Old Age Security (OAS) is a government program in Canada that provides a basic income to eligible seniors who have reached the age of 65. It is one of the three main pillars of Canada’s retirement income system, along with the Canada Pension Plan and personal savings.

Eligibility for OAS is based on several factors, including age, residency, and income. To receive OAS payments, you must be 65 years of age or older and have lived in Canada for at least 10 years after the age of 18.

OAS is considered taxable income. As of January 2025, the OAS maximum payments from age 65 to 74 is $727.67 per month ($8,732.04 per year), and $800.44 per month ($9,605.28 per year) for those ages 75 and older.

The amount of OAS you receive is based on how long you’ve lived in Canada after the age of 18. If you have lived in Canada for less than 40 years, you may receive a partial pension. For instance, if you lived in Canada for 35 out of the 40 eligible years you would be entitled to receive 87.5% of the OAS maximum payment (35 divided by 40).

The amount you receive may be reduced if your income exceeds a certain threshold, which is $90,997 for the income year 2024. If your income exceeds this amount, your OAS payment will be reduced by 15 cents for every dollar of income above the threshold. This OAS “recovery tax” period takes place the following year (July 2025 to June 2026).

Since July 2013, most eligible seniors are automatically enrolled to receive OAS starting at age 65. The government determines your eligibility the month after you turn 64. If eligible, you will be notified of your automatic enrolment beginning at age 65. That means, if you are still working or simply plan to defer taking your OAS benefits to age 66 to 70, you should contact Service Canada to declare your voluntary deferral.

Otherwise, to apply for OAS, you must complete an application form and provide proof of age and residency. You can apply up to 11 months before you turn 65, and you should receive your first payment within three months of your application being approved.

To apply online you’ll need a My Service Canada Account (MSCA).

In addition to OAS, there are other government programs that may be available to eligible seniors, including the Guaranteed Income Supplement, the Allowance for Spouses, and the Allowance for Survivors. These programs provide additional income to low-income seniors and their spouses or survivors.

Overall, Old Age Security is an important program that provides a basic income to eligible seniors in Canada. While the amount of OAS you receive may vary based on your income and residency, it can provide a valuable source of income in retirement. If you are approaching the age of 65, it is important to consider your eligibility for OAS and other government programs that may be available to you.

Deferring OAS to age 70

Deferring Old Age Security to age 70 is an option for Canadian seniors who have the financial capacity to do so. By delaying your OAS payments, you can increase the amount you receive each month.

For each month that you delay your OAS beyond age 65, your pension will increase by 0.6%, up to a maximum increase of 36% if you delay OAS until age 70. This means that if you delay your OAS for five years, you will receive 36% more per month than you would if you started collecting at age 65.

However, it is important to carefully consider whether delaying your OAS is the right choice for you. If you have a shorter life expectancy or if you need the money to cover your living expenses, it may be better to start collecting your OAS at age 65.

Additionally, delaying your OAS may affect your eligibility for other government programs that are based on your income. For example, if you delay your OAS and receive a higher pension at age 70, your income may be higher and you may no longer be eligible for certain programs, such as the Guaranteed Income Supplement.

Overall, delaying your OAS to age 70 is an option that can provide a higher monthly pension, but it may not be the right choice for everyone.

OAS Payment Dates 2025

The OAS payment dates for 2025 are:

• January 29, 2025
• February 26, 2025
• March 27, 2025
• April 28, 2025
• May 28, 2025
• June 26, 2025
• July 29, 2025
• August 27, 2025
• September 25, 2025
• October 29, 2025
• November 26, 2025
• December 22, 2025

Payment dates may vary depending on your payment method. If you receive your OAS payments by direct deposit, it should be deposited into your account on the payment date. If you receive your payment by cheque, it may take a few additional days to arrive by mail.

OAS is Indexed to Inflation

While Canadians can expect their CPP payments to increase annually based on the previous year’s Consumer Price Index, OAS recipients have their benefits adjusted quarterly to provide better protection against unexpected sharp increases in prices over the year.

The quarterly inflation adjustment for OAS benefits is based on the difference between the average CPI for two periods of three months each:

• the most recent three-month period for which CPI is available, and
• the last three-month period where a CPI increase led to an increase in OAS benefit amounts.

OAS payments remained unchanged for the first quarter of 2025, as the CPI did not increase over the previous 3-month period.

OAS Payments Increase at age 75

In July 2022, the Canadian government announced an increase to the OAS pension for seniors aged 75 or older. Starting in July 2022, the OAS pension for seniors aged 75 or older was automatically and permanently increased by 10%.

If you turned 75 after July 1, 2022 you will receive the increase in the month following your 75th birthday.

The 10% increase in the maximum OAS pension rate will not affect the calculation of your Guaranteed Income Supplement (GIS).

The increase to the OAS pension for seniors aged 75 or older is in recognition of the increased costs and challenges that seniors face as they age. The government hopes that this increase will provide additional support to seniors and help them maintain a good standard of living in their later years.

OAS Clawback Threshold

The Old Age Security (OAS) clawback threshold is the income level at which your OAS payments will be reduced or “clawed back”. The OAS clawback is designed to ensure that OAS payments are targeted to those who need them the most, by reducing or eliminating payments for those with higher income levels.

The OAS clawback threshold for the income year 2024 is $90,997. This means that if your net income (which includes income from all sources, such as employment, pensions, investments, etc.) exceeds this amount, your OAS payments will be reduced by 15 cents for every dollar of income above the threshold. 

For example, if your net income was $95,997 in 2024, which is $5,000 above the clawback threshold, your future OAS payments will be clawed back by $750 (15% of $5,000). This “recovery tax” period takes place from July 2025 to June 2026.

If your net income exceeds $148,451 in 2024, your OAS payments will be fully clawed-back during the OAS recovery tax period the following year (July to June).

The timing and mechanics of this is important to note.

Let’s say you applied for OAS benefits upon turning 65 in June 2024. You earned $150,000 in 2024 due to a variety of income sources, including capital gains from the sale of a rental property. You file your 2024 taxes in April 2025 and CRA determines that your taxable income that year has exceeded the OAS clawback threshold.

Meanwhile, you’ve been receiving OAS payments monthly since July 2024. You won’t get a bill to repay the approximate $8,732 you received in OAS benefits between July 2024 and June 2025. Instead, your repayment amount is deducted from your ongoing OAS payments as a recovery tax starting in July 2025.

You will receive a letter informing you of any recovery tax deductions being withheld from your OAS pension payments.

*Changes in OAS Eligibility (not happening)*

Back in 2015, the federal government led by Stephen Harper proposed changes to OAS eligibility – increasing the age of eligibility from 65 to 67. This would have gone into effect as of April 1, 2023 and be fully implemented by January, 2029.

This proposal was quickly repealed when the federal Liberal government was elected in 2015. It’s not happening, folks.

You can continue to apply for OAS benefits and receive them starting at age 65.

Final Thoughts

OAS is a complicated system but one that is critical to retirement planning for many Canadians. It’s important to understand how much OAS you can expect to receive in retirement, and when you plan to take your OAS benefits (between ages 65 to 70) to maximize your income and minimize any clawbacks.

Speaking of clawbacks, it’s also important to understand that OAS benefits are means-tested, meaning once your income rises above a certain threshold your benefits will be clawed-back by 15 cents for every dollar above that threshold. In some cases, OAS benefits may be completely clawed back.

It’s important to work with a financial planner who can help you understand how the timing of retirement, crystallizing capital gains, and withdrawing from an RRSP or RRIF can impact when you should take your OAS benefits and whether your benefits will be clawed back.

It’s also important to note the advantage of pension income splitting with a spouse (for defined benefit pension income and RRIF / LIF income at age 65 and beyond), and how this helps avoid OAS clawbacks in many cases.

OAS payments are indexed to inflation and benefits are adjusted quarterly to keep pace with inflation (versus CPP, which is adjusted annually in January).

Will you take your OAS at age 65, or do you plan on deferring OAS to age 70? Do you have strategies in place based on retirement, capital gains, RRSP/RRIF withdrawals, that will impact when you decide to take OAS?

Canada Pension Plan (CPP) benefits can make up a key portion of your income in retirement. Individuals receiving the maximum CPP payments at age 65 can expect to collect $17,196 per year ($1,433 per month) in benefits.

The amount of your CPP payments depends on two factors: how much you contributed, and how long you made contributions between ages 18 and 65. Most don’t receive the maximum benefit. In fact, the average amount for new CPP beneficiaries is just $9,697.68 per year (as of January 2025).

CPP Payments 2025

The table below shows the monthly maximum CPP payment amounts for 2025, along with the average amount for new beneficiaries:

Now, you may not have a hot clue how much CPP you will receive in retirement, and that’s okay.

The good news is that the government does this calculation for you on an ongoing basis. This means that you can find out how much money the government would give you today, if you were already eligible to receive CPP.

This information is available on your Canada Pension Plan Statement of Contribution. You can get your Statement of Contribution by logging into your My Service Canada Account, which – if you bank online with any of the major banks – is immediate.

Related: CRA My Account – How to check your tax information online

If you’d prefer to send your personal information by mail you can request a paper copy of your Statement of Contribution sent to you by calling 1.877.454.4051, or by printing out an Application for a Statement of Contributions from the Service Canada Website.

Note that the information available to you on your CPP Statement of Contribution may not reflect your actual CPP payments. That’s because it doesn’t factor in several variables that might affect the amount you’re entitled to receive (such as the child-rearing drop-out provision).

The statement also assumes that you’re 65 today, which means that later years of higher or lower income that will affect the average lifetime earnings upon which your pension is based aren’t taken into consideration.

CPP is Indexed to Inflation

Canada Pension Plan (CPP) rate increases are calculated once a year using the Consumer Price Index (CPI) All-Items Index. The increases come into effect each January, and are legislated so that benefits keep up with the cost of living. The rate increase is the percentage change from one 12-month period to the previous 12-month period.

CPP payments were increased by 2.7% in January 2025, based on the average CPI from November 2023 to October 2024, divided by the average CPI from November 2022 to October 2023.

Note that if cost of living decreased over the 12-month period, the CPP payment amounts would not decrease, they’d stay at the same level as the previous year.

CPP Payment Dates

CPP payment dates are scheduled on a recurring basis a few days before the end of the month. This includes the CPP retirement pension and disability, children’s and survivor benefits. If you have signed up for direct deposit, payments will be automatically deposited in your bank account on these dates:

All CPP payment dates 2025

• January 29, 2025
• February 26, 2025
• March 27, 2025
• April 28, 2025
• May 28, 2025
• June 26, 2025
• July 29, 2025
• August 27, 2025
• September 25, 2025
• October 29, 2025
• November 26, 2025
• December 22, 2025

Why Don’t I Receive The CPP Maximum?

Only about 6% of CPP recipients receive the maximum payment amount, according to Employment and Social Development Canada. The average recipient receives about 56% of the CPP maximum. With that in mind, it’s best to lower your CPP expectations when calculating your potential retirement income.

Why don’t more people receive the maximum? Well, because it requires 39 years of CPP contributions at the maximum level to get the biggest possible benefit in retirement. That means you need a salary that meets or exceeds the yearly maximum annual pensionable earnings threshold, which in 2025 is $71,300.

Note that there is a new Year’s Additional Maximum Pensionable Earnings (YAMPE) as part of the enhanced CPP that is being phased in over two years. This means Canadians will pay an additional 4% on the earnings between $71,300 to $81,200.

• Year       YMPE
• 2025      $71,300 
• 2024      $68,500 
• 2023      $66,600
• 2022      $64,900
• 2021      $61,600
• 2020      $58,700
• 2019      $57,400
• 2018      $55,900
• 2017      $55,300
• 2016      $54,900

Plenty of variables affect your ability to earn the maximum CPP benefits. Maybe you joined the work force late, dropped out for a period of time, or retired early.

Related: When Should Early Retirees Take CPP?

Low income earners may not hit the YMPE level often enough to get the highest possible CPP retirement benefit. Business owners who choose to pay themselves dividends don’t need to contribute to CPP, but that means they won’t be eligible to receive benefits either.

When To Take CPP?

Perhaps the most common question about CPP is when to take it. The standard age to take CPP is at age 65. But, Service Canada may proactively send out a notice a few months before your 60th birthday advising you that you’re eligible to apply for CPP and giving you an estimate of your expected CPP payments.

You can take a reduced CPP payment starting as early as age 60. If you do elect to take CPP early, you’ll receive 0.6% less for every month you receive it before age 65. That means, for those taking CPP at age 60, a reduction in their CPP payments by 36%. Reductions aside, there could be good reasons to take CPP early – namely if you need the income sooner than 65, or if you expect to have a reduced life expectancy.

Conversely, you can enhance your CPP payments by deferring your pension up until age 70. The advantage of waiting is you’ll receive a 0.7% increase for every month you defer CPP past age 65. Taking CPP at age 70 results in a 42% enhancement to your pension. The biggest reason to defer CPP is to protect against longevity risk – the risk of outliving your money. The trade-off is using your own personal savings to tide you over until the enhanced CPP payments kick-in later in life.

Note there is no benefit to defer CPP beyond age 70, so get your CPP application in on time to avoid delays.

Final Summary

CPP is a complicated system but one that is crucial to retirement planning for many Canadians. It’s important to understand how much CPP you will receive in retirement, and to know how difficult it is to receive the maximum CPP payments. Most CPP beneficiaries receive much less than the maximum, with the average between 55% and 60% – so that’s good to know going into your retirement income planning.

You can find out an estimate of your CPP benefits by looking at your Statement of Contribution online at your My Service Canada Account, or request a paper copy by calling Service Canada.

CPP payments are indexed to inflation, with the latest increase going up by 4.8% in 2024. CPP payment dates are scheduled toward the end of every month and automatically deposited into your bank.

Finally, a big consideration is when to take CPP and how the payments fit into your retirement plan. Do you expect to live a long life? Will you work until age 65? Do you have sufficient personal savings to last until your CPP payments kick-in? Will you take CPP at age 65, or elect to take your pension earlier or later?

Readers: How does CPP fit into your retirement income plan?

It might seem counterintuitive to spend down your own retirement savings while deferring government benefits such as CPP and OAS past age 65. But that’s exactly the type of strategy that can increase your income, save on taxes, and protect against outliving your money. Indeed, the key to more lifetime income for many retirees is to defer CPP until age 70.

Why Take CPP at age 70?

Here are three reasons to take CPP at age 70:

1. Enhanced Benefit – Take CPP at 70 and get 42% more!

The typical age to take your CPP benefits is at 65, but you can take your retirement pension as early as 60 or as late as age 70. It might sound like a good idea to take CPP as soon as you’re eligible but you should know that by doing so you’ll forfeit 7.2% each year you receive it before age 65.

That’s right, you’ll get up to 36% less CPP if you take it immediately at age 60 rather than waiting until age 65. That alone should give you pause before deciding to take CPP early. What about taking it later?

There’s a strong incentive for deferring your CPP benefits past age 65. You’ll receive 8.4% more each year that you delay taking CPP (up to a maximum of 42% more if you take CPP at age 70). Note there is no incentive to delay taking CPP after age 70.

Let’s show a quick example. The maximum monthly CPP payment one could receive at age 65 (in 2025) is $17,196. Most people don’t receive the CPP maximum, however, so we’ll use the average amount for new beneficiaries, which is $808.14 per month. Now let’s convert that to an annual amount for this example = ~$9,700.

Suppose our retiree decides to take her CPP benefits at the earliest possible time (age 60). That annual amount will get reduced by 36%, from $9,700 to $6,208 – a loss of $3,492 per year.

Now suppose she waits until age 70 to take her CPP benefits. Her annual benefits will increase by 42%, giving her a total of $13,774. That’s an increase of $4,074 per year for her lifetime (indexed to inflation).

2. Save on taxes from mandatory RRSP withdrawals and OAS clawbacks

Mandatory minimum withdrawal schedules are a big bone of contention for retirees when they convert their RRSP to an RRIF. For larger RRIFs, the mandatory withdrawals can trigger OAS clawbacks and give the retiree more income than he or she needs in a given year.

The gradual increase in the percentage withdrawn also does not jive with our belief in the 4 percent rule that will help our money last a lifetime.

You can withdraw from an RRSP at anytime, however, and doing so may come in handy for those who retire early (say between age 55-64). That’s because you can begin modest drawdowns of your retirement savings to augment a workplace pension or other savings to tide you over until age 65 or older.

Related: When Should Early Retirees Take CPP?

Tax problems and OAS clawbacks occur when all of your retirement income streams collide simultaneously. But with a delayed CPP approach your RRSP will be much smaller by the time you’re forced to convert it to a RRIF and make minimum mandatory withdrawals.

With careful planning (and appropriate savings) your retirement income streams by age 70 could consist of CPP and OAS benefits, small RRIF withdrawals, plus – the holy grail – TFSA withdrawals, which do not count as income and won’t affect means-tested benefits like OAS.

3. Take CPP at age 70 to protect against longevity risk

Here’s where the counter-intuitiveness comes into play. Most default retirement projections will have you taking CPP at age 65 (or earlier) while delaying withdrawals from your RRSP and/or LIRA until age 71.

As I suggested above, the idea is to spend down some of your RRSP before age 70 to fill the gap left by deferring your CPP benefits. Good luck getting your commission-paid advisor to buy into this approach. I doubt many advisors would like the idea of spending down your savings early in order to maximize retirement benefits from CPP.

“Spend your risky dollars first because they may not be there for you in your 80s, depending on how your investments do. A bigger CPP cheque, however, will definitely be there for you.” – Fred Vettese

Spending down your RRSP in your 60s while deferring CPP until age 70 is like converting your risky assets (personal savings in the stock market) into a guaranteed income stream for life.

Related: 5 ways to save your retirement

Think about it. Will you still have the required mental faculties at age 80 or 90 to continue managing your own retirement assets? Or would you prefer to enjoy spending those assets in your 60s and 70s, knowing you still have an enhanced (and guaranteed) income stream to last a lifetime?

If your biggest fear in retirement is outliving your money then why not design your retirement income streams to protect against that very fear? Instead, most retirees take their CPP benefits the first chance they get – leaving additional money on the table and giving up a portion of that longevity risk protection.

Let’s hear it: Retirees, when did you take CPP? Soon-to-be retirees, have I given you a compelling argument to take CPP at age 70?