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Retirement is something most of us look forward to, but it also comes with big questions—especially about money. One of the most common questions people ask is: How much income do Canadian retirees actually live on? In 2025, the answer depends on several things like government benefits, savings, pensions, and where someone lives.

Average Retirement Income in Canada in 2025

As of 2025, the average income for a retired person in Canada is around $34,000 to $45,000 per year. This includes all sources of income like the Canada Pension Plan (CPP), Old Age Security (OAS), Guaranteed Income Supplement (GIS), private pensions, registered savings, and even part-time work.

That range can vary a lot depending on the person’s financial situation. Some retirees live on just CPP and OAS, which together might only bring in around $18,000 to $22,000 a year. Others with company pensions or strong personal savings might earn $50,000 or more.

For couples, the combined income is usually higher. Two people receiving full CPP and OAS could bring in $40,000 to $45,000 together, before any other savings or pensions are added.

How Much Do Most Canadian Seniors Live On?

While averages give us a good idea, they don’t tell the whole story. Many Canadian seniors live on much less than the national average. About 30% of seniors rely almost entirely on government benefits like CPP, OAS, and GIS. That means many live on less than $25,000 a year—and they still find ways to manage.

It’s not always easy, though. Rising housing costs, groceries, and other day-to-day expenses mean many retirees need to budget carefully. That’s especially true for single seniors or those without a workplace pension.

The Role of Homeownership in Retirement

One major reason many retirees are able to get by on lower incomes is because they own their homes. In fact, as of 2025, about 75% of Canadian seniors are homeowners. That means they’re not paying rent or a mortgage, which takes a huge weight off their monthly budget.

Homeownership makes a big difference in retirement. A retired renter in a city like Toronto or Vancouver might need double the income of a homeowner to cover the same lifestyle. That’s why a lot of financial experts say: if you can own your home by retirement, you’ll have a much easier time living on a modest income.

Some homeowners also use the equity in their homes by downsizing, getting a reverse mortgage, or opening a Home Equity Line of Credit (HELOC) to supplement their income. These tools aren’t for everyone, but they can help make retirement more comfortable.

Minimum Income for a Comfortable Retirement

Comfort means different things to different people. But as a general rule, many experts say you need about 70% of your pre-retirement income to maintain the same standard of living. So if you made $60,000 a year before retiring, you might need around $42,000 per year in retirement.

In reality, many retirees make less than that and still get by just fine—especially if their home is paid off, they don’t travel a lot, and their kids are grown. A basic comfortable retirement in Canada in 2025 often means at least $30,000 to $40,000 a year, or more if you’re still renting or living in a major city.

Here’s a simple example:

$15,000 to $18,000 from CPP and OAS

$5,000 to $8,000 from GIS (if eligible)

$10,000 to $15,000 from a private pension or savings

This adds up to a basic but comfortable income for many Canadian seniors.

Canada Pension Plan (CPP)

The Canada Pension Plan (CPP) is one of the biggest sources of retirement income in Canada. In 2025, the average CPP payment is about $772 per month, or roughly $9,270 per year. But if you worked and contributed the maximum during your working years, you could get as much as $1,364 per month, or $16,368 per year.

Most people don’t get the maximum because they didn’t earn or contribute enough. Still, CPP makes up a big part of retirement income for many Canadians. You can start CPP as early as age 60, but you’ll get more if you wait until age 65 or even 70.

Old Age Security (OAS)

Old Age Security (OAS) is another monthly benefit from the federal government. Unlike CPP, it’s based on how long you’ve lived in Canada—not how much you worked or contributed. In 2025, the maximum OAS payment is about $713 per month, or $8,556 per year.

Most Canadians get close to the full amount by age 65, but some may receive less if they haven’t lived in Canada for at least 40 years after age 18. You can also delay OAS until age 70 to get higher monthly payments.

Together, CPP and OAS might give the average retiree around $17,800 per year—a decent base, but not enough for most people to live on by itself.

Guaranteed Income Supplement (GIS)

For retirees who have very little income other than OAS, the Guaranteed Income Supplement (GIS) can help. It’s a monthly benefit that tops up your income if you qualify. In 2025, the maximum GIS for a single person is around $1,065 per month, or $12,780 per year.

Not all seniors get GIS—only those with low or no other income qualify. But for those who do, it can boost their total retirement income to over $30,000 when combined with CPP and OAS. That’s often enough to cover basic living costs, especially in smaller towns or for those who own their home.

What Percentage of Seniors Have a Private Pension?

A big factor in how comfortable your retirement will be is whether you have a private pension. This could be a workplace pension, like a defined benefit (DB) or defined contribution (DC) plan, or personal savings in a Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA).

In 2025, about 37% of Canadian seniors receive income from a workplace pension. That number has been slowly declining over time, especially in the private sector. Public sector workers are more likely to have pensions, and those pensions tend to be more generous.

If you don’t have a workplace pension, it’s extra important to save on your own through RRSPs, TFSAs, or other investments to help close the income gap in retirement.

Does Retirement Income Differ by Province?

Yes, the average retirement income varies across Canada. That’s mostly because the cost of living is different depending on where you live. For example:

Ontario and British Columbia often have higher retirement incomes, but they also have higher housing and living costs.

Quebec tends to have slightly lower average retirement income but also more social programs and lower housing costs.

Atlantic provinces and the Prairies may have lower incomes overall, but the cost of living is usually more manageable.

A retiree in Halifax or Winnipeg might live comfortably on $30,000 a year, while someone in Toronto or Vancouver might need $45,000 or more just to cover the basics.

How Much Should You Save for Retirement?

If the average retirement income in Canada is between $34,000 and $45,000 per year, how much do you need to save to hit that target?

Let’s assume you’re already going to get a combination of CPP and OAS, which might give you about $17,800 per year if you’ve contributed regularly and lived in Canada long enough. That means you’ll need to cover the gap—let’s say between $15,000 to $25,000 per year—from other sources like savings, private pensions, or investments.

Here’s a quick rule of thumb:

Most financial experts suggest using the “4% rule” for retirement planning. This means that you can safely withdraw about 4% of your savings each year without running out of money for at least 25–30 years.

So, to get $20,000 per year in retirement income, you’d need about:

$20,000 ÷ 0.04 = $500,000 in retirement savings

This amount could come from:

RRSPs

TFSAs

Company pensions

Non-registered investments

If you don’t have a pension, it’s even more important to build these savings during your working years. And remember, this is just a rough guideline. If you plan to retire early, you’ll need more. If you own your home and don’t spend a lot, you might need less.

How Retirement Income Changes Over Time

One thing to keep in mind is that your income needs—and sources—might change as you age. Many retirees spend more in the first 5 to 10 years of retirement while they’re still active and healthy. Travel, hobbies, and helping adult children are common expenses.

But later on, spending often drops as people slow down and focus more on health and home life. Medical costs can rise, but other expenses like transportation, entertainment, and clothing usually go down.

Government benefits like OAS and CPP are adjusted for inflation each year, which helps keep your income somewhat stable. Still, it’s a good idea to build a flexible retirement plan that accounts for both higher and lower spending years.

Is Retirement Income Taxable in Canada?

Many people forget that retirement income is still taxed. CPP, OAS, RRSP withdrawals, and most pensions count as taxable income. Only TFSA withdrawals are tax-free. That means your actual spending money might be lower than what’s on paper.

OAS can also be “clawed back” if your income is too high. In 2025, if your income is over about $90,000, the government starts to reduce your OAS payments. For most people, this isn’t a problem—but it’s worth knowing about if you have a high income from savings or property.

Planning your withdrawals in a tax-smart way can help you keep more of your money. For example, mixing RRSPs with TFSAs, and spreading withdrawals evenly, can reduce your tax bill.

Planning for a Stable Retirement in Canada

So what’s the big takeaway here? Most Canadians retire with less income than they had during their working years—but many still live well, especially if they plan ahead.

Here’s what can help make retirement more secure:

Own your home by the time you retire, if possible

Maximize CPP and OAS by contributing regularly and considering deferral

Save in RRSPs and TFSAs to top up your government benefits

Build a simple retirement budget and review it regularly

Talk to a financial advisor about taxes, investments, and withdrawal strategies

Whether you're just starting to save or already close to retirement, knowing what to expect can help you make smarter decisions. The average income of a retired person in Canada may be around $34,000 to $45,000 in 2025—but what matters most is building a retirement that works for your life, your goals, and your peace of mind.