Should I delay OAS until 70?
By Krystian Urbanski, CIM, CIWM, FCSI, PFP · Chief Retirement Strategist, RetirementIQUpdated · 3 min read
Deferring OAS adds 0.6% for each month you wait after 65, up to 36% more at 70. Waiting usually pays off if you live past about 84, and it can make particular sense if you are still working or have high income between 65 and 70, when much of your OAS would be clawed back anyway.
How OAS deferral works
Old Age Security normally starts at 65. You can defer it for up to five years, and each month you wait adds 0.6% to your pension for life, up to 36% at age 70. From October to December 2026, the maximum OAS is $762.50 a month for ages 65 to 74; at 75 OAS rises automatically by 10%, to $838.75.
A full OAS pension requires 40 years living in Canada after age 18. With 10 to 39 years you receive a partial pension, in 40ths. Deferring can let some people add years of residence before they start.
When deferring makes sense
- You are still working, or have high income, from 65 to 70. If your income is above the clawback threshold ($95,323 in 2026), some or all of your OAS would be recovered anyway. Deferring moves those payments to years when you keep more of them.
- You expect a long life. Starting at 70 overtakes starting at 65, in total dollars, at about age 84.
- You have savings to live on. Drawing RRSP money first can reduce future RRIF minimums and future clawback.
When it usually does not
- Your income is low enough to qualify for the Guaranteed Income Supplement, which is not paid while OAS is deferred.
- You have health concerns or a shorter life expectancy.
- You would have to borrow, or cut spending you value, to wait.
Raj turns 65 while still earning $120,000 a year. Taking OAS now, most of it would be clawed back. If he defers to 70 and retires at 67, he collects $1,037 a month from 70 (in today’s dollars) instead of $762.50, and keeps it, because his retirement income will be below the threshold.
What to do next
- Check whether you will be automatically enrolled (Service Canada sends a letter after your 64th birthday).
- If deferring, tell Service Canada; do not just ignore the letter.
- Estimate your income for each year from 65 to 70.
- Compare both start ages in the CPP and OAS calculator.
Free tools that help
Related questions
Can I start OAS and then defer it?
If you have already started OAS, you can ask to cancel it within six months of the first payment and repay what you received, and then defer. After that, the start date is fixed.
Is OAS taxable?
Yes. OAS is taxable income, and it is also subject to the OAS recovery tax (clawback) if your net income is above the annual threshold.
Does deferring OAS increase the GIS?
No. The Guaranteed Income Supplement is not paid while you defer OAS, and the deferral increase does not apply to the GIS. Lower-income seniors usually should not defer.
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