Retirement can look perfectly affordable when the plan quietly assumes you will receive the biggest government pension available. Then the first deposit arrives, and the budget discovers it has been dating the marketing brochure rather than reality.
In 2026, the maximum Canada Pension Plan (CPP) retirement pension starting at 65 is $1,507.65 per month. Yet the average new age-65 recipient receives $877.01. Add the current maximum Old Age Security (OAS) payment of $751.97 for someone aged 65 to 74, and those two starting points produce very different retirements.
Source: Getty Images
The gap
Suppose a retiree needs $4,000 per month before tax. Someone receiving the maximum CPP and OAS would collect $2,259.62, leaving a monthly shortfall of $1,740.38, or $20,884.56 annually. Using a 4% initial withdrawal as an illustration, filling that gap could require a portfolio of approximately $522,000.
Replace the maximum CPP with the recent average, and government income falls to $1,628.98 per month. The shortfall grows to $2,371.02 monthly, or $28,452.24 annually. Supporting that withdrawal at 4% would require approximately $711,000. Ouch.
That is why the maximum CPP figure is a dangerous planning shortcut. Your benefit depends on contribution history, career earnings, and when payments begin. OAS can also differ because of residency history, start age, and income. The sensible move is to check personal estimates before building the retirement budget, not after ordering the celebratory patio furniture.
Income has a job
CPP and OAS are valuable because they provide indexed lifetime income, but they should form the floor rather than the entire house. I would first use them to cover essential expenses, including housing, groceries, utilities, and insurance. A workplace pension, Registered Retirement Income Fund (RRIF) withdrawals, and investment income can then fund the remaining essentials and discretionary spending.
The portfolio shouldn’t be one enormous pile of dividend stocks. Near-term withdrawals can sit in cash or a short guaranteed investment certificate (GIC) ladder; fixed income can reduce volatility, and diversified equities can provide the long-term growth needed to fight inflation. Choosing among Canadian retirement accounts also matters because TFSA withdrawals are tax-free, while RRIF withdrawals increase taxable income.
The growth layer
Tourmaline Oil (TSX:TOU) could occupy a small portion of that equity layer. Canada’s largest natural gas producer pays a $0.50 quarterly base dividend, equal to $2 annually. At recent levels, that produces a yield of approximately 3.3%.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| TOU | $60.09 | 166 | $2.00 | $332.00 | Quarterly | $9,974.94 |
A $10,000 investment would purchase 166 whole shares and generate $332 in annual base dividends. That averages $27.67 per month, although the regular payments arrive quarterly. Tourmaline stock has also paid special dividends, but I would treat those as bonuses for reinvestment or travel rather than money required to keep the lights on.
A balanced payment
Tourmaline stock generated $192.1 million of free cash flow during the second quarter of 2026. Net debt ended the period at $1.5 billion, below management’s long-term target and equal to approximately 0.4 times forecast 2026 cash flow. That financial flexibility helps protect the base dividend when natural gas prices become uncooperative.
Valuation is also reasonable rather than spectacular. One analyst’s fair-value estimate places Tourmaline stock at $65, roughly 8% above the recent price. The company’s diversified marketing and hedging can improve realized pricing, while export-linked contracts provide exposure to stronger international gas markets.
The risk is straightforward. Tourmaline stock remains a commodity producer, so cash flow and special dividends can shrink when gas prices weaken. That makes it a potential component of a diversified Canadian dividend portfolio, not a bond replacement or a solo retirement plan.
Bottom line
CPP and OAS create an invaluable income floor, but even the maximum payments can leave a five-figure annual shortfall. Start with personal benefit estimates, calculate the actual gap, and build several income layers around it. Tourmaline stock’s well-supported base dividend can help, while any special payment remains exactly what its name suggests: special, welcome, and absolutely not guaranteed.
