Retiring doesn’t mean that you stop being active. Quite the contrary. And it doesn’t mean that you should apply for your Quebec Pension Plan (QPP) benefits right away. The pension you receive depends on your contributions to the plan and your age. Is it worth waiting a few years to get a higher payment? Read on for the answer.
Anyone who has contributed to the Quebec Pension Plan (QPP) for at least one year. Since contributions are compulsory, that means just about anyone who receives a salary in Quebec contributes.
Who contributes to the Quebec Pension Plan?
All workers, who:
Want to know how much you’ll get?
Every four years, you should receive a statement of participation from Retraite Québec (formerly known as the Régie des rentes du Québec). This document shows how much you’ll be entitled to if you apply for the QPP at 60 or 65 years of age. You can also consult it online in the My Account service and choose to receive digital statements.
Be sure to read our article, “How much should you save for your retirement?”
Did you work in another province?
You likely paid into the Canada Pension Plan (CPP). In that case, Retraite Québec will calculate how much you’re entitled to considering your contributions to the CPP.
No longer live in Quebec or elsewhere in Canada?
You’re still entitled to a pension if you contributed to the QPP.
However, if you’re deemed disabled by Retraite Québec before age 65 and you have contributed enough to the QPP, you’ll be eligible for the Quebec Pension Plan disability pension.
You have several options. If you apply for your QPP pension:
The amount of the QPP pension changes depending on the age you start collecting it. But that’s not all. It also changes according to the number of years you contributed to the plan and your employment income when you were contributing.
If you apply for your pension at 60, it will be reduced by 0.5% to 0.6% for each month until you turn 65. That penalty adds up quickly:
After 1 year: your pension will be reduced by about 7.2%
After 5 years: your pension will be 36% lower
However, taking the QPP pension early can be justified in some situations. For example:
At death: Your spouse could be entitled to the surviving spouse's pension.
Our advisors can help you plan your retirement.
There are at least three good reasons to wait until you’re 65 or older to apply for your pension:
Even though you can apply for your pension as of 60, most people would be wise to wait a while before they apply, because it’s generally more beneficial to apply for it after 65.
Your amounts at a glance
Retraite Québec offers you a table of your maximum monthly pension based on your age. Even if you’re not applying for your pension right away, you can consult My Account at Retraite Québec to get an estimate of the amounts you’ll receive.
A word of advice to get the most from your Quebec pension: consult a financial planner for help determining the best option for your retirement.
Retiring gradually. You can claim your retirement pension at 60 and still work part-time or full-time. In this case, you’ll receive your pension and continue to contribute to the Plan (if your earnings exceed $3,500).
You’ll then be entitled to the retirement pension supplement. The supplement is automatically added to your pension the year after you contribute. The supplement is added to your pension for the rest of your life and will continue to increase each year you work.
This could add up for anyone who decides to go back to work.
You won’t receive your pension automatically, you have to apply for it through Retraite Québec. Plan to apply 1 to 3 months before the date you want to begin receiving your pension.
Payment frequency: the QPP pension is paid on the last business day of every month. If you sign up for direct deposit in your QPP file, payment will be made directly into your bank account.
Do you live outside Canada?
In some countries or territories, your pension can be paid via direct deposit in the local currency. Do you live in Mexico or the United States and would like your pension paid in Mexican pesos or U.S. dollars? No problem. Look at the list of locations for international direct deposit.
Online tools can help you make an informed decision:
Be sure to carry out a few simulations with your financial planner too before you apply for your Quebec pension.
Did you change your mind?
You have 6 months from the date of your first pension payment to cancel your request. That’s it, only 6 months. After this time and regardless of your age, your decision cannot be reversed. So it’s an important decision to make when planning your retirement finances.
The QPP pension isn’t the only source of income from governments. There’s also:
When combined with other retirement plans (like RRSPs or the TFSA), government benefits like the QPP retirement pension can help you reach your retirement goals. Because the age at which you apply for some benefits can affect their amount, be sure to consult specialists to make choices that are right for you.
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