Maximizing Retirement Income

By Olev Edur

My husband retired at 63 (he’s now 67 and I’m 59) with what we thought would be enough savings to live comfortably. But with the cost of everything rising, we’re starting to see our plans for a comfortable retirement jeopardized, as we’re having to dip into our savings more often than we expected. My husband receives Canada Pension Plan and Old Age Security, and I have a small bakery business, but our total income is still less than $30,000. Are there any additional federal or provincial benefits to which we might be entitled? We live in Saskatchewan.

Unfortunately, there are no additional federal benefits available to you at present, but that will change when you turn 60. That’s because, given your combined income level, it’s likely that your husband also receives some Guaranteed Income Supplement (GIS) as part of his monthly Old Age Security (OAS) payment. For that reason, you should be eligible for the federal Allowance for spouses when you turn 60.

The amount you receive will depend on your total income at that time, as well as on how much of that income is from Canada Pension Plan (CPP), OAS, GIS, and your business, but assuming the total remains around $30,000, the added benefit could amount to almost $4,000 a year. And when you turn 65, you’ll become eligible for your own OAS benefit, which could amount to almost $8,000 a year, although you’ll no longer be eligible for the Allowance and your husband’s GIS may be reduced.

In addition, at age 60, you’ll be eligible to start collecting your own CPP if you’ve made contributions during your working career. If you’re still paying into this plan based on your business income, you’ll need to continue contributing as long as you continue working (until at least age 65), and the amount you receive will depend on your contributions to date. The added income will affect your husband’s GIS, but the net result is that this could represent considerable added income.

As for provincial benefits, it’s unlikely that you would be eligible for Saskatchewan’s Seniors Income Plan (SIP), although that will depend on the composition of your total income. The maximum monthly SIP benefit for couples in your circumstances is $300 a month, but that’s based on your taxable income (excluding OAS and GIS) being less than $10,512. I suspect that your husband’s CPP plus your business income would exceed that threshold, but you should double-check, just in case.

I doubt that either of you pays any income tax, given your total income, but if you do, there are a couple of tax measures that could enable you to reduce this liability to zero. For one thing, if your savings are still in an RRSP, you should move some of that money into a RRIF so that withdrawals are eligible for the $2,000 annual pension income credit.

And since pension income can be split between spouses, you could declare some withdrawals on your own tax return and thus get an additional $2,000 credit yourself. (This credit is “non-refundable”—that is, you can’t use it to get a cash refund once your tax payable is zero.) This should suffice to eliminate any tax, but you can also arrange to equally share your husband’s CPP benefits if more help is needed to reach zero tax.

Finally, there may be a few ways to stretch your existing income a little further. You’ll find some suggestions in the article “Coping With Inflation” in the October/November issue of Good Times.


Write to us at


Photo: iStock