CPP and OAS Aren’t Enough: Here’s How to Fill the Gap

If you’re banking on the CPP (Canada Pension Plan) and OAS (Old Age Security) to fund your retirement, here’s a number that should get your attention: $925.35.

That’s the average CPP retirement pension as of January 2026, according to the Government of Canada. Add up to $743.05 in Old Age Security OAS for those aged 65 to 74, and you’re looking at a combined average inflow of roughly $1,668 a month, before tax.

For most Canadians, that isn’t enough. My view is clear: if you don’t build an alternate income stream before you retire, you’re setting yourself up for a cash-flow problem. Investing in quality dividend stocks will help you create a low-cost passive-income stream.

Brookfield Infrastructure Partners (TSX:BIP.UN) is one of the best stocks to own in 2026 to help bridge that gap. Here’s why.

The retirement income gap is widening

Let’s put the numbers in plain terms.

• The maximum CPP at age 65 is $1,507.65/month, but very few Canadians hit that ceiling. You’d need a full working career of maximum contributions to get there.
• OAS adds up to $743.05/month for those aged 65 to 74, and up to $817.36 for those 75 and over. But OAS eligibility depends on your annual net world income remaining below $148,451 (for ages 65–74) for the 2024 tax year.
• The Guaranteed Income Supplement (GIS) can help low-income seniors, up to $1,109.85/month for single retirees with net income below $22,512, but most middle-income Canadians won’t qualify.

The bottom line? Government benefits are a foundation and not a retirement plan on their own.

Brookfield is a high-yield TSX dividend stock

Brookfield Infrastructure Partners is a globally diversified owner and operator of utilities, transport, midstream, and data infrastructure. Think pipelines, toll roads, telecom towers, rail networks, and data centres: assets that generate cash across economic environments.

• In 2025, Brookfield Infrastructure reported funds from operations (FFO) of US$3.32 per unit, an increase of 10% year over year.
• It raised the quarterly dividend by 6% to US$0.455 per unit, indicating a payout ratio of less than 55% and a yield of 5%.
• Since 2009, Brookfield Infrastructure has delivered a 9% compound annual growth rate (CAGR) in distributions per unit, alongside a 14% CAGR in FFO per unit.
• That’s 17 consecutive years of distribution increases, within or above its annual target of 5% to 9% growth.

About 85% of BIP’s FFO is contracted or regulated, which means the income isn’t exposed to wild swings in commodity prices or economic cycles.

Its data segment, which includes over 150 data centres and 308,000 telecom towers, has 95% contracted FFO. Utilities sit at 90%. These are infrastructure businesses with long-term, inflation-linked contracts.

Notably, around 85% of Brookfield Infrastructure’s FFO is indexed to or protected from inflation. For retirees, this kind of inflation protection is invaluable.

The company also carries an investment-grade credit rating of BBB+ from both S&P and Fitch, with 90% fixed-rate debt and an average maturity of 14 years. Its balance sheet is built to last.

The Foolish takeaway

The math on government pensions is simple. Even in the best case (maximum CPP plus maximum OAS), you’re looking at roughly $2,250/month before tax, which is not enough for most Canadian retirees.

Building a dividend portfolio anchored by a stock like BIP.UN offers you something the government can’t, which is income that grows over time, inflation protection, and the ability to control when and how much you draw down.

You don’t have to wait until retirement to start. The earlier you build that income stream, the more compounding does the heavy lifting for you. CPP and OAS are a safety net. What you build on top of them is your retirement.

The post CPP and OAS Aren’t Enough: Here’s How to Fill the Gap appeared first on The Motley Fool Canada.

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More reading

• The Canadian Stock I Simply Refuse to Sell
• My 1 Forever TFSA Stock — and Why I’ll Never Let it Go
• Canada’s Planned Infrastructure Boom: The Time to Invest Is Now
• Could Buying Brookfield Infrastructure Stock Set You Up For Life?
• My 5 Favourite Dividend Stocks to Buy Right Now

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.