Government Benefits (CPP/OAS)
Canada Pension Plan and Old Age Security are benefits paid by the federal government to those that are eligible. Depending on when the individual elects to take these benefits can affect how much they are eligible to receive. They may also be survivor benefits available in certain situations.
Pension Plans
Pension plans provided through your employment provide a steady income in retirement. Some plans may be indexed so that your income increases over time to stay ahead of inflation. A key benefit to a plan is the survivor benefit, so upon your passing your spouse may still receive a portion (or all) of the income. This must be reviewed to ensure the spouse will still have sufficient income if the plan holder does unfortunately pass away.
Retirement Assets (RRSPs/LRSPs)
RRSPs and LRSPs are investment accounts used by individuals in order to provide income in retirement. This money must be used carefully in order to mitigate taxes. Generally it is advisable to create a "paycheque" rather than taking large sums over time.
Cash Investments (Non-Reg/TFSA)
Money that was not saved in an RRSP above will be saved either in a non-registered account, or a TFSA. These accounts may be used to supplement retirement income, typically layered over the above sources to manage annual taxes.
Corporate Investments
Business owners may retire with money still invested within their corporation that can also be used for retirement income. In order to use corporate assets, care must also be taken as there are different strategies that are utilized to minimize the impact of taxes on the individual's overall finances.
Other Considerations
Retirement planning should also take a person's estate plan into account. The assets of the estate will all have different tax implications, including any of the income generating assets listed above. In order to maximize the estate, these assets must be used strategically.
