Updated: Apr 17
The following are the major ways that Canadians can save for retirement:
- Defined benefit or defined contribution pension plan - if your employer provides you with this then you are part of the fortunate 37% of Canadians. These are the best plans available as the employer pays into it and helps save for your retirement.
- RRSP - when you put money into an RRSP you get a tax rebate and tax deferral on the returns of the invested money. This is the most popular way to save for retirement and works best when your tax rate is more in your working years than in retirement
- TFSA - the money in your TFSA grows tax-free. When you withdraw it in retirement it does not affect your means-tested benefits (like OAS).
- CPP - when you contribute to CPP during your lifetime you then receive a pension from the Federal government. It can start at 60 or as late as 70.