Submitted by: Glen Izzard, CIM; Investment Advisor, Portfolio Manager
One of the most common questions I hear from people approaching retirement is surprisingly simple: “When should I start taking my CPP and OAS benefits?”
Most people assume the answer is straightforward. After all, you’ve worked hard, paid into the system, and reached retirement age. Why not start collecting right away?
But what if waiting could significantly increase the amount you receive for the rest of your life?
For many Canadians, the decision of when to start receiving Canada Pension Plan (CPP) and Old Age Security (OAS) benefits may be one of the most important retirement income choices they make.
The challenge is that there is no one-size-fits-all answer.
However, there are two questions that can help point you in the right direction:
1. Are you in reasonably good health?
2. Do you need the income today to cover your living expenses?
If your answer is “yes” to the first question and “no” to the second, waiting may be worth serious consideration.
Many Canadians are surprised to learn that CPP and OAS payments increase when benefits are delayed. CPP can begin as early as age 60 or as late as age 70. If you start CPP before age 65, your payment is permanently reduced. If you delay beyond age 65, your benefit increases by 0.7% per month, or 8.4% per year, up to age 70.
Waiting until age 70 can increase your CPP payment by as much as 42%.
OAS works similarly. You can begin receiving benefits at age 65 or delay until age 70. For every month you wait, your payment increases by 0.6%, up to a maximum increase of 36% at age 70.
That means a larger guaranteed, inflation-adjusted income stream for the rest of your life.
Understanding the Break-Even Point
Of course, waiting means giving up payments you could have received earlier.
This is where the concept of a break-even age becomes important.
For CPP:
- Taking CPP at age 60 versus age 65 generally reaches a break-even point around age 74.
- Taking CPP at age 65 versus age 70 typically reaches a break-even point around age 82.
In other words, if you live beyond those ages, the total amount received from delaying often exceeds what you would have collected by starting earlier.
Considering that many Canadians today are living well into their 80s and 90s, this is a decision worth evaluating carefully.
The Three-Question Retirement Checklist
Before filing your CPP or OAS application, consider these three questions:
If you are healthy, active, and have a family history of longevity, delaying benefits may provide greater lifetime value.
✓ 2. Do You Need Income Today?
If you have sufficient savings, a workplace pension, or other income sources covering your expenses, you may have the flexibility to wait.
✓ 3. What Is Your Goal?
Are you focused on maximizing monthly income, protecting against longevity risk, or creating greater certainty later in retirement? Your answer can help determine the best timing strategy.
The Bottom Line
Many Canadians spend years deciding when to retire.
Far fewer spend time deciding when to start their government benefits. Yet that decision can affect your retirement income for decades. Starting CPP and OAS as early as possible isn’t always the wrong choice. For some people, it makes perfect sense. But for others, delaying benefits could result in thousands of additional dollars of guaranteed lifetime income.
Before making a decision, take a few minutes to review your health, your cash flow needs, and your long-term goals. Because sometimes the smartest financial move isn’t collecting sooner. It’s waiting for a bigger reward.
When it comes to CPP and OAS, patience may not just be a virtue—it may be one of the most valuable investments you make in retirement.
Not sure when to start CPP and OAS? A conversation with a financial advisor can help you maximize your retirement income and avoid costly mistakes.
About Glen Izzard
Based in Meaford, Ontario, Glen Izzard is a Chartered Investment Manager (CIM®) and Discretionary Portfolio Manager with over 15 years of experience helping clients navigate investing, cash flow, estate planning, and retirement transitions.
Known for his client-first approach, Glen focuses on building clarity, confidence, and long-term results. An active community supporter, he serves as treasurer for the Meaford Chamber of Commerce. Glen’s mission is simple: provide thoughtful guidance, practical strategies, and a steady hand so clients can stay on course — financially and in life.
Please contact: 905-407-4500 glen.izzard@owm.com, www.greenpeaksecurities.ca
This material is provided for informational purposes only and is not intended to provide legal, tax, or financial planning advice by Optimize Wealth Management. Always consult a licensed professional before making decisions regarding your personal financial circumstances or estate plan.
