inkwellMost retirement pensions calculate retirement age to be 65 many defined benefits pension holders retire, voluntarily or through generous “packages” to entice early retirement. This creates a dilemma for most pensioners.


When Canada pension was designed, the pension was to start at age 65 and the life expectancy was 72 leaving a 7 year average pension funding period. Well we know that is no longer a valid set of assumptions as many people live well into their 80s. On top of that you need to provide for the spouse who by and large is female and has an even longer life expectancy. So the bottom line is you and your spouse are living longer; the pension is calculated on two lives, making the payments, lower than a single pensioner and while the pension income is fixed, the cost of living isn’t.

There is a technique called pension maximization to improve the situation. Pension maximization concept has two components, first, the pensioner chooses the highest payment option [the one that guarantees an income for life of the pensioner but not his spouse] and second, finances the income of the surviving spouse with a life insurance policy. Detailed explanation can be found at