Novin Pak: Retirement income, one source at a time
FILE 113 / DOSSIER A · CPP / SPONSORED
23.10.2026 / 7 MIN READ
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The CPP increase that changed payments in January: what the percentage really means
Canada Pension Plan payments already in place received a 2.0% cost-of-living adjustment for 2026. The extra amount depends on the benefit a person was receiving before January.
Canada Pension Plan
When the public pension starts, how it is indexed each January, what can still be changed and what tax does to it.
Public pension
Workplace pensions
Defined benefit and defined contribution plans, commuted values, locked-in accounts and the survivor option.
Employer plan
RRSPs and RRIFs
Turning registered savings into income: withdrawals, RRIFs, spousal plans and annuities.
Personal savings
Taxes on retirement income
What comes off each source before it reaches the bank: withholding, instalments, credits and the OAS recovery tax.
Deductions from every source
The form that can lower OAS clawback deductions in a year your income drops
Monthly OAS recovery tax is based on an older tax return. When this year’s income is much lower, form T1213(OAS) asks the CRA to reduce what is held back.
Commuted value or monthly pension when you leave an employer
Leaving a defined benefit plan before retirement can mean choosing between a lump sum and a pension for life. The tax limit on the transfer is the part most people meet for the first time.
Why some retirees open a RRIF before they have to
The deadline is the end of the year you turn 71, but RRIF income from 65 qualifies for the pension income amount and for pension splitting. RRSP withdrawals do not.
What happens if you start CPP and then change your mind
There is a twelve-month window to cancel a CPP retirement pension. Using it means paying back every dollar, and after it closes the decision is permanent.
DECISIONS THAT CANNOT BE UNDONEMost retirement income choices can be adjusted later. These cannot, or only within a short window.
- Once an annuity is bought, the terms of the contract generally cannot be changed.File 111 →
- A waiver of the joint and survivor pension takes effect once pension payments begin.File 106 →
- Transferring a commuted value out of a pension plan cannot be reversed.File 104 →
- Cancelling CPP is only possible within 12 months of the first payment.File 101 →
THE FRIDAY FILE / WEEKLY / FREEThe Friday File. One source of retirement income, explained on a single page.
Every Friday: one rule, one date or one number worth checking on CPP, workplace pensions, RRSPs, RRIFs or the tax on them. Free, and you can unsubscribe from any issue.
- Indexation
- The yearly adjustment of a benefit in payment for the cost of living. CPP’s is set each January. File 113
- Bridge benefit
- A temporary top-up in some workplace pensions, usually paid until 65. File 102
- Commuted value
- A lump sum calculated to equal the value of a future pension. File 104
- LIRA / LIF
- Locked-in accounts for pension money: one for saving, one for drawing an income. File 105
- Joint and survivor
- A pension that continues to a spouse, at 60% or more, after the member’s death. File 106
- Withholding tax
- Tax held back when money is paid out; a deposit against the bill, not the bill. File 108
- Pension splitting
- Reporting up to half of eligible pension income on a spouse’s return. File 109
- Recovery tax
- The OAS clawback: 15% of net income above a yearly threshold. File 112