CPP & OAS: Canada's Government Pension Benefits

CPP (Canada Pension Plan) and OAS (Old Age Security) are two government-funded retirement income sources. CPP is earnings-based — you get what you contributed. OAS is universal — everyone 65+ gets it, though it claws back at high income levels. Together, they provide ~40–50% of average retirement income. You need personal savings for the rest.

CPP: Maximum $1,364/Month at 65 (2026)

• Average monthly benefit: ~$760 at age 65 (2026)
• Maximum monthly benefit: ~$1,364 at age 65 (2026)
• Deferral bonus: Wait until 70 to increase by 42% (8.4% per year × 5 years)
• Early draw penalty: Start at 60, get 36% less (~$490/month)
• Break-even age: Start at 60 vs. 65 = break-even ~age 75–76

OAS: ~$727/Month at 65 (2026), Subject to Clawback

• Monthly benefit at 65: ~$727 (indexed, means-tested)
• Deferral bonus: Wait until 70 to increase by 36% (7.2% per year × 5 years)
• Clawback threshold: ~$90,000 net income triggers clawback at 15% per dollar over threshold
• Full clawback: At ~$146,000 income, you lose entire OAS benefit
• GIS (Guaranteed Income Supplement): Extra $970/month if single and low income (~$22k)

Strategic Timing: Start Early, At 65, Or Defer?

Start at 60 if: you're in poor health, need money now, or will spend it (versus investing). Start at 65 if: you have moderate health, need income, and want flexibility. Defer to 70 if: you're healthy, have other income, or expect longevity. Each year you wait, your monthly benefit increases 8.4% (CPP) or 7.2% (OAS). For every year you defer past 65, you gain ~1 year of breakeven returns.