By Janet Gray
One of the most common questions I’m asked is “When should I take my CPP and OAS?” It’s a crucial retirement decision and the short answer is simple: There is no single “right” age for everyone. The best choice depends on your health, finances and priorities. Here’s a plain-language guide to help you think it through.
CPP and OAS in brief
CPP (or QPP in Quebec) is a work-based pension. You and your employers contributed to it during your working years and your benefit depends on your earnings history and contributions. If you worked in both Quebec and other provinces, your contributions are combined; you apply to the plan in your province of residence at the time of applying to receive benefits.
OAS is different. It’s funded from general tax revenue and is based mainly on how long you’ve lived in Canada after age 18, not on your work history.
Key ages
- CPP: Earliest start is 60; standard is 65; latest start is 70 (QPP up to 72)
- OAS: earliest start is 65; latest start is 70
Starting CPP early (ages 60–64)
If you start CPP before 65, your benefit is reduced by 0.6 per cent per month (7.2% per year), to a maximum reduction of 36 per cent at age 60.
This can make sense if:
- You need income to cover basic expenses
- Your health is poor or family history suggests a shorter life expectancy
- You want more income in your active “go-go” years and are less concerned about income late in life
Main downside: You lock in a smaller, inflation-indexed income for life. If you live into your 80s or 90s, you’ll likely collect less total CPP than if you had waited.
Delaying CPP (after age 65 to 70)
For every month you delay CPP after 65, your benefit increases by 0.7 per cent (8.4 per cent per year), up to 42 per cent more at age 70.
This often pays off if:
- You’re in good health and expect a long life
- You have other resources (RRSPs, TFSAs, non-registered savings or a spouse’s income) to support you in your 60s
- You value a larger guaranteed income for life to reduce the risk of outliving your money
If you have a defined benefit pension with a bridge benefit that ends at 65, that adds another layer to the decision.
Main downside: You give up several years of payments and may need to draw more from investments between 60 and 70, which can feel uncomfortable even when the long-term math is favourable.
OAS: Take it at 65 or delay?
OAS normally starts at 65, but delaying it increases payments by 0.6 per cent per month, up to 36 per cent more at age 70.
Delaying OAS can help if:
- You want higher inflation-protected income later in life
- You expect high income in your late 60s but lower income later and want to manage potential OAS clawback
Taking OAS at 65 may make sense if:
- You need the cash flow
- Your income will be modest, so clawback isn’t a concern
Key questions to consider
When deciding on timing, ask yourself:
Health and longevity: If close relatives often live into their late 80s or 90s, delaying CPP and OAS can act as valuable “longevity insurance.” If your life expectancy is shorter, starting earlier may result in more total benefits.
Income needs versus flexibility: If other secure income sources already cover essentials, delaying is easier. If CPP and OAS will pay most of the bills, earlier payments may be necessary.
Taxes and clawbacks: Higher CPP and OAS later can increase taxable income, but they may also allow you to withdraw less from RRSPs, smoothing taxes over retirement. Delaying OAS can reduce clawback if income drops later.
Peace of mind: Some people prefer to take benefits as soon as they’re available; others feel more secure with larger guaranteed payments for life, even if they have to wait.
Many financial professionals agree that for healthy Canadians who can afford to wait, delaying CPP and OAS toward age 70 often results in higher lifetime, inflation-protected income—especially if you live past your early 80s.
Don’t underestimate your longevity
People often underestimate how long they’ll live. Once you reach 65, your remaining life expectancy is higher than that of a newborn because you’ve already survived early-life risks.
- Men at 65: about 19–20 more years (to around age 84)
- Women at 65: about 22 more years (to around age 87)
- Couples: a 72 per cent chance at least one partner lives to 85, and roughly a one-in-five chance one lives to 95
Practical next steps
Your CPP Statement of Contributions is the starting point for serious planning. It shows your earnings history and estimated benefit and is available through your My Service Canada Account.
Government CPP and OAS calculators are useful for rough scenarios, though they don’t replace personalized advice. Try a few start-age options and see how income changes over time.
Final thought
There’s no rush. Service Canada generally needs about three months’ notice to start benefits, giving you flexibility to decide as retirement unfolds. The goal isn’t to find a perfect answer—it’s to choose the timing that best fits your health, finances and peace of mind.
