Did you know: The Income Tax Act says you have to start taking money out of your pension plan savings by the end of the year you turn 71. This rule applies to all of your pensions, if you have more than one. Don’t forget about any pension you may have from a job you left years before.

How do I turn my pension into income?

Most people start using their pension as soon as they retire. How they create income depends on the type of pension plan and the plan rules. Here we will look at two main types of plans:

•       Defined benefit plans. These plans provide set, regular payments for life. Learn more now

•       Defined contribution plans and Group Registered Retirement Savings Plans (Group RRSP). These plans give you all your pension money in a single lump sum when you retire. You use this money to create income on your own. Learn more now

Making your pension savings last: Prem's story

At age 62, Prem is getting ready to retire. His top concern is how to make his savings last. How much can he afford to spend each year from his pension? To find out how he decides, read Prem’s story.

Getting your pension from a former employer

A former employer may have set up a pension for you in the form of a Locked-In Retirement Account (LIRA) or Locked-in RRSP account. By age 71, you must close these accounts and either:

•       Buy a life annuity

•       Move the money to a Life Income Fund (LIF). In some provinces, you may choose a Locked-in Retirement Income Fund (LRIF) instead.

Remember: Each pension plan has its own rules for creating income.

Make sure you understand your options and how they will affect the money you get. You may want to talk to a professional adviser to help you sort out the best choices for you.