A Useful Pension Plan Calculator for Canadian retirees

To estimate how much you’ll get from your CPP, here are a couple of Canadian pension plan calculators for you to try

A Useful Pension Plan Calculator for Canadian retirees

While you are still young and of working age, thinking about retirement may be furthest from your mind right now. But as you creep closer to retiring, it helps to have an idea of how much money you might receive from your Canada pension plan (CPP).

If you're a Canadian worker drawing closer to retirement, it would be very helpful and practical for you to know how the Canada pension plan is calculated. A Canada pension plan calculator can help you estimate how much you’d receive and help you get your financial plans in order. In this article, Benefits and Pensions Monitor offers important information about the CPP, along with a Canadian pension plan calculator.

Introduction to Pension Plan Calculators

Pension plan calculators are not new, and using a pension plan calculator in Canada can have subtle but important differences from the way other countries calculate their pensions. Some industries and professions may also have different ways of computing their pension amounts.

For example, the law enforcement and special forces branches in Canada may apply different rules for part-time work compared to civilian workers. But thanks to the internet, the appropriate pension calculator is often a quick search and a click away...or a simple scroll down!

A simple retirement savings calculator

If you want to get a glimpse of what your pension will be like, you can use this retirement savings calculator. Note that this is a simple calculator meant to give pensioners an idea of how long their retirement savings will last.

How to use the calculator

It’s easy to use the retirement savings calculator if you have the right information. First, make an estimate of the amount of time your savings will last based on:

  • the starting amount you have
  • monthly income deposits
  • monthly expense withdrawals

The calculator assumes you have a retirement savings account, and you receive a monthly fixed income from, for example, Old Age Security (OAS). To help you use the calculator, input the following information in the appropriate sections:

Account Balance

This is the current account balance or the amount you will deposit to fund the retirement account.

Annual Interest Rate

Enter the stated rate of the retirement savings account here. Take note that this calculator compounds interest monthly. For example, an annual interest rate of 6% will be approximated as a monthly rate of [0.06/12 months = 0.005 or 0.5%]. The interest is calculated at the end of each month, so this will include the net account amount after any withdrawals for that month.


Enter the monthly income (e.g. pension, OAS payments) that is deposited into this account.


Enter the total amount you usually withdraw from this account to pay for your monthly expenses.

Sample Computation

Let’s play with some numbers:

  1. assume you have $75,000 in your retirement account at 4% interest.
  2. You now know that your monthly income/deposits will be $1,800. 
  3. You want to know how much you can withdraw every month, so you can make your savings last at least 12 years. 

Try entering expenses as $2,400 per month and you'll see that savings will last 12 Years and 3 Months.

If you aren’t satisfied with this result, keep lowering the expense amount until you reach the time you’d like your retirement savings to last.

It must be emphasized that the resulting time can be a rough estimate or benchmark – the values you may have to work with can increase or decrease due to a variety of factors. Your expenses, for instance, will likely increase over time, and interest rates on savings accounts may also change over the years.  

A complex investment account calculator

Savvy investors choose to have other investments to bolster their retirement savings and/or retirement income. In fact, no one should rely only on their savings for retirement, if it can be helped.

That’s why we have also provided this investment calculator to find out by how much an investment can grow after a certain number of years, at a particular interest rate.

How to use the calculator

To get the estimated value of an investment after X number of years, enter the values in their appropriate space. You can estimate the future value of an investment with withdrawals, periodic contributions, and a consistent interest rate compounded on a daily basis.

If you only have an investment account that you take funds out of, like a retirement account, then leave the calculator deposits at $0. To use this calculator, input the appropriate values in each of the following:

Initial Account Balance

This is the current account balance or the amount you will deposit to start the investment account. Remember to input the present value.

Annual Interest Rate

The stated interest rate on the investment. Investors are advised that this calculator compounds interest daily. For example, an annual interest rate of 8% will be approximated as a daily rate of [0.08/365 days = 0.00021917 or 0.021917%].

Interest is calculated beginning from the day of deposit until the day of withdrawal, computed using the daily balance method. This means applying the daily periodic rate to the full amount in the account at the end of each day. This can account for any deposits or withdrawals that happened on that day. It’s important to remember that the account does not earn interest on the day of your withdrawal.

Monthly Deposits

If you will be making monthly deposits into this account, enter it in this space. Input the day of the month when deposits will be made.

Monthly Withdrawals

If you will be making monthly withdrawals from this account, enter it as a positive number, not a negative one. Also, choose the day of the month that withdrawals will be made on. This calculator does not allow days of the month for 29, 30 or 31 since not all months will have these days.

Scheduled Account Fees

Input the fees that are charged by the institution handling the investment. This can be a fixed amount or a percentage of assets. Be sure to input the appropriate and exact dollar or percentage value. To ensure greater accuracy, provide also when the fees are applied on the investment account.

Future Value at the End of X years

Enter the number of years in the future you want to calculate the value of this account for. This calculator counts actual days; a year is 365 days, and the calculator considers a leap year to have 366 days.

The Benefits of using Pension Plan Calculators in Canada

Using a pension plan calculator to estimate how much you can receive from your Canada pension plan can provide a lot of insight into your financial situation in retirement. Here are some of the other benefits of using pension calculators:

  • Set realistic financial goals – When you’ve decided on a specific target amount for your retirement, using a pension plan calculator makes it easier to see if your desired retirement amount is realistic and feasible. After using the calculator and you see that your target amount is not attainable with your current savings, earnings, and investments, you can see where you need to adjust. You can either set a more realistic retirement goal or find ways to increase your retirement income and/or savings.
  • Can help you use your money wisely – Knowing what your pension amount will be with a pension plan calculator in Canada can help you make better financial decisions. When you have an idea of what your pension will be like, that’s priceless insight into your future finances. Knowing this in turn can help you handle your money more prudently now.
  • Can help you plan better – A glimpse into what your retirement income will be like can help you plan better and earlier. If the numbers you get from the pension plan calculator depict a financial future you may not like, then this can serve as motivation to find ways to improve that future.

Limitations of retirement calculators

Future retirees should know that these pension plan calculators have their limits and should be used with some caveats. These calculators can only provide an estimate of the pension amount that investors might receive, and not the actual amount.

Investors, would-be retirees, and financial advisors are cautioned on their use. So, if you use these pension plan calculators, don’t be surprised if there is a significant difference between the calculated and actual amounts, or number of years that investments may last.

How much can I get from my Canada Pension Plan?

For workers reaching the retirement age of 65 and choosing to receive their pensions in 2024, the maximum amount they can receive is $1,364.60. Remember that the average monthly amount paid for a new retiree (also at age 65) in January 2024 was $831.92. However, the actual pension that retirees receive will depend on a few factors like:

  • The age that the retiree starts taking their retirement benefits
  • The length or duration of their contributory period to the CPP
  • The total amount of their contributions to the CPP
  • The average salary or earnings of the retiree throughout their career

Those who have yet to retire can use the pension plan calculators to get a better idea of what they’ll get in retirement.

Situations that can affect your amount of pension

Although the Canadian government has determined the set amount of pension for those retiring at 65 in 2024, the same cannot be said for all pensioners or would-be retirees. Here are some circumstances that can affect your pension amounts, whether you take it this year or in the future.

  • Working while receiving pension – Canadian workers who are still able or choose to work well into their golden years qualify for a post-retirement benefit. They can get this benefit if they keep contributing to their CPP, are still working, and are under age 70.
  • Having no work or getting a smaller salary – This can potentially impact your pension in that it may reduce your salary average, which serves as a basis for computing your pension. However, there is a “buffer”; as standard practice, the CRA "drops out” up to 8 years of your lowest-earning periods, so your pension is based on your best-earning years. This increases your maximum pensionable earnings.
  • Raising children – Taking time off work to raise children can also lower your pensionable earnings. Fortunately, though, this often means workers can avail themselves of the child-rearing provisions. Such provisions can help increase your CPP retirement pension and make you eligible for additional CPP benefits.
  • Time of disability – If you were rendered unable to work due to a disability and had to take CPP disability benefits, then this can potentially increase your retirement pension. You may also become eligible for additional CPP benefits. The CRA “drops out” those years when you were taking in CPP disability pension when computing the base component for your pension. The CRA will instead “drop in” credits for the years when you were disabled. These credits should be equal to 70% of your average earnings covered under the CPP enhancement in the 6 years before the disability. This provision can increase your pension and your spouse or common-law partner’s survivor’s pension as well. The CRA will do this based on information they already have, so you need not apply for the benefit.
  • Sharing your pension – Pension-sharing with your spouse or common-law partner can decrease your taxable pension income, thereby increasing the amount you receive.

Speaking of factors that can impact your pension, there are a few notable changes coming to the CPP. Watch this video to know more.

How is the CPP contribution calculated?

The employer and employee CPP contribute 5.95% above the basic exemption of the first $3,500. For 2024, the maximum contribution amount is $3,867.50, up from $3,754.45 in 2023.

When can I start taking my Canadian Pension Plan?

The standard age at which you can begin your CPP benefits is at age 60. However, Canadian workers can choose to take their pensions later at age 65, or even push it back further to age 70. If you opt to take your CPP benefits at 70, you will have a larger pension; if you take it as early as 60, it will be smaller.

You are only allowed to delay taking your CPP until age 70.

Using a Canadian pension plan calculator has its merits, but investors and would-be retirees should do so with an open mind and a dose of caution. A lot of things can happen, like fluctuating interest rates, runaway inflation, and policy changes can impact your pension. Don’t forget, personal events like having children, contracting an illness or even becoming disabled have effects on pension too. All that investors and advisors can do is take a realistic approach and come up with feasible retirement plans (with the help of these calculators and other tools) and hope for the best.

Did you use these calculators and not get what you we hoping for? Visit our Best in Pensions section to find a specialist who can help you.