This article, the fourth in a series, is about the projected income from public pensions. This series of blogs contains information about the landscape of retirement savings readiness for the average Canadian citizen in 2024-2025. In 2025, Canadians are presented with a complex financial market place marked by both progress and significant challenges.
Public pensions, namely the Canada Pension Plan (CPP) and Old Age Security (OAS), form a crucial component of Canada’s retirement income system, providing a foundational level of support for retirees. In January 2025, the maximum monthly CPP retirement pension payable at age 65 is $1,433.00, while the average monthly amount being paid to new retirees at age 65 is $899.67. For the OAS, the maximum monthly pension for individuals aged 65 to 74 in 2025 is $727.67. Combining the average CPP payout with the maximum OAS for this age group results in a total monthly income of approximately $1,627.34 before taxes. While this income provides a significant base, it may not be sufficient to cover all living expenses for many average earners, particularly in regions with higher costs of living, thus underscoring the importance of supplementing this income with personal retirement savings.
The figures for 2024 were similar, with the maximum monthly CPP benefit at age 65 being $1,364.60 and the average payout $831.92. The maximum monthly OAS payment for those aged 65 to 74 in 2024 was $713.34. These consistent figures highlight the general level of income retirees can anticipate from these public sources. It is also important to note that OAS benefits are subject to clawbacks for higher-income earners. For the 2025 income year, the OAS repayment threshold for individuals aged 65 to 74 is $93,454, meaning that benefits will be reduced for those with net world income exceeding this amount, and completely eliminated if income surpasses $148,451.00. This income-tested nature of OAS means that its value as a retirement income source diminishes for individuals with substantial income from other sources.
While the CPP and OAS provide a vital safety net, the gap between the maximum and average CPP benefits indicates that a significant number of retirees will receive less than the maximum, based on their individual contribution history. The average payout reflects the reality that many Canadians may not have consistently contributed the maximum amount throughout their working lives. Furthermore, the OAS clawback mechanism reinforces the need for individuals, particularly those with higher expected retirement incomes from personal savings or other sources, to plan accordingly and potentially rely less on OAS benefits.
| Benefit | Maximum Monthly Amount (2025) | Average Monthly Amount (Jan 2025) | Notes |
| CPP Retirement Pension (at age 65) | $1,433.00 | $899.67 | Based on lifetime contributions |
| OAS Pension (age 65 to 74) | $727.67 | N/A | Income-tested; repayment begins at $93,454 annual net income (2025) |
| OAS Pension (age 75 and over) | $800.44 | N/A | Income-tested; repayment begins at $93,454 annual net income (2025) |
My Role as Your Advisor
- Personalized Financial Planning:
I will work with you to create a comprehensive financial plan tailored to your specific needs and goals. - Investment Advice:
I can provide guidance on investment strategies, asset allocation, and risk management. - Retirement Projections:
I can use financial planning software to generate detailed retirement projections and stress-test their plan under various scenarios. - Regular Reviews and Adjustments:
I would conduct regular reviews of your plan and make adjustments as needed to ensure you stay on track. - Education and Support:
I would provide ongoing education and support to help you make informed financial decisions. - CPP and OAS information:
I would help you get the most accurate information available regarding your future CPP and OAS payments.
By providing clear and actionable advice, I can help you navigate the complexities of retirement planning and achieve your financial goals.
Contact me today at Ripple Effect Financial to get your financial plan started, allowing you to live happily through your retirement years.
