We tell our story living on the Canadian and UK state pensions is it possible to pay your monthly outgoings only with government old age security. Find out the average Canadian Pension Plan (CPP) and Old Age Security (OAS) payments in Canada.
Explore the idea of living frugally and having all your bills paid by national pensions, without using your own savings. These pensions are available to anyone in Canada and the U.K. who have worked. These are not private pension plans, purely government programs for the elderly.
It’s surprising how much you get and how far you can stretch your monthly living expense budget in a first world country like Canada.
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We do recommend saving for your retirement if you want to travel or pay for a new car as these government pensions aren’t enough for that.
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Can You Live On The State Pension In Canada?
Retirement is a significant milestone in one’s life, and planning for it is crucial to ensure financial security during this phase. In Canada, one of the primary sources of income for seniors is the state pension. But the question that often arises is whether it is enough to live on comfortably. Let’s delve deeper to understand the reality.
The state pension in Canada, known as the Old Age Security (OAS) pension, is a monthly payment provided by the government to residents aged 65 or older who meet the eligibility criteria. The amount one receives is determined by the number of years they have lived in Canada after turning 18.
As of 2021, the maximum monthly amount for the OAS pension is $615.37. This might seem like a considerable sum, but it is important to remember that it is designed to be a safety net rather than a substantial income stream. Therefore, relying solely on the state pension to cover all living expenses may not be feasible for most retirees.
Living on the state pension alone might be challenging due to various factors. First and foremost, the cost of living varies across the country. In cities like Vancouver or Toronto, where housing costs are high, it can be extremely difficult to make ends meet with just the OAS pension. Moreover, healthcare expenses, rising utility bills, and general inflation can further strain a retiree’s budget.
However, it is essential to note that the state pension is not the only financial benefit available to seniors in Canada. The Canada Pension Plan (CPP) is another key component of the retirement income system. CPP provides a monthly payment to individuals who have worked and contributed to the plan during their working years. The amount received depends on factors such as the individual’s earnings and the number of years worked.
In addition to the CPP, many seniors may also have personal savings, investments, or employer-sponsored pensions to rely on. These additional sources of income can significantly improve one’s financial situation during retirement and complement the state pension.
To gain a clearer understanding of whether living on the state pension is feasible, it is crucial to examine individual circumstances. Personal financial planning, including budgeting, expense management, and social support networks, can play a pivotal role in determining one’s ability to live comfortably.
Furthermore, considering potential adjustments to lifestyle and spending patterns might be necessary. Downsizing to a smaller home, cutting back on unnecessary expenses, and taking advantage of senior discounts can all help stretch the retirement budget.
It is worth noting that the state pension, although not sufficient as a standalone income source, provides a foundation of financial security for seniors in Canada. It is one component of a larger retirement income strategy that includes personal savings and other retirement benefits.
In conclusion, while it may be challenging to live solely on the state pension in Canada, it is not impossible. It requires careful financial planning, examining additional income sources, and making adjustments to one’s lifestyle. Retirees must be proactive when it comes to managing their finances, leveraging all available resources to create a comfortable and secure retirement.
Thank you for emphasizing the importance of calculating costs for living in retirement. This has often been mentioned in one way or another in your previous videos, but I am glad you bring it up once again very effectively in this episode. Your advice has helped me and my spouse to live comfortably in my new retirement. I am relieved to hear that we are, so to speak, right in the ballpark insofar as social security and investment earnings have been going for us since I took the step to leave the workforce and live life to the fullest. Best wishes to both of you always! (And please, Tina, watch your consumption of those delicious shortbread cookies. You known the old saying: "Eat it today and wear it tomorrow!")
Your channel is quite informative. In a future video, you might want to cover what people will have if the one partner dies. We can’t assume that there will be two people always. They do boost the amount for the single person that is left.
It's a sad situation for the single folks. $2300 expenses on average and about $1300 without any savings… a Golden Girls situation might have to become the norm or multi generational households again.
Cpp contributions if lower less monthly income
thanks Tina and Noam.For people in UK you can get the State pension statement by completing the Gateway portal and the max is £9300.00 approx for 35 years of NI contribution.If you have no mortgage then we are looking at a figure of £500 per month to service running cost for a month as follows. approx per month Council T £130,Water bill £20,Electricity and gas £130,Internet £30,Food £150, Petrol £150 for two £510 sharing the family home .It will equal £255 per couple.So this figure is leaving the couple with some more savings which can be used for travel.Moral of the story is stay together in Pension age! in my opinion one can live on state pension with some travel once a month in the UK
Canada has provinces not states lol
1300$ and if your single good luck when rent is like 2000$. The nonsense is this is only supplemental BS it never was. In the past you could live on it not now.
No you can't.
It was not designed for Canadians to live on.
So… Next question.
CPP + OAS + GIS
What you did not mention, attached to OAS is Guaranteed Income Supplement. If you did not work much during your work life (due to illness, disabilities etc) and you have no savings, you may qualify for GIS which is added to your OAS. These added benefits help you pay for your daily living expenses. In Alberta, retired seniors may also qualify for Alberts Senior Health Benefit which pays for dental, optical, drugs, and other medical services not covered by universal health care.
General frugality + target long stay travel = good food and adventure while health lasts in 60s and early 70s. U.S. Social Security of $2000 + home rental income of $2000 as a base monthly cash flow. Rent and food in Philippines, Thailand, Mexico, Turkey is under $1500 in all cases. Actually leaves rooms for small indulgences and even save money in early retirement before returning to a paid for Texas home and Medicare advantages in later senior stages. Even nice, quieter parts of Spain, Portugal, France and Greece can be had under $1000 rent with all utilities included. Visit a chosen locale for 3-6 months on favorable lodging terms; depart as required under tourist visa rules; go to next spot.
How does somebody “grandfather” a rent ?
Of course you can live on it. Nobody dies. However life can be a strained and sad life.
I enjoy your informative videos. Have siblings both Canada and US in their 60s like me but all of us are not retired so im curious although i live in northern Scandinavia.
I f you have savings do you get less pension?If we have a little too much saved we get no government pension. Gets very tough.
How about pension taxation? Thanks
You didn't mention income taxes. From what I heard CPP is taxed. Not sure about OAS. So that Household CPP and OAS will be less than $2,500
Thanks for sharing
Thanks Norm and Tina! Very interesting and informative as usual. Have you ever done a video about the issues surrounding the frozen UK pension for expats in Canada?
It will be really difficult without savings. It was never meant to be the only means to retire.
What happens when one spouse passes?
Usually not that much. My husband worked in Canada over 20 years , due to we are immigrant. Two years earlier he diagnosis the cancer and he decided retirement at 64, he’s CPP only collected $500. I never worked in Canada, I just 60, This year we only have $500 income each month, Until my husband turns 65 he only have 500+645+GIS, I don’t know how much Allowance I can apply, You said $2600 per month should both husband and the wife were working.
What happens if a partner passes away… is there a supplement that you can get from the government to survive?
Not sure how I came across your video but you two are wonderful. I am one of the very fortunate who has a pension from my university, including dental and expanded medical. Your advice to people less fortunate is valuable. Thank you for doing this.
Funny get older and get more money.
One drawback with CPP is the 1st one to pass then the survivor get no more than the highest collecting spouse. Am I correct?
Hello, Tina and Norm!
Thank you so much for sharing your experience!
I'm a student at Humber College in Toronto. I would like to make one appointment to interview you. Please, how can I contact you? Thank you!
How does OAS work for couples? I was talking with my sister yesterday and her financial adviser gave her and her husband the income details on when OAS is reduced and eliminated. However the figures seemed to be the same as I understood to be the income levels for a single income. Their advisor also seems more concerned with how much they leave their children than their standard of living while alive.
i live on CPP and OAS – it is not luxury – but it pays my bills and i get by just fine. yes, there are no travel plans or luxurious shopping trips, or many restaurant visits but it is better than nothing. and before anyone jumps all over me at why i do not have savings but if you lived my life you would then understand why i only survive on this.
Like your videos, all good sense. Based on the current exchange rate, the max couples age pension plus allowances here in Australia is about CAD $3,300. If you're renting, this would be a mighty tight squeeze, so glad we're not in that position.
Singles are always overlooked
Wow, that’s a lot higher than the state pension in England.
that would cover a week of rent in Toronto
I think It's all the big spenders who will find your Canada Pension figures meagre . Since I own my place with no mortgage and have no vehicle I view Canadas Pension as being extremely generous indeed ! In fact I was incredibly surprised when I finally applied for it . I had no idea It was that generous .
State pension? You're talking about Canada.
I thought you sold your house and had more than a million dollars at your pocket. So the government pension is just for your basic living expense. The house money could be invested and the profit/interest could be used for your fun money in your retirement.
Real word that should be used is survive……and with rising prices for just about everything you need to use all the resources available….food banks, thrift stores for clothes, minimize drivingnif your lucky enough to have a car, shop the clearance racks in stores etc etc. So yes you cn survive, dont know if I would call it living though.
If I can explain to me how you can live on $17 a month which is the standard Canadian pension I would love to know because most of what they're saying is complete crap and I can prove it if anyone wants to know I can show them what you get
I’m alone. No, you can’t live on it. I have only a little saved up. I was forced into retirement by the provincial and federal governments. My income ended with losing my job and career. I am not living, I am just surviving on $1,600. I have no pension, no nothing. If I had $3,000 a month I’d be fabulous. You have two incomes not one.
New to your channel, thank you. I am born in Canada and lived there until I was 31 years old. So, I get a modified CPP and OAS plus US Social Security (I'm 72 years old). My issue is with the calculation of the annual CPP cost of living allowance (COLA). Based on current inflation Canadians are getting ripped off since no adjustment to CPP will be made until January 2023. With current galloping inflation many Canadians can't keep up. Question, have you or anyone you know challenged the Canadian government on the calculated cola (for 2022) or requiring the government to adjust CPP quarterly as opposed to annually?
Thanks for taking the time to discuss this with us!