When Should You Start Collecting CPP and OAS?

As you start thinking about retirement, one of the trickiest decisions you’ll need to make is when to begin collecting your Canada Pension Plan (CPP) and Old Age Security (OAS) benefits.

According to a 2023 survey, 9 out of 10 Canadians say CPP/OAS are important sources of income. In this post, we’ll make a compelling case for considering delaying your benefits, while still looking at scenarios where taking them early makes sense.

A Refresher…

• CPP: Available as early as age 60. Taking it early reduces payments by 0.6% per month. Delaying until 70 increases payments by 0.7% per month.
• OAS: Available at age 65. Delaying until 70 increases payments by 0.6% per month.

Why Waiting Could Be the Right Move

Many Canadians are surprised to know that taking CPP at age 70 leads to 2.2x higher retirement payout than taking it at age 60.

• Breakeven Age: If you delay from 60 to 70, the "breakeven" (where you come out ahead in total dollars) is around age 77.
• More Security: An indexed pension is a powerful tool against inflation in your later years.

Case Study: Jane

• Scenario: Jane is 60.
• Take at 60: $640/month.
• Wait until 65: $1,000/month.
• Wait until 70: $1,420/month.

If Jane lives until 85, delaying is mathematically better. If she has health concerns, early might be better.

The Case for Taking Benefits Early

Math aside, every situation is unique. Here is when taking it early makes sense:

1. Immediate Income Need: You are retiring early and need cash flow now.

2. Easing into Retirement: You are working part-time and need to supplement income.

3. Health/Longevity: If you have a shortened life expectancy, waiting may not yield a positive return.

It All Comes Down to You…

Deciding when to start your CPP and OAS is a highly personal decision involving health, wealth, and risk tolerance. While the math often leans toward waiting, your life circumstances dictate the plan.

About Shea Sanche

Shea Sanche, CFP®, is the founder of Insight Planning Wealth Management and has worked as a financial advisor since 1999. He specializes in financial planning, retirement strategy, and decision frameworks for Canadian families and business owners, with a focus on simplifying complex financial decisions and long-term wealth planning.

He is the creator of Insight 360 OS, a decision and life-design system built to help clients navigate financial complexity, uncertainty, and major life transitions.

Common Questions About This Topic

How much do I need to retire in Canada?

It depends on after-tax spending, inflation, longevity, and how income sources fit together. Strong plans model CPP/OAS timing and withdrawal sequencing, not just a single number.

Should I take CPP early or defer it?

Deferring CPP increases guaranteed lifetime income, but the right choice depends on health, other income, and tax interactions (including OAS clawback).

What is the best withdrawal order in retirement?

There is no universal order. Strong plans coordinate RRSP/RRIF, TFSA, and non-registered withdrawals to manage marginal tax rates and benefit clawbacks over time.