Getting the maximum Canada Pension Plan (CPP) retirement benefit at 65 requires hitting specific income thresholds throughout most of your working years. The targets have become more complex with CPP enhancements now in place.
For 2025, you need to earn at least $71,300 annually to maximize base CPP contributions. This threshold is known as the Year’s Maximum Pensionable Earnings (YMPE).
So, any income above this level doesn’t boost your base CPP benefit. However, a second tier now exists with the enhanced CPP program, as earnings between $71,300 and $81,200 trigger additional contributions that build toward a larger future pension.
To qualify for maximum benefits at 65, you generally need strong earnings in at least 39 of the 47 years between ages 18 and 65. The system includes a dropout provision that removes approximately eight years of your lowest earnings from calculations.
This means occasional low-income periods won’t necessarily hurt your eventual pension as long as you maintain YMPE-level earnings in the remaining years.
A 65-year-old starting the CPP can receive a maximum base pension of $16,645 annually. Driven by the CPP enhancement, future Canadian retirees who earn at the above-mentioned income ceilings throughout their careers will see higher maximum payouts.
However, retirees should aim to supplement their CPP payouts with other income sources. One low-cost way to begin a passive-income stream is to invest in quality dividend stocks such as Pembina Pipeline (TSX:PPL).
Hold this blue-chip dividend stock and supplement the CPP
Pembina Pipeline provides energy transportation and midstream services across North America through three main segments.
- The Pipelines segment operates conventional, oil sands, and heavy oil assets with a combined capacity of three million barrels per day, plus ground storage and rail terminals.
- The Facilities segment offers infrastructure for crude oil, natural gas, and natural gas liquids processing, including fractionation, cavern storage, and a liquefied propane export facility.
- The Marketing and New Ventures segment buys and sells hydrocarbon liquids and natural gas from Western Canadian and other basins.
In the third quarter (Q3) of 2025, Pembina Pipeline reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $1.034 billion, an increase of 1% year over year. The energy infrastructure company also narrowed its full-year guidance to $4.25 billion and $4.35 billion. Pembina remains on track to meet its original 2025 targets while executing multiple strategic initiatives across its integrated value chain.
Pembina recently signed a 20-year agreement with PETRONAS for one million tonnes per annum of liquefaction capacity, expanding beyond its previous 1.5 million ton commitment. The company expects to finalize contracts for the remaining 0.5 million tons of capacity by year-end.
Pembina achieved major recontracting successes across its conventional pipeline network, signing new transportation agreements on the Peace Pipeline system for approximately 50,000 barrels per day, with a weighted-average term of 10 years.
Notably, 100% of these volumes fall within areas served by competitive alternatives, yet Pembina maintained current contracted tolls on essentially all volumes through operational efficiencies and superior service offerings.
Pembina Pipeline pays shareholders an annual dividend of $2.83 per share, which translates to a forward yield of over 5.3%. The TSX energy stock has raised its annual dividend from $1.90 per share in 2016 and is forecast to increase it to $3.11 per share in 2029.
Given consensus price targets, Pembina stock trades at a 10% discount. If we adjust for dividends, cumulative returns could be closer to 15% over the next 12 months.
