CPP and OAS: How Much Will I Get?

The most expensive retirement mistake most Canadians make has nothing to do with poor investments or excessive spending. It happens when they make a single decision without proper analysis—a decision that permanently reduces their lifetime retirement income by $50,000, $100,000, or more. That decision is when to start collecting Canada Pension Plan (CPP) and Old Age Security (OAS) benefits.

For an average Canadian retiree, the difference between optimal and suboptimal benefit timing exceeds $75,000 in lifetime income. For someone with maximum CPP entitlement, the difference easily reaches six figures. Yet most Canadians spend more time researching which television to buy than analyzing when to start their government retirement benefits.

This guide explains how CPP and OAS benefits work, what affects your payment amounts, and how to use our calculator to determine your optimal claiming strategy based on your specific circumstances.

The Misconception That Costs Retirees Thousands

Most Canadians believe they should take CPP as soon as possible at age 60 because "you never know how long you'll live, and a bird in the hand is worth two in the bush." This intuition feels compelling—you've contributed your entire working life, so why not start collecting immediately?

The critical insight this reasoning misses: CPP and OAS aren't simple bank accounts where you withdraw your contributions. They're actuarially designed pension programs with remarkably generous adjustments for early and delayed claiming that fundamentally change the mathematics of optimal timing.

The real decision isn't "early money versus late money." It's smaller monthly payments for more years versus substantially larger monthly payments for fewer years. Once you understand the actual adjustment factors—which are significantly more advantageous for delayed claiming than most people realize—the optimal strategy becomes far less obvious than conventional wisdom suggests.

How CPP Payment Amounts Work

CPP can be started anywhere between age 60 and age 70. The benefit adjustments work as follows:

Starting early reduces your benefit by 0.6% for each month before age 65. Someone starting at age 60 receives a 36% permanent reduction. If your age-65 entitlement is $1,200 monthly, starting at 60 gives you just $768 monthly instead.

Starting at age 65 provides 100% of your calculated benefit based on your contribution history, which you can find on your CPP Statement of Contributions through your My Service Canada Account.

Delaying increases your benefit by 0.7% for each month after age 65, up to age 70. Waiting until 70 provides a 42% permanent increase. That same $1,200 monthly benefit becomes $1,704 at age 70.

Consider the dramatic range: someone who waits until 70 receives more than double the monthly payment compared to someone who starts at 60, despite having identical contribution histories. For reference, the average CPP benefit in 2025 is $845 monthly at age 65, while the maximum is $1,433 monthly.

The government designs these adjustments to be approximately "actuarially neutral" at average population life expectancy. In theory, the average Canadian should receive similar total lifetime benefits regardless of when they start—smaller payments for more years should roughly equal larger payments for fewer years.

However, what's neutral for the "average" Canadian isn't neutral for your specific situation. Your personal longevity expectations, tax situation, retirement income needs, and household coordination opportunities all affect whether early or delayed claiming makes more sense for you individually.

A Note About Quebec Pension Plan (QPP)

If you work in Quebec, you contribute to the Quebec Pension Plan rather than CPP. While QPP and CPP are separate programs administered independently, they function similarly for benefit timing purposes, with one significant advantage for Quebec residents.

QPP uses the same early claiming rules as CPP. You can start QPP benefits as early as age 60 with a 36% reduction, using the same 0.6% reduction per month before age 65. Maximum QPP benefits in 2025 are essentially equivalent to CPP maximums.

However, QPP offers more generous deferral options than CPP. While CPP can only be delayed until age 70, QPP can be deferred until age 72. From age 65 to 70, QPP increases by 0.7% per month (identical to CPP), providing a 42% increase by age 70. The additional deferral from age 70 to 72 provides another 16.8% increase (0.7% per month for 24 months), bringing the total increase to 58.8% compared to age 65. This means a Quebec resident entitled to $1,200 monthly at age 65 would receive $1,906 monthly by waiting until age 72, compared to the $1,704 maximum available to CPP recipients who can only delay to age 70.

This extended deferral option gives Quebec residents with strong longevity expectations and no immediate income need a strategic advantage not available to other Canadians. The breakeven age for deferring to 72 versus 70 occurs around age 83 to 84, making it attractive for those planning for longevity past age 85.

QPP is managed by Retraite Québec rather than Service Canada, contribution rates may differ slightly in any given year, and the calculation of your benefit uses your Quebec earnings history. If you worked in both Quebec and other provinces during your career, your benefits are coordinated between the two plans to ensure you receive the appropriate total amount.

For QPP timing decisions, the strategic principles discussed in this guide apply equally. The calculator can be used with your QPP entitlement amounts through age 70, though it does not currently model the additional deferral to age 72 available for QPP. Tax considerations, survivor benefit strategies, and household coordination approaches remain identical. Simply substitute your QPP benefit amount from your Retraite Québec statement wherever this guide references CPP amounts.

How OAS Payment Amounts Work

Old Age Security operates differently from CPP in several important ways. Unlike CPP, which requires contributions, OAS requires only Canadian residence—specifically 40 years of residence after age 18 for full OAS, with partial benefits available with as little as 10 years of residence (20 years if living abroad when you apply).

OAS normally begins at age 65, but you can voluntarily defer up to age 70. For each month you delay after age 65, your benefit increases by 0.6%, providing a 36% increase if you defer the full five years to age 70. Additionally, OAS automatically increases by 10% at age 75 regardless of when you started receiving benefits.

For someone entitled to full OAS of $735 monthly in 2025, starting at age 65 provides $735 initially, stepping up to $809 at age 75. Deferring to age 70 provides $1,000 initially, stepping up to $1,100 at age 75.

Two critical OAS considerations affect timing decisions. First, the OAS clawback (recovery tax) begins at $90,997 in net income for 2025, with benefits completely eliminated around $148,000. High-income retirees should consider deferring OAS to years when their income is lower, potentially avoiding clawback entirely while also earning deferral credits.

Second, Guaranteed Income Supplement (GIS) is only available after you start OAS and typically provides greater total benefits than deferral credits for low-income seniors. If you'll qualify for GIS, you should generally not defer OAS.

The Breakeven Question: When Does Delaying Pay Off?

Everyone wants to know the breakeven age—the point where cumulative benefits from delaying equal cumulative benefits from starting early. Live beyond the breakeven age, and delayed claiming provides more total lifetime income. Die before it, and early claiming would have been better.

For someone comparing CPP at age 60 versus age 65, the breakeven occurs around age 74. Comparing age 65 versus age 70 for CPP, the breakeven is approximately age 81. For OAS deferral from 65 to 70, with its smaller deferral credits, the breakeven age is approximately 82 to 83.

These breakeven ages provide a foundation for decision-making, but simplified breakeven analyses miss several financially significant factors that materially affect real-world outcomes.

What Simple Breakeven Calculations Miss

Most breakeven analyses stop at "live to age X and strategy Y wins." This overlooks several crucial considerations that should inform your decision.

Purchasing power matters because CPP and OAS are fully indexed to the Consumer Price Index. Your benefits automatically increase every year to match inflation. This inflation protection becomes increasingly valuable the longer you live, yet most breakeven analyses treat indexed and non-indexed dollars as equivalent. A private inflation-indexed annuity with similar characteristics would cost 30% to 50% more than a non-indexed annuity.

Taxation significantly affects the real value of benefits. Benefits received in your 60s while you're still working or have other substantial income may be taxed at 35% to 45% marginal rates. Benefits received in your 70s after other income sources have declined might face only 22% to 25% marginal rates. After accounting for taxes, the real breakeven age can shift by two to three years depending on your income trajectory.

Investment alternatives theoretically advantage early claiming if you invest the difference rather than spending it, achieve reasonable after-tax returns, and maintain this discipline over decades. Most retirees don't satisfy all three conditions. Additionally, CPP and OAS provide inflation protection and longevity insurance that's virtually impossible to replicate through private investing at comparable cost.

Longevity uncertainty is perhaps the most important factor. You don't know when you'll die, and the breakeven analysis only tells you the optimal strategy if you live to exactly age X. What you really need to consider is the range of possible lifespans and which strategy performs better across that range.

The Longevity Factor Most People Underestimate

This is where most Canadians make their critical error: they dramatically underestimate their life expectancy.

Average life expectancy at birth in Canada is approximately 82 years. However, if you've already reached age 65, your remaining life expectancy is considerably longer because you've survived the mortality risk of earlier decades. For a 65-year-old woman in Canada today, there is a 52% probability of reaching age 90. For men, approximately 42% will reach age 90.

Read that again: if you're a woman retiring today at age 65, you have better than even odds of living another 25 years. Yet most people plan their retirement using average life expectancy of 85, which means more than half of retirees will underfund their later retirement years.

This longevity risk becomes more severe the longer you live. Running out of money at age 82 is a three-year problem. Running out of money at age 82 when you live to 95 is a thirteen-year catastrophe. This is exactly why maximizing inflation-protected lifetime income through delayed CPP and OAS claiming provides such valuable insurance against longevity risk.

Before making any benefit timing decision, you should use our Life Expectancy Calculator to see your personalized longevity probabilities based on current age, gender, and health factors. The results might surprise you and should materially influence your claiming strategy.

CPP and OAS as Longevity Insurance

Government retirement benefits function as longevity insurance, not just retirement income. Longevity insurance protects you against the financial risk of outliving your savings and being financially vulnerable in your 80s and 90s.

When you delay CPP and OAS to receive higher monthly payments, you're strengthening your longevity insurance. You accept lower cumulative benefits if you die young in exchange for much stronger financial protection if you live to 90 or 95. Those higher monthly payments, fully indexed to inflation, provide reliable income no matter how long you live—even if you completely exhaust all other assets.

Consider delayed claiming as buying insurance against longevity risk. You "pay" the premium by forgoing benefits in your 60s and early 70s when you likely have other assets and potentially other income sources. You receive the benefit in your 80s and 90s when your portfolio might be substantially depleted and your options for generating new income are extremely limited.

For people with substantial assets exceeding $1 million, this insurance value is especially important. Your investment portfolio will last much longer if supplemented by $3,000 monthly in government benefits rather than $1,800 monthly. Running Monte Carlo retirement simulations with different benefit timing scenarios reveals that delayed claiming dramatically reduces the probability of portfolio exhaustion before death.

For people with modest assets below $500,000, early claiming might make more sense because immediate income needs are more pressing than longevity insurance, and the portfolio might be exhausted before late life regardless. However, even in this scenario, if you do happen to live to 95, having maximized CPP and OAS becomes extremely valuable when all other resources are gone.

Tax Considerations That Change the Math

CPP and OAS are fully taxable income at your marginal rate. The tax implications can significantly affect optimal timing strategy.

If you're still working in your 60s, have rental income, or are making RRSP withdrawals, adding CPP benefits at age 60 might push you into higher tax brackets. You could pay 35% to 45% tax on that CPP income, dramatically reducing the real value of early benefits. A 60-year-old still earning $75,000 who adds $768 monthly CPP faces marginal rates around 30% to 35% in most provinces, making that $768 really worth only $500 to $540 after tax.

Once you stop working, exhaust RRSP or RRIF mandatory minimums, or sell rental properties, your income in your 70s might be substantially lower. Receiving larger CPP and OAS benefits during these lower-income years means keeping more of each dollar after tax. The same person waiting until age 70 to receive $1,704 monthly might face only 22% to 25% marginal rates, making the real after-tax value around $1,278 to $1,329 monthly.

The OAS clawback adds another layer of complexity. OAS begins being reduced at 15% for every dollar of net income above $90,997 in 2025, with complete elimination around $148,000. High-income retirees should consider deferring OAS to years when their income is lower. Even if you remain subject to partial clawback, the 36% deferral credit means you recover a larger amount after the 15% clawback is applied. Strategic RRSP withdrawal timing can help minimize years of high income that trigger clawback.

Survivor Benefits and Household Coordination

Couples face additional complexity because survivor benefits and household coordination affect optimal timing strategies.

When one spouse dies, the surviving spouse does not simply receive both CPP pensions. Instead, the survivor receives what's called a "combined retirement and survivor benefit" calculated under complex rules in Section 58 of the CPP regulations. The survivor receives the higher of their own CPP retirement pension, or a combined amount equal to their own pension plus up to 60% of the deceased spouse's retirement pension, subject to the maximum CPP retirement pension.

This creates an important strategic consideration: if one spouse significantly outlives the other, the higher-earning spouse's benefit timing decision affects the household for both spouses' remaining lifetimes.

Consider a couple where one spouse receives maximum CPP of $1,704 monthly from delaying to age 70, while the other spouse receives $600 monthly. When the higher-earning spouse dies, the surviving spouse receives approximately $1,704 (their own $600 plus 60% of the deceased's $1,704, capped at the maximum). Had the higher-earning spouse taken CPP early at $1,090 monthly instead, the survivor would receive approximately $1,254 after their death. The difference over 15 remaining years for the surviving spouse is approximately $81,000 in additional survivor benefits.

This survivor benefit consideration generally favours the higher-earning spouse delaying benefits to maximize the survivor amount, the lower-earning spouse potentially claiming earlier since their benefit has less impact on survivor calculations, and the younger spouse (likely to outlive their partner) delaying benefits since their own pension is what they'll primarily rely on during widowhood.

Our CPP Survivorship Calculator can help you estimate survivor benefits in your specific situation, which should inform household benefit timing strategy.

Common Scenarios and Strategic Approaches

Early Retirement Without Pension: Someone laid off at age 59 with modest RRSP savings but no defined benefit pension needs CPP income to avoid depleting retirement savings too quickly. Taking CPP at age 60 or 62 provides critical income to bridge to age 65, though this comes at the cost of permanently reduced benefits. The calculator can quantify this tradeoff against your longevity expectations.

Healthy Professional With Longevity: A 64-year-old professional still working part-time with substantial investments and family history of longevity past age 90 should strongly consider delaying both CPP and OAS to age 70. Without immediate need for the income, the 42% CPP increase and 36% OAS increase, combined with long expected lifespan, provides substantial lifetime advantage. Working past 65 with high earned income might also trigger OAS clawback, making deferral even more attractive.

High-Income Retiree Facing OAS Clawback: Someone with investment income exceeding $150,000 annually receives zero OAS at age 65 due to complete clawback. Deferring OAS to age 70 is essentially a free option—no benefit is lost from ages 65 to 70 since clawback would eliminate it anyway. At age 70, even if still subject to partial clawback, the 36% deferral credit means recovering more net benefit. Investment income may also decline by age 70 due to portfolio depletion, potentially bringing income below the clawback threshold.

Couple With Age Gap: When spouses have a significant age difference, the younger spouse's timing decision affects a longer period and potential survivor benefits. If the older spouse already receives CPP and the household has comfortable income from pensions, the younger spouse might delay their CPP to age 70 to maximize the benefit they'll receive over their longer expected lifespan and to optimize survivor benefits if they outlive their partner.

Modest Savings With Health Concerns: Someone with modest CPP entitlement, limited RRSP savings, and significant health concerns affecting life expectancy faces a different calculation. Starting CPP at age 60 provides immediate income that reduces pressure on modest savings. While health concerns suggest planning for below-average longevity, remember that CPP and OAS are inflation-protected, which becomes increasingly valuable if you live longer than expected despite health factors. Additionally, low-income retirees likely qualify for GIS, which only begins after OAS starts.

How to Use the CPP & OAS Calculator

Our calculator helps you move beyond simplified breakeven calculations to see the complete picture based on your specific situation. Here's how to use it effectively:

Start by entering your CPP entitlement—your estimated monthly benefit at age 65, which appears on your CPP Statement of Contributions available through your My Service Canada Account. If you don't have your statement, the average CPP in 2025 is $845 monthly, with a maximum of $1,433 monthly. If you contributed for 35 years or more at or near maximum earnings, you likely qualify for 80% to 100% of maximum. Contribution gaps or lower earnings put you below average.

Next, enter your OAS entitlement at age 65. For most Canadian-born citizens who lived in Canada their entire adult life, this is the full OAS amount of $735 monthly. If you immigrated to Canada as an adult or spent significant time living abroad, your OAS is prorated based on years of Canadian residence after age 18 using the formula: years of residence divided by 40, multiplied by $735. Also be aware that if you plan to retire outside of Canada, you must have spent at least 20 years in Canada prior to that to receive OAS.

Setting your life expectancy is perhaps the most important input. The calculator defaults to age 85, but your personal expectation should consider family history, health status, gender (women on average live three to four years longer than men), and socioeconomic factors. Don't underestimate your longevity—the majority of Canadians who reach age 65 will live past age 85. Use our Life Expectancy Calculator for personalized longevity probabilities before making this decision. Another thing to be aware of is that life expectancy increases as you get older: a Canadian woman who has reached 65 has a 52% chance of living to 90 -- but a 30 year old only has a 44% chance.

Use the sliders to compare different timing scenarios. The baseline comparison of CPP at 65 and OAS at 65 provides your reference point. Compare this against early retirement scenarios (CPP at 60, OAS at 65), delayed strategies (CPP at 70, OAS at 70), and hybrid approaches (CPP at 60 with OAS at 70, which takes CPP early to fund retirement while delaying OAS to maximize later benefits).

The calculator shows three critical pieces of information. The cumulative benefits chart visualizes total benefits received over time for different strategies, with the crossover point showing your breakeven age. The monthly combined benefits display shows exactly how much income you'd receive each month under different scenarios for retirement budgeting and cash flow planning. The lifetime value analysis provides the bottom line—total benefits received by your target life expectancy in today's dollars, accounting for inflation indexing, showing the absolute advantage or disadvantage of different strategies.

Beyond the mathematical answer, consider the broader context: other retirement income sources (defined benefit pension, RRSP or RRIF withdrawals, rental income), whether you're still working and earning employment income, your health and longevity confidence, your need for income now versus later, your spouse's benefit timing and survivor benefit implications, and OAS clawback risk if you're a high-income retiree.

Finally, if you're currently old enough to receive CPP and OAS, you can see the impact of waiting a bit longer by selecting Advanced Options and checking "Compare with my current age".

Making Your Decision

Rather than searching for a universal right answer, use this framework for your specific situation.

Calculate your baseline scenario using the calculator to determine lifetime benefits with standard timing at age 65 for both CPP and OAS. Assess longevity factors by evaluating family history, health status, lifestyle, and gender to set a realistic life expectancy for planning purposes, erring toward longer rather than shorter. Evaluate your financial need to determine whether you need CPP or OAS income immediately to fund retirement, or whether other assets can fund your needs through age 65 or 70.

Consider taxation by calculating your marginal tax rates during different life stages to understand how much you'll really keep after tax from early benefits versus later benefits. Model alternatives using the calculator to compare early, standard, and delayed timing scenarios, looking at both monthly income and lifetime totals. Factor in household coordination for couples by considering both spouses' benefits, longevity expectations, and survivor implications, modeling different combinations of claiming ages.

Account for uncertainty by recognizing that no one knows exactly when they'll die. Consider which strategy provides the best risk-adjusted outcome across a range of scenarios rather than optimizing for a single assumed lifespan. Finally, make a decision but remain flexible—you can adjust your CPP start date anytime between 60 and 70, so you don't need to make an irrevocable choice years in advance.

Why This Decision Matters

CPP and OAS represent guaranteed, inflation-indexed lifetime income that cannot be outlived, cannot be seized by creditors in bankruptcy, and continues regardless of investment market performance or economic conditions. These benefits form the foundation of retirement security for most Canadians.

The decisions you make about when to start these benefits are permanent. You cannot undo them, restart them, or adjust them after the fact. Once you start CPP at age 60, you're locked into that reduced benefit level (adjusted only for inflation) for the rest of your life, even if you later realize that waiting would have been dramatically better.

This is why investing time to analyze your circumstances, run the numbers, and make an informed decision is worthwhile. These decisions affect 25 to 35 years of retirement income and can easily swing your lifetime benefits by $50,000 to $150,000 depending on your entitlement levels and household situation.

Most Canadians will spend weeks researching mortgages that might save them $100 monthly, but make CPP and OAS timing decisions casually based on vague conventional wisdom that could cost them $500 to $1,000 monthly in their later retirement years. Don't be one of those people.

Try the Calculator

Our CPP & OAS Timing Calculator is completely free to use, requires no registration, and provides instant visualization of how different timing strategies affect your specific situation.

Enter your CPP and OAS entitlements, adjust your life expectancy, and immediately see monthly income under different timing scenarios, cumulative lifetime benefits based on your longevity assumptions, the breakeven age where delayed claiming becomes advantageous, and detailed year-by-year benefit projections including the OAS age-75 step-up.

Whether you're approaching age 60 and facing your first CPP decision, planning future retirement timing strategies, or coordinating benefits with your spouse, the calculator provides the data-driven insights you need to make the right choice for your situation.

This is a decision worth tens of thousands of dollars. It deserves more than a guess based on what your neighbour did or vague conventional wisdom. Take ten minutes with the calculator to see your actual numbers.