Is the Ontario teacher’s pension enough for retirement?

If you’ve been educating our nation’s youngsters for decades, you’ve undoubtedly considered retiring. You’re aware that you have a pension plan, but what exactly is it? And will it be enough to support your retirement?


Pensions can seem perplexing. However, the Certified Financial Planners at Pension Solutions Canada are here to help! We can provide the insights you need to make informed decisions regarding your teacher’s pension.

To understand teacher pensions, you must also be aware of Canada’s retirement system. The Canadian government has several accounts that work together to provide Canadian citizens with a secure retirement after years of working and paying taxes. These accounts are: Old Age Security (OAS), the Guaranteed Income Supplement (GIS), the Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP).

In Ontario, teacher pensions are managed by the Ontario Teachers’ Pension Plan (OTPP). The Ontario Teachers’ Pension Plan is the largest single-profession pension plan in Canada at $227.7 Billion. [June 30, 2021]

It is important to have a clear understanding of what your teacher’s pension entails. In this blog, we’ll cover some things you might want to know before you retire.

Is a teacher’s pension enough for retirement?

When paired with income from the Canada Pension Plan and Old Age Security, an Ontario Teachers’ pension may generally provide enough money for a comfortable retirement. The average teacher now retires at the age of 58, with an annual pension of around $46,000 (according to OTPP). This retirement amount may not be enough for teachers who may not have sufficient retirement savings. Your pension will reduce by about 10% at age 65. This is done on the assumption that you commence CPP at that time.

At what age should Ontario Teachers retire?

Most Canadians consider 65 to be the “normal retirement age.” However, retirement at that age is not as common in the public sector. The typical retirement age in the public sector has been as low as 57.2, but it has subsequently grown to 61.3.

Teachers can retire without penalty under the OTPP if their age plus “qualifying years” totals 85 or more. For example, a teacher with 32 qualifying years can retire at the age of 53 without penalty.

When I retire, will my pension start automatically?

No, your OTPP pension will not start on its own. You must apply for your pension online in order to get it. You may forfeit pension funds if you apply after your resignation date. Click here to apply online.

When should you apply for your teacher’s pension?

You can apply online up to four months before the start date of your pension. For instance, if you want to retire in June, you can apply as early as March 1. Remember that you must apply for your pension no later than the month after your final day of work. You can apply for your pension before you resign.

Does supply teaching affect my teacher’s pension?

If you’re nearing retirement and working on a part-time basis, augmenting your income with a supply-teaching assignment may lower your pension. This can result in hundreds of dollars less in pension every year in some cases.

When should Ontario teachers retire?

Ontario teachers typically retire once they’ve reached their “85 Factor” (age + qualifying years = 85) or are at least 65 years of age.

According to the Ontario Teachers’ Pension Plan website, Ontario teachers’ pensions are calculated based on salary and years of credit.

2% × Credit × “Best-five” average salary.

Click here for our blog post about this.

Spousal Continuance for Ontario Teachers’ Pension Plan

When you retire, the default “spousal continuance” pension is 60% of your pension to your spouse / partner if you, the member, die first.

You can raise that to 70% if you qualify by answering some health questions.

The concern is this: What if you retire and aren’t in good health?

We recommend that you notify OTPP to increase the spousal continuance amount to the maximum 70%. Do that TODAY. If you or you or your spouse are not healthy at retirement, you may NOT be able to increase from 60% to 70% due to health reasons.

Therefore, we highly recommend that you set your spousal continuation to the max RIGHT NOW. The OTPP will allow you to reduce that amount if you so desire upon retirement, but may not allow you to increase.

Book A Call With Us

Always seek the assistance of a qualified financial advisor to guide you through a smooth and stress-free retirement! A specialist can answer your retirement pension concerns and assist you in understanding next steps.

Pension Solutions Canada’s staff are available to assist you. We specialize in assisting people in preparing for retirement. Allow us to evaluate and review your retirement income sources and assist you with retirement planning. Call us at 1-888-554-6661, or click here to book a virtual Zoom meeting.

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