Canadians typically draw retirement income from three pillars:

• Government benefits: Canada Pension Plan (CPP), Old Age Security (OAS), and the Guaranteed Income Supplement (GIS) for low-income seniors.
• Employer-sponsored plans: Registered pension plans (RPPs), group RRSPs, or deferred profit-sharing plans (DPSPs).
• Personal savings: Registered Retirement Savings Plans (RRSPs), Tax-Free Savings Accounts (TFSAs), non-registered investments, and home equity.

Tax treatment varies by income type:

• CPP, OAS, and RRIF/RSP withdrawals: Taxable as regular income.
• TFSA withdrawals: Completely tax-free.
• OAS clawback: High-income retirees may have to repay part of their OAS if their net income exceeds a certain threshold (e.g., $90,997 in 2025).

Timing your benefits can significantly impact your retirement income.

• CPP: You can start as early as age 60 or delay until age 70. Starting early reduces your monthly payment, while delaying increases it (by 0.7% per month after age 65).
• OAS: Available at age 65, but you can defer up to age 70 for a higher monthly amount (0.6% increase per month delayed).

Consider your health, life expectancy, and other income sources when deciding – a financial plan can help to visualize these effects.

A Registered Retirement Income Fund (RRIF) is a continuation of your RRSP into retirement.
You must convert your RRSP to a RRIF by the end of the year you turn 71.
RRIFs allow your investments to continue growing tax-deferred, but you must begin withdrawing a minimum amount each year, which is taxable.
You can withdraw more than the minimum, but excess withdrawals may affect OAS eligibility and increase your tax burden.

There are several strategies to help minimize taxes in retirement:

1. Split pension income with a spouse or common-law partner to reduce your combined tax bill.
2. Withdraw from RRSPs strategically before age 71 to smooth out taxable income over time.
3. Consider deferring CPP and OAS to reduce taxable income in early retirement years.