What income sources will you have in retirement?

As you plan for your retirement, you may hear others talk about the three-legged stool. This analogy means that most Canadians have three income sources in retirement.

First, do you know what each leg represents? The three sources include employer pension plans, government benefits, along with personal savings and investments.

Next, do you have a sense of what you can expect from each source when you retire? If not, let’s take a closer look at each category to make sure you haven’t forgotten anything.

1. Employer Pension Plans

You’re one of the lucky ones. For every 10 Canadians working today, only four belong to an employer-sponsored pension plan. Employer-sponsored pension benefits are not as common as they once were.

As a MEPP member, you and your employer contribute to the pension plan, which means you’re building a nest egg – providing you with a source of income when you retire.

2. Government Pension Programs

Fortunately, the Government of Canada provides benefits to be accessed once you reach certain age milestones. Only those 65 and over with low income may access the third benefit. The Government benefits include:

• Canada Pension Plan (CPP);
• Old Age Security (OAS); and
• Guaranteed Income Supplement (GIS).

To learn more about these Government pension benefits, including eligibility and how to apply, contact Service Canada, which provides you with a single point of access to government services and benefits. Visit www.servicecanada.gc.ca.

3. Personal Savings and Investments

And finally, the last leg of the three-legged stool is personal savings and investments. The scope of what falls into this category can vary from person to person. It may include such

• Savings accounts;
• Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs);
• Tax-Free Savings Accounts (TFSAs); and
• Equity from your home and/or other personal assets.

4. Working in Retirement

Although it sounds like an oxymoron, working in retirement has become a popular option for many. Some retirees work because they want to, while others work because they think their stool needs a fourth leg. When planning your retirement, you may consider another job as a potential source of income.

Here's the thing - everyone's three-legged stool looks different, which is okay. Yet, it's a good idea to review your projections to assess how sturdy your three-legged stool is so there are no surprises once you retire.

If you would like to learn more, we are here to help! Our Retirement Information Consultants are CERTIFIED FINANCIAL PLANNER® or QUALIFIED ASSOCIATE FINANCIAL PLANNER™ professionals and are available to help you and answer any questions you have. Feel free to contact them at 306-787-3170 or ric@plannera.ca.