Gross & Net Income in Retirement vs Employed

One of the changes that most people don't realize is that there can be significant differences between gross income and net income when you are employed vs when you are retired. For example when you are employed a gross income of $4,000 per month can be reduced to a net income of about $2,200 per month when you consider deductions for CPP, EI and group benefits. In addition taxes can be more onerous at a higher income level. To end up with the same net income of $2,200 in retirement you may only have to claim a gross income of approximately $3,000 depending on taxes at the time because you don't have all those deductions in retirement.