Oh, hi again. End-of-year inflation numbers are rolling in, and they give us a good idea of what we can expect for increases to programs such as the Canada Pension Plan and Old Age Security. Let\u2019s take a peek at the numbers.<\/p>\n
CPP payment increases are likely to slow in 2026<\/p>\n
Any day now, the federal government will announce how much CPP payments will rise by in 2026, but we already have a pretty good idea of what to expect.<\/p>\n
CPP payments are adjusted every year based on how much Canadians paid for goods and services, as tracked by Statistics Canada. The 2026 adjustment is based on data from November, 2024, to October, 2025, compared with the year prior. The increase is designed to make sure pension payments align with rising costs.<\/p>\n
Jason Yee, the principal financial analyst at Finepoint Solutions Inc. in Saskatoon, estimates that CPP payments will increase by about 2 per cent in 2026 for those already receiving benefits this year. <\/p>\n
That\u2019s down from 2.6 per cent in 2025 and 4.4 per cent in 2024, and a sign that inflation is cooling. CPP adjustments are tied to the rate of inflation, so as price growth slows, so do benefit increases.<\/p>\n
October\u2019s inflation numbers haven\u2019t been released yet, and that\u2019s the last piece of the puzzle that could nudge the estimate of 2 per cent, but Yee said it\u2019s not likely to change much.<\/p>\n
He added that the Bank of Canada\u2019s inflation target is 2 per cent, and that\u2019s around the number many financial planners already use when modelling retirement projections.<\/p>\n
Still, even as inflation cools, prices for essentials like groceries and gas remain well above prepandemic levels. That means retirees may be burning through their savings faster than they anticipated, and in some cases, rethinking their retirement plans altogether.<\/p>\n
\u201cIt\u2019s definitely a known issue,\u201d Yee said. \u201cInflation for the typical senior looks very different from the [inflation] for broader Canada.\u201d<\/p>\n
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