Are you planning to retire in Canada in 2025?
While the rising cost of living and global trade uncertainties may create financial challenges, there’s good news: significant updates to Canada’s retirement programs, including the Canada Pension Plan (CPP), Old Age Security (OAS), and Guaranteed Income Supplement (GIS), are designed to support retirees.
In addition, diversifying your investments could help safeguard your financial future amid an unpredictable economy.
Changes to the Canada Pension Plan (CPP)
In 2025, the Canada Pension Plan (CPP) has seen improvements aimed at increasing your retirement income. As a new retiree, you could receive a maximum of $1,433 per month—a 2.7% increase from the previous year.
This adjustment is part of a broader government initiative to increase the CPP replacement rate from 25% to 33.33% of your average earnings.
For those who choose to delay receiving CPP benefits beyond age 65, there’s good news: for every month you wait, your payments will increase by 0.7%. If you wait until age 70, you could see an overall 42% increase in your monthly payments.
Changes to Old Age Security (OAS)
The Old Age Security (OAS) program also has important updates. If you’re between 65 and 74, you could receive up to $727.67 per month.
If you’re 75 or older, this amount could increase to $800.44. These payments are subject to quarterly reviews and adjustments based on the Consumer Price Index (CPI) to keep up with inflation and the cost of living.
Similar to CPP, you can delay your OAS payments past age 65. Each month you wait will result in a 0.6% increase in your payments, which could accumulate to a 36% increase if you defer until age 70.
Guaranteed Income Supplement (GIS) for Low-Income Seniors
For low-income seniors already receiving OAS, the Guaranteed Income Supplement (GIS) offers additional support. From April to June 2025, single seniors could receive up to $1,086.88 per month. The eligibility for GIS and the amount you receive depends on your income and marital status.
For example, if you’re part of a couple and one person receives the full OAS, but the other doesn’t, the combined income needs to be below $52,848 for GIS eligibility. These payments are crucial for seniors with limited financial resources.
Diversifying Your Investments
Given the current economic climate, it’s wise to diversify your investments. Spreading your funds across different sectors and regions can reduce risks and protect you from the volatility of the Canadian market.
One option is the Vanguard FTSE Global All Cap ex Canada Index ETF (TSX: VXC), which provides Canadian investors exposure to international markets. Currently priced at around $60 per share, this $2.24 billion fund offers a 1.48% dividend yield and an expense ratio of just 0.22%, making it an efficient way to diversify globally.
Investing in VXC can help retirees access growth opportunities outside of Canada, enhancing their retirement savings and expanding their global exposure.
If you’re retiring in Canada in 2025, it’s essential to stay informed about the changes to CPP, OAS, and GIS. Adjusting your retirement strategy to incorporate these updates, while also diversifying your investments with options like VXC, can help maintain your financial stability. Consider consulting with a financial advisor to develop a retirement plan tailored to your unique circumstances and goals.
The retirement landscape in Canada is evolving, and staying up to date on these critical changes can help you better prepare for your future.
By taking advantage of the Canada Pension Plan, Old Age Security, and Guaranteed Income Supplement updates, along with diversifying your investments, you can ensure a more secure and comfortable retirement.
FAQs
How much can I expect to receive from the CPP in 2025?
As a new retiree, the maximum monthly payment you could receive is $1,433, which is a 2.7% increase from the previous year.
Can I increase my OAS payments?
Yes, if you choose to delay receiving your OAS payments after age 65, your monthly payments will increase by 0.6% per month. By waiting until age 70, you could receive a 36% higher payment.
What is the GIS and how can I qualify?
The Guaranteed Income Supplement (GIS) provides additional support for low-income seniors receiving OAS. Eligibility depends on your income and marital status. For example, a couple’s combined income must be below $52,848 to qualify for GIS.