Retirement for New Canadians Part 2

In Tuesday’s blog I talked about the fact that there a very specific rules about how much you will get from OAS. Service Canada’s website suggests that you think of OAS as a pie that’s been divided into 40 equal portions. To get the full pension, you have to qualify for all 40 pieces. Less than 40 pieces? You may get some pension, but it’ll be less than the $6,000 a year you hear banded about.

The number of pieces of pie you get depends on how many years you’ve lived in Canada after the age of 18.  From here the formula gets really complicated. If you were born before 1952 special rules apply:

  • you must have lived in Canada in 1977, or had a residence in Canada for some period,
  • you must have had a valid immigration visa, AND
  • you must have lived in Canada for the 10 years prior to your OAS approval, unless you didn’t (see what I mean about complicated) in which case:
  1. you must have lived in Canada for the entire year before you approval AND
  2. you must have lived in Canada since the age of 18 for 3 years for every year you were away during these last 10 years . (Oy! My brain hurts!)

If there is one thing in your favour as a New Canadian it is that you already know how important it is to be self-reliant. You know life changes. You know you must have the foresight to plan for the unexpected. After all, that’s likely how you ended up in Canada to begin with. Something changed. And life won’t stop changing now that you’re here.

You must save. You must take control of your future by setting aside a little piece of everything you earn for the future. You likely have competing priorities. Most of us do. You want to make sure you give your family a nice place to live. You want to travel back to your homeland to maintain your connections with family and friends. You want to send money home to help those you’ve left behind.

You must also take care of YOU. Canada may offer more opportunity, but it is also a sad place if you are old and poor. If you are planning to return to your land of origin when you retire, you can take that into account in your planning, keeping in mind that any government pension you receive may be affected. If you’re planning to stay in Canada, you must ensure you have a stash of cash so you are able to take care of yourself.

2 Responses to “Retirement for New Canadians Part 2”

  1. I could imagine how difficult it can be for new Canadians to understand the government system. Hey, many long-time Canadians have misunderstandings of the system!

    My partner’s father came here in his mid-60s and worked in the kitchen of a restaurant till his early-70s. How many people can say that at age 70, they worked for minimum age in a restaurant kitchen for shift work!

  2. It’s worth looking into whether or not other countries you’ve lived in will still provide you with benefits. For example, if you worked in the UK before moving to Canada, contact their national insurance office – they may return any pension-related payroll deductions made to you.

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