Are you retiring in Canada in 2025? It’s a bit of a tricky time! Prices for everyday things are going up. Global trade isn’t always smooth sailing. These things can squeeze your budget. But hey, there’s some good news, too! Our government has made some changes to retirement programs, like the Canada Pension Plan (CPP), Old Age Security (OAS), and the Guaranteed Income Supplement (GIS). Knowing about these updates is key to keeping your finances on track. Plus, spreading investments around can help protect you when the economy gets a bit bumpy.
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The changes
Let’s talk about the CPP first. In 2025, CPP made some improvements to help boost your retirement income. The most you can get monthly as a new retiree is now $1,433. That’s a nice 2.7% bump from last year! This is part of a bigger plan to increase how much of your average earnings the CPP replaces when you retire. The government now aims to go from 25% all the way up to 33.33%. Also, if you decide to wait past age 65 to start getting your CPP, your payments will increase by 0.7% for each month you hold off. You can wait up to age 70, and that could mean a total increase of 42%.
Now for the OAS program where things have changed too. As of writing, if you’re between 65 and 74, you could get up to $727.67 each month. If you’re 75 or older, that could go up to $800.44. These amounts aren’t set in stone forever, getting reviewed every three months and adjusted based on the Consumer Price Index (CPI). That way, the government tries to keep up with the cost of living. Just like with CPP, you can choose to delay getting your OAS payments past age 65. For each month you wait, your payments will increase by 0.6%, up to a maximum of 36% if you wait until age 70.
The GIS is there to give extra help to seniors with lower incomes who are already getting OAS. For April to June 2025, the most a single person could get each month is $1,086.88. Whether you’re eligible and how much you get depends on your income and if you’re married or single. For example, if you’re part of a couple and one person gets the full OAS, but the other doesn’t, their combined income needs to be below $52,848 to qualify for GIS. These extra payments can be really important for seniors who don’t have a lot of other income coming in.
Where to invest
Given how the economy is right now, it can be a good idea to spread your investments around. This can help protect you if the Canadian market has some ups and downs. That’s where Vanguard FTSE Global All Cap ex Canada Index ETF (TSX: VXC) comes in. It lets Canadian investors invest in a whole bunch of companies in other countries.
As of writing, VXC is trading at around $60 per share, and it’s a pretty big fund worth about $2.24 billion. The exchange-traded fund (ETF) also has a dividend yield of 1.48% and a low expense ratio of 0.22%. That means it’s a pretty cost-effective way to get some global diversification. By investing in VXC, retirees can tap into growth opportunities outside of Canada, which could help their retirement savings grow even more and get in on the action on the world stage.
Bottom line
So, if you’re a Canadian retiree in 2025, it’s important to stay in the loop about any changes to CPP, OAS, and GIS. Adjusting your retirement plans to take these updates into account and maybe thinking about diversifying your investments with something like VXC can help you stay financially stable. And remember, talking to a financial advisor can give you personalized advice on how to make the most of your retirement income and investment choices. They can help you create a plan that fits your specific situation!
