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CPP, OAS, pensions and RRSP or RRIF withdrawals are all taxable income. Your RRSP has to be closed or turned into a RRIF by the end of the year you turn 71, and TFSA withdrawals aren't taxed.
The cheque stops coming from one place and starts coming from several, and almost none of them take tax off the way your employer did.
What gets taxed?
CPP, OAS, employer pensions and RRSP or RRIF withdrawals all count as income, and so does interest outside a TFSA. A TFSA withdrawal doesn’t, which is why people often use it to top up their income without raising their tax. Check yours with the RRSP withdrawal tax calculator and the TFSA calculator.
When do you start CPP and OAS?
You choose, and the timing changes the amount you get for the rest of your life. Try the CPP calculator and the OAS calculator before you decide, then look at the CPP page for the current maximums.
What about the RRSP?
It has to be closed or turned into a RRIF by the end of the year you turn 71. Plan the withdrawals, because a big lump in one year can push you into a higher bracket. The RRSP page explains the basics, and the savings and retirement guide goes wider.
Plan the first year carefully, since it’s the one people get wrong.
Before you act on this page
You’re reading a general overview, and it can’t see your slips, your province or your family, so you shouldn’t treat it as advice for your own return. If anything here doesn’t match a letter from the CRA, the letter wins.
Stuck?
Ask a qualified preparer or the CRA itself, and keep the document checklist, the tax calendar and the filing guide close by. Not sure which province’s rules apply to you? The province index lists them all.
Frequently asked questions
Are CPP and OAS taxable?
Yes. Both are taxable income. OAS can also be reduced if your net income is high, so check the current threshold on the CRA site.
What happens to my RRSP?
You must close it or turn it into a RRIF by the end of the year you turn 71. Withdrawals from either are taxable income.
Can I split pension income with my spouse?
In many cases you can, which can lower the tax for the couple. The rules depend on the type of income and your ages.
Do retirees pay tax instalments?
Some do. If you owe a lot of tax each year and nothing is taken off at the source, the CRA may ask for quarterly instalments.
Information only. This page is general information, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns or offer tax services, and we have no connection with the CRA, Revenu Québec, any government or any company named on this page. Check the figures that matter with an official source or a qualified professional.