Retirement Planning for Employees

When thinking about retirement, it can be overwhelming to figure out all the numbers, like what age you’re going to retire, how much money you need and how long do you need the money to last.

We’ve put together an infographic checklist that can help you get started on this. We know this can be a difficult conversation so we’re here to help and provide guidance to help you achieve your retirement dreams.

Income Needs

  • Determine how much you need in retirement.

  • Make sure you account for inflation in your calculations


  • If you have any debts, you should try to pay off your debts as soon as you can and preferably before you retire.


  • As you age, your insurance needs change. Review your insurance needs, in particular your medical and dental insurance because a lot of employers do not provide health plans to retirees.

  • Review your life insurance coverage because you may not necessarily need as much life insurance as when you had dependents and a mortgage, but you may still need to review your estate and final expense needs.

  • Prepare for the unexpected such as a critical illness or long term care.

Government Benefits

  • Check what benefits are available for you on retirement.

  • Canada Pension Plan- decide when would be the ideal time to apply and receive CPP payment. (Payment depends on your contributions)

  • Old Age Security- check pension amounts and see if there’s a possibility of clawback.

  • Guaranteed Income Supplement- if you client have a low income, you could apply for GIS.


  • Review your company pension plan. Check if it’s a defined benefits or contribution plan. Determine if it makes sense to take the pension or the commuted value.

  • Make sure you are saving on a regular basis towards retirement- in an RRSP, TFSA, LIRA or non-registered. Ensure the investment mix makes sense for your situation.

  • Don’t forget to check if there are any income sources.  (ex. rental income, side hustle income, etc.)


  • Are you planning to use the sale of your home or other assets to fund their retirement?

  • Will you be receiving an inheritance?

One other consideration that’s not included in the checklist is divorce. This can be an uncomfortable question, however divorce amongst adults ages 50 and over is on the rise and this can be financially devastating for both parties.

Next steps…

  • Contact us about helping you get your retirement planning in order so you can gain peace of mind that your family is taken care of.

How the Pension Income Tax Credit can benefit you

You work hard for your money. You want to keep every penny of it that you can, especially when you’re approaching your retirement years!

One of the ways you can do this is through the Pension Income Tax Credit.  Even if you’re still actively working, there are several ways you can take advantage of this tax credit.

What is the Pension Income Tax Credit?

The Pension Income Tax Credit enables anyone 55 and up to save on their taxes. Anyone who qualifies for it can apply for a tax credit on their first $2,000 pension income.

To qualify for the Pension Income Tax Credit, you must be:

  • 55 or older (however, you must be 65 or older to have a broader range of income qualify)

  • Earning income that qualifies as pension income

The Pension Income Tax credit is non-refundable, and you cannot carry it over.

What does the government consider eligible pension income?

That depends on your age.

If you are over 55 but below 65, then only the following count as pension income:

  • Annuity income you receive due to the death of your spouse – for example, from an RRSP, RRIF, or a DPSP.

  • Income from a superannuation, Canadian pension plan, and certain foreign pensions

  • Income received from splitting pension income

If you are 65 or over, then all of the following count as pension income:

  • Income from a Registered Retirement Income Fund (RRIF), Life Income Fund (LIF) or Locked-in Retirement Fund

  • Income from a superannuation or pension fund

  • Annuity income from an RRSP or a Deferred Profit-Sharing Plan (DPSP)

  • Income received from splitting pension income

  • Interest from regular annuities

  • Income from foreign pensions

  • Interest from a non-registered GIC offered by a life insurance company

How can I take advantage of the tax credit?

Even if you are still actively working at 65, it makes sense to take advantage of the Pension Income Tax Credit.

Here are four ways you can do it if you are not part of a pension or superannuation plan.

  • Open a RRIF. Put $12,000 into it from your RRSP. You can then take out $2000 each year tax-free from it.

  • Transfer money from a LIRA to a LIF. As with the RRIF, you can withdraw up to $2000 each year tax-free.

  • Purchase a GIC through a life insurance company. To claim the full credit, you’ll have to invest enough that you would earn $2,000 in interest each year.

  • Transfer the credit to a spouse if you cannot use it.

The Takeaway

Even if you are still working at 65, it makes sense to take advantage of the Pension Tax Income Credit. There are a variety of ways to bring extra income into your life tax-free! Contact us or your tax advisor for more information about how to get started.