Factors to consider before applying for your retirement pension

Should you apply sooner or later for your retirement pension under the Québec Pension Plan? For certain people, it is advantageous to apply for this pension at age 60. For others, it may be more advantageous to apply later. To determine what is most beneficial to you, there are a number of personal factors to consider.

5 general factors:

Make sure that your retirement pension under the Québec Pension Plan, your Old Age Security pension, your pension plan and your personal savings are sufficient to maintain your standard of living in retirement. It is better to postpone when you leave the labour force and when you apply for your retirement pension under the QPP until you are sure that your financial assets or your pensions are sufficient to meet your needs for the rest of your life. Think about it, you could be retired for 30 years!

If you are in good health, have healthy life habits and do not have any hereditary predisposition that could reduce your life expectancy, you would benefit, in most cases, from postponing your application for a retirement pension under the QPP. On the other hand, if you have health problems that reduce your life expectancy, you would benefit from applying for your pension at an earlier age.

Taxation has a significant impact on your income. For example, the taxes you will have to pay on your employment earnings could be higher if you receive your retirement pension and continue working (higher marginal tax rate). This could reduce the net income that you will receive from working.

If you expect to be eligible for the Guaranteed Income Supplement This link will open in a new window. (GIS) offered by the Government of Canada at age 65, it could be advantageous for you to apply for your retirement pension under the QPP at an earlier age given that, even if your pension amount is reduced, part of the reduction will be compensated by the GIS. Therefore, the amount of income you will receive throughout your retirement could be higher. Please note that your spouse's income is taken into account in the calculation of the GIS amount and you may not be entitled to it even if your personal retirement income is modest.

If you have personal retirement savings, it could be wise to postpone your application for a retirement pension under the QPP. Your personal retirement savings could be used to meet your needs during the first months or years of your retirement, before receiving your pension under the QPP. By waiting longer, you will obtain an increased amount and you will increase, for the rest of your life, the part of your future income, which is for life, guaranteed and fully indexed based on inflation.

Applying for your retirement pension: an important decision!

The retirement pension under the Québec Pension Plan (QPP) is part of the 3 sources of retirement income:

  • The Government of Canada's Old Age Security program
  • the Québec Pension Plan 
  • workplace pension plans and personal savings.

The age at which you choose to start receiving it is a decision that will influence your income for the rest of your life.

To help you make the best decision, a number of options are available to you:

  • Use the SimulR tool to calculate your retirement saving needs, and to obtain an estimate of the amount of your retirement pension under the QPP according to different scenarios based on age.
  • Use the CompuPension tool to obtain an estimate of the value of your retirement pension under the QPP between ages 60 and 70, based on the contributions that you made to the QPP.
  • Consult or ask for your Statement of Participation.
  • Consult a financial planner. When the time is right for you to apply for you retirement pension, use My Account.
New notification service. Follow the progress of your application for a retirement pension under the QPP by text message or email. Start My Account.

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