping work? Forced into unplanned retirement? Anxiously awaiting retirement for years now? Are you ready? Retirement has come knocking at your door! To enjoy the full measure of happiness you deserve, here are major considerations to look at that will help simplify the entire process.
People generally retire between 55 and 70 years of age. Depending on when you take the plunge, your pension may differ.
The Quebec Pension Plan (QPP) disburses retirement pension starting on your 60th birthday. However, unlike other countries, our government does not force anyone to retire at age 60.
To give you an idea of QPP payment amounts, here is a round figure overview.
70 YEARS OLD: $1,855/month
If you request your QPP at age 70, you will receive even more per month, 142% of the pension (which is a significant guaranteed return).
65 YEARS OLD: $1,305/month
If you request your QPP at age 65, you will receive about $1,305/month, or 100% of the pension.
60 YEARS OLD: $835/month
If you request your QPP at age 60*, you will receive just over $835/month, or 64% of the pension.
55 YEARS OLD: $0/month
If you request your QPP at age 55, you will receive $0/month, or 0% of the pension.
In reality, you earn 0,6% on your pensions every month until you turn 65. The government then guarantees you an annual increase of 7,2% on the amount owed to you until your 65 th birthday. If you wait until you are 70, the percentage increases considerably, to about 8% annually.
What is my marital status?
Whether you are married, living common-law, divorced, widowed or single when you retire, your marital status can affect your income and pension.
It is not mandatory that you both have contributed to the QPP. You can split your retirement income between you and your spouse in order to reduce the tax you have to pay.
If you got a divorce, legal separation or civil annulment of marriage, the work income that is registered in your name and that of your former spouse is shared automatically.
You are entitled to a survivor's pension. The amount of this pension varies according to certain factors, such as the contributions your spouse made to the QPP, your age, the number of dependent children of the deceased, whether you are a disabled person and if you are already receiving a retirement or disability pension.
If you are a single worker without dependent children, you will be asked to contribute to a government plan that, unfortunately, puts you at a disadvantage while benefitting couples and families.
Remember to write your will and complete your certificate of incapability if you didn't already do so when you purchased your home or when your child was born. It's not a pleasant thing to do but it's essential!
What will I spend as a retiree?
Expenses during retirement are usually lower than during working life. However, if you are planning expensive projects, such as a luxury trip, be sure to include them in your calculations1.