When adults make retirement plans, one of the most critical aspects of the planning process is to ensure that their finances are in order. Knowing how much they can afford will make the transition to retirement living much smoother.
While some older adults can pay for their retirement-related expenses solely from savings and supplementary income, many more require financial assistance to cover all their bills.
Fortunately, many financial options are available for Canadian retirees through the Government of Canada (GoC), providing various benefits. We’ll review these options below.
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Financial aid options for retirement living
There are several expenses involved in retirement living. While most communities include their amenities and services in the rent price, depending on the level of health care and assistance you require, you may have to pay additional fees.
However, by taking advantage of the financial aid options available for older adults, you may not have to spend as much money as you think.
Below, we’ll review a few government plans, programs, and benefits open to older adults who may not have as much money set aside for retirement as they would like.
Canada Pension Plan (CPP)
The Canada Pension Plan is likely one of the first financial aid options that comes to mind for older adults. The Canada Pension Plan acts as a form of income that you receive monthly, replacing a portion of your earnings when you retire. Older adults who qualify for this plan will receive a pension for the rest of their life, which can provide peace of mind to older adults and their loved ones.
To qualify for the Canada Pension Plan, you must meet the following criteria:
- You must be 60 years of age (or older).
- You must have made at least one valid contribution to the Canadian pension plan in the past. This money can be from a job you had with a Canadian employer or credits you received from your spouse or common-law partner.
Note that to benefit from the CPP, you must apply manually. Make sure to use it well before you wish your plan to start. Once you’ve applied, you should receive your first payment within one month of your selected start date.
The amount of money you receive each month will be based on your average income throughout your working years, along with the age you were when you began contributing to your CPP and how much you’ve added to the CPP.
Guaranteed Income Supplement
The Guaranteed Income Supplement (GIS) is a monthly rebate provided to older adults who meet the following qualifications:
- You are at least 65 years of age or older
- You live in Canada
- You are receiving the OAS pension plan (which we’ll touch on below)
- Your personal income doesn’t exceed the maximum annual income threshold
It’s important to note that unlike some of the other options mentioned in this list, the Guaranteed Income Supplement isn’t considered taxable income.
To start receiving these payments, wait for the GoC to mail you a letter informing you when you’re eligible. This letter is generally sent a month or so after your 64th birthday. However, if you don’t receive this letter in the mail, you might need to apply for this program manually.
Old Age Security
Old Age Security is another pension plan that you receive monthly. This plan is available to older adults 65 or older, and in most cases, you don’t need to apply for it manually.
However, if Service Canada doesn’t have enough of your personal information to file the OAS application, you might have to apply for this plan yourself.
The amount of money older adults will receive from the OAS plan will depend on their average income over the years, along with how long they have resided in Canada or other countries beyond the age of 18.
Alberta Seniors Benefit (AB residents only)
Older adults living in the province of Alberta should take a moment to learn about the Alberta Seniors Benefit. The Alberta Seniors Benefit is available to older adults from lower-income households transitioning into retirement.
To qualify for this benefit, older adults must meet the following criteria:
- You must be at least 65 years of age or older
- You must be a resident of Alberta for a minimum of three months before sending in an application
- You must be a Canadian citizen or a permanent resident
- You are receiving the Old Age Security benefit from the GoC
- You meet the financial qualifications
Older adults new to Alberta should note that their eligibility for this benefit will kick in after turning 65 or the month after their 3-month permanent residency period.
Unfortunately, if you haven’t begun receiving the Old Age Security benefit when you qualify or have decided to delay your application, you are not eligible to receive this provincial benefit.
Older adults in Alberta can apply for this benefit by completing the Senior’s Financial Assistance application.
Final thoughts
Older adults looking to move into a retirement community have quite a few options for financial aid, including many others not mentioned on this list! We encourage you to review these options with a loved one or a financial advisor to understand better which plans and benefits they qualify for.
Once you have your financial aid in place, you can search for a retirement community that best suits your needs and enjoy a well-earned period of rest and relaxation in your new home without any added financial stress.
