Choose your pension option
This important decision will determine the amount of your lifetime monthly pension payments and the amount your spouse or beneficiaries may receive when you die.
Temporary annuity option
If you retire before age 65, you may choose a temporary annuity to top up your pension. A temporary annuity increases your monthly payment until you reach age 65 or your death, whichever comes first.
Why choose a temporary annuity?
- Buying a temporary annuity may help you meet the initial expenses of retirement, such as paying off a mortgage before you turn 65
- If you choose a reduced pension, a temporary annuity would increase your monthly pension payments until age 65
- If you have significant taxable assets such as RRSPs, a temporary annuity can help lower your income after age 65 and therefore reduce tax on income
Important things to keep in mind:
- A temporary annuity will reduce your lifetime pension. The younger you are when you retire, the bigger the impact on your pension after age 65.
- A reduced lifetime pension might have a significant impact on your spouse or dependants.
- The temporary annuity amount is based on the maximum old age security (OAS) benefit. Amounts may change from year to year to reflect fluctuations in the OAS, but your payments will remain stable from your retirement date onwards.
You can use the personalized pension estimator in My Account to see how a temporary annuity would affect your basic lifetime pension. This will help you determine what your pension amount will be before and after age 65.
Here is an example of what these options could look like for a member* retiring at 56 years old with a pension effective date of November 1, 2019, where their lifetime pension is $2,100.
|Option||Temporary annuity amount||Pension payable to age 65**||Pension payable after age 65|
|Quarter temporary annuity (available January 1, 2022)||$153||$2,187||$2,034|
|Half temporary annuity (available January 1, 2022)||$305||$2,273||$1,968|
|Full temporary annuity||$610||$2,447||$1,837|
*Group 1 member calculations; groups 2 and 5 may differ slightly