Can You Retire in Canada on ONLY CPP & OAS?

Many Canadians believe CPP and OAS will be enough to last for their entire retirement. But after speaking and working with retirees who rely on it, I can tell you—it’s not easy. 

Today, we’ll break down exactly how much you’ll receive, show you what life on these benefits really looks like, and by the end of this blog post, you’ll know whether you’re on track for financial freedom—or in for a wake-up call.

How Much CPP and OAS Will You Get?

For most Canadians, retirement income comes from multiple sources. But what if you’re relying only on CPP and OAS? Let’s break down exactly how much you can expect to receive—and whether it’s enough to cover even basic expenses.

CPP Breakdown

The Canada Pension Plan (CPP) is based on your lifetime earnings. The more you contributed during your working years, the higher your payout in retirement. However, most people don’t receive the maximum amount because it requires decades of consistent max contributions.

Here’s what the CPP payout looks like in 2025 at different ages:

📌 Key Takeaway:

• Taking CPP early reduces your monthly payments significantly.
• Waiting until age 70 can boost your benefits by over 40%, but you need to be able to afford delaying it.
• CPP is designed to replace only around 25-33% of your working income.

For a deep dive on maximizing your CPP benefits, make sure to check out my “Want the $2,034 Maximum CPP Benefit?” blog post.

OAS Breakdown

The Old Age Security (OAS) pension is a universal benefit for Canadians aged 65 and older who have lived in Canada for at least 10 years after turning 18. Unlike CPP, OAS is not based on employment income—it’s available regardless of your work history. However, the amount you receive can vary based on residency, income, and whether you choose to defer your payments.

OAS Maximum Monthly Payments (January–March 2025)

📌 Key Points:

• OAS payments are reviewed quarterly (January, April, July, and October) and adjusted based on inflation.
• At age 75, there is an automatic 10% increase in the OAS pension.

Factoring in GIS (Guaranteed Income Supplement)

If your total income is very low, you may qualify for the Guaranteed Income Supplement (GIS)—a government benefit designed to help low-income seniors.

• Maximum GIS (2024): ~$900/month for single seniors with no other income.
• If you have any additional income, GIS is reduced dollar-for-dollar—so even small withdrawals from RRSPs can impact your eligibility.

Total Estimated Income

If you have no other income, your total retirement income might look like this:

• Used CPP average 
• OAS and GIS I estimated using this OAS estimator, which estimates your income. Given only CPP income, you could get:

• Note that OAS does not count towards GIS income calculation. 
• If you qualify for GIS, you could be living on about $2,000/month.
• This is barely above the poverty line—so relying on CPP and OAS and GIS alone isn’t exactly a comfortable plan.

Can You Actually Live on This? (Cost of Living Breakdown)

So, what does a retirement on $1,500 to $2,000 per month actually look like in Canada? Let’s get real.

The Harsh Reality: Possible? Yes. Comfortable? Not Really.

It’s technically possible to survive on this income, but it requires serious sacrifices. Here’s where your money would actually go:

Major Expenses

1. Housing: The Biggest Cost

• If you own a home outright, your housing costs are lower, but you still have to budget for property taxes, maintenance, and utilities (~$500+/month).
• If you rent, even in smaller cities, you’re looking at $1,000+ per month—which could wipe out over half of your income immediately.
• Toronto or Vancouver? Forget it. Rents in major cities easily exceed $2,000+ per month for a one-bedroom.

2. Food & Groceries

• With rising grocery prices, a basic grocery budget for a single senior is around $300-$500/month.
• Forget eating out often—restaurant meals add up quickly.

3. Healthcare Costs

• If you’re under 65 and not covered by a provincial plan, you may need private insurance.
• Prescription medications, dental, and vision care can be major expenses.

4. Utilities & Transportation

• Utilities (electricity, heating, internet, phone) = $200+ per month
• If you own a car, insurance, gas, and maintenance add another $200-$400 per month.
• If you rely on public transit, expect $100+ per month in costs.

Lifestyle Limitations

• No travel budget: Even domestic trips would require serious saving.
• No big purchases: Furniture, appliances, or a new car? Not happening.
• Emergency fund? You’re likely living month-to-month, so an unexpected bill could throw everything off.
• May need to rely on family, food banks, or community support.

📌 Big Takeaway: You can survive, but it’s a bare-bones lifestyle. If your goal is to enjoy your golden years, this isn’t it.

Before we go to our next section, If you want to save more on taxes in retirement, check out our free guide with 5 proven strategies to keep more of your money.

📩 Grab your free copy—link is here:
https://blueprintfinancial.ca/retirement-tax-saving-guide

The Reality Check—Is It Enough?

The short answer: For most people, no. But in some cases, it can work.

When This Could Work

Living on CPP and OAS alone is challenging, but it might be possible if:

✔️ You own your home outright – No mortgage or rent means dramatically lower expenses.
✔️ You live in a low-cost area – Small towns or rural parts of Canada offer more affordable living.
✔️ You share housing costs – Living with roommates, family, or housemates can stretch your budget.
✔️ You have extra support – Whether it’s help from family, investment income, or a part-time job, having another financial source makes a difference.

Example: A retiree in small-town Ontario, mortgage-free and with minimal expenses, could potentially make $2,000/month work—but only with very strict budgeting.

When This Falls Apart

For most retirees, surviving on CPP and OAS alone just doesn’t add up. Here’s why:

❌ You rent in a major city – High rent alone can swallow most of your income.
❌ Unexpected expenses pop up – Medical bills, car repairs, or home maintenance can quickly derail your finances.
❌ No savings means no safety net – Without emergency funds, every month is a financial balancing act.

📌 Reality Check: Most Canadians don’t want to spend their retirement worrying about every dollar.

What Can You Do If CPP & OAS Aren’t Enough?

If CPP, OAS, and GIS won’t cover your expenses, you’re not alone. Many retirees face a shortfall, but there are ways to bridge the gap:

1️⃣ Delay CPP & OAS – Payments increase the longer you wait (up to age 70).

• CPP grows 42% by delaying to 70.
• OAS increases 36%, but watch for clawbacks.

2️⃣ Use a TFSA for Tax-Free Income – Unlike RRSPs, TFSA withdrawals aren’t taxed or counted for GIS eligibility. Even small contributions can grow into a reliable, tax-free income stream.

3️⃣ Lower Housing Costs – Downsizing frees up capital for homeowners, while relocating to a lower-cost area in Canada or abroad makes your money go further.

4️⃣ Take Advantage of Government Benefits – Programs like the Allowance for the Survivor provide additional financial support.

5️⃣ Spousal Planning – Income splitting, pension sharing, and RRIF withdrawal strategies can lower your tax burden and increase after-tax income.

Creative Ways Retirees on CPP & OAS Are Making It Work

With limited income, some retirees are thinking outside the box:

✅ House Hacking – Some retirees rent out part of their home, offer short-term Airbnb stays, or even become house sitters to live rent-free while travelling.

✅ Turning Hobbies into Income – Many find ways to monetize their skills—teaching music, selling crafts online, tutoring, or even becoming part-time tour guides in their community.

✅ Work-for-Stay Arrangements – Programs like TrustedHousesitters let retirees live for free by house-sitting around the world.

✅ Nomadic Retirement – Instead of settling in one place, some retirees slow-travel through low-cost countries, taking advantage of extended tourist visas and living for months at a time in places where their pension stretches further.

🚀 Personal Experience: While travelling, I’ve met retirees who make it work abroad on modest budgets. One retiree I met in Mexico lived on $1,500/month—spending $600 on rent, eating out daily for $10, and swimming every morning. Others I’ve met have house-sit in places around Europe and the U.S. to keep their living costs lower. 

Want to know what happens to CPP & OAS when you leave Canada? Check out my blog post to find out!

🌍 A Different Kind of Retirement: Countries like Mexico, Thailand, and Portugal offer a higher quality of life for the same income, but healthcare access can be a concern. Most retirees doing this are in their 60s or early 70s, still active and healthy enough to embrace the lifestyle.

Harsh Truth: If you’re relying only on CPP & OAS, you need a backup plan.

The Sooner You Plan, The More Options You Have

Retirement planning is like a medical checkup—the earlier you address issues, the more options you have. If you’re still working, now is the time to create a plan to avoid relying only on CPP and OAS.

At Blueprint Financial, we help Canadians craft personalized retirement strategies, from maximizing benefits to lowering taxes and building the right investment portfolio.

Get started today!
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