How to Bridge the Gap When CPP and OAS Won't Cover Your Expenses

How to Bridge the Gap When CPP and OAS Won’t Cover Your Expenses

Calculate the gap between your expenses and CPP benefits. Learn how CPP impacts your financial security in retirement.

Puja Tayal

Author Bio

Puja Tayal grew up in a small-business family where dinner conversations often centred on working capital and savings. Her early experiences with investing, particularly during the 2008 financial crisis, shaped her approach to understanding markets and evaluating investment opportunities. She began her career at a mutual fund company before moving into investor education and financial writing for asset and wealth management firms. Before joining The Motley Fool, Puja wrote for Market Realist, where she extensively covered the semiconductor industry. Her published work has also appeared in The Indian Express. Puja believes every stock has a story that can help investors understand its potential returns. She combines business analysis with different investing approaches to help investors make informed decisions and align their portfolios with their long-term financial goals. Outside of finance, Puja enjoys long drives, catching up with friends, watching superhero and science-fiction movies, and managing her family portfolio. She also has a keen interest in artificial intelligence and its potential to reshape the world.

Education

Bachelor's degree in Accounting and Finance, University of Mumbai (2007)
CFA Level I

Areas of Expertise

Qualitative company analysis, management strategy, risk assessment, long-term investing, portfolio diversification and rebalancing, dividend reinvestment, cyclical growth opportunities, compounding strategies, growth stocks, and dividend stocks.

Social Media Profiles

Favorite Investment Quote

"Risk comes from not knowing what you're doing." — Warren Buffett

Published April 6, 3:30 pm EDT

The Canada Revenue Agency (CRA) offers certain cash retirement benefits, such as Canada Pension (CPP) and Old Age Security (OAS), to help retirees meet their basic needs. These benefits are structured to cover your food, clothing, and utilities. If you are still living in a rented apartment or your medical bills are high, CPP and OAS won’t be enough to cover your expenses.

woman holding steering wheel is nervous about the future — Source: Getty Images

How much of expenses does CPP and OAS cover

The January 2026 average monthly CPP payout at age 65 was $925.35. The monthly OAS for the April to June 2026 period is $742.31 if your 2024 income is below $148,451.

Adding up the two benefits, a 65-year-old single Canadian can get $1,668.4 per month in retirement benefits.

You can look at your current expenditure and calculate the gap. Excluding rent, the gap between your expenses and CPP and OAS payouts could be in the range of $1,000–$1,500 per month.

How to bridge the $1,000 expense gap that CPP and OAS won’t cover

Retiring can be scary when you don’t have the savings to fall back on. Calculating your future retirement needs can help you build a retirement pool sufficient to fill the gap left by OAS and CPP. Considering a $1,000 monthly passive income as your end goal and the 5.5-6% average annual dividend yield, you can come up with the amount that should be there in your retirement pool.

A $200,000 portfolio that pays 6% annual dividend can fill the gap. If you have that much balance in your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP), you can consider SmartCentres REIT (TSX: SRU.UN) and Enbridge (TSX: ENB).

Hypothetically speaking, if you invested $100,000 in each of the two stocks, you would come close to the target of $12,000 in annual passive income.

Stock	Share Price	Dividend per Share	Dividend on $100,000 Investment	Number of Shares
SmartCentres REIT	$27.42	$1.85	$6,746.95	3647
Enbridge	$75.00	$3.88	$5,172.04	1333
Total			$11,918.99

SmartCentres REIT

SmartCentres REIT is in the middle of a large intensification project, wherein it is looking to convert shopping centres into city centres. Thus, its debt is on the higher side. It is using that money to build mixed-use facilities, sell most of them, and increase the market value of its store. This way, it is making optimum use of the land in and around the retail store, especially the underused parking space. It repays debt by selling the apartments and offices. The rental income continues to come from retail stores.

SmartCentres biggest tenant is Walmart, accounting for 23% of its rental revenue. This percentage has reduced over the years as the REIT has been adding new stores and diversifying tenants. It can be a reliable passive income provider as it has passed the test of time and managed to withstand the worst of the crises without dividend cuts. SRU.UN has a 21-year dividend-paying history.

Enbridge

Enbridge is an evergreen passive income stock. However, now may not be a good time to invest a lump sum as the stock trades at its all-time high amidst the energy shock. You could add it to your watchlist and buy it when the stock falls to $60–$65. When the stock has a dividend yield of 6% and above, that is the ideal time to buy.

Enbridge is focusing on increasing its natural gas infrastructure and is on track to bring US$8 billion worth of pipeline projects online. The toll money from these projects will help the company to accelerate its dividend growth rate to 5% in 2027 from the current 3%. This growth will help beat inflation.

How to invest to generate your personal pension

Investing $200,000 in one go may not be a good option. Even a TFSA’s cumulative limit is $109,000. If you still have five years to retire, consider maxing out on your TFSA contribution room first, as RRSP withdrawals are taxable and can claw back OAS if all your taxable income adds up to the threshold. You can invest in some growth stocks like Shopify to grow your TFSA portfolio and keep rebalancing profits into dividend stocks.