How to Maximize Your Retirement Income

When it comes to retirement, the decisions you make around timing can have a lasting impact on your financial security—especially when it comes to government benefits like the Canada Pension Plan (CPP) and Old Age Security (OAS).

While both programs provide a steady stream of retirement income, the amount you receive depends largely on when you choose to start collecting.

Timing Matters: Early vs. Delayed CPP & OAS

• CPP: You can start collecting as early as age 60, but if you delay until 70, your monthly benefit could be up to 42% higher.
• OAS: Eligible at 65 but deferring until 70 can increase your payments by 36%.

Delaying may not be right for everyone, but it’s worth running the numbers. The difference can mean thousands of dollars more over the course of your retirement.

What to Consider Before You Decide

Choosing when to start CPP or OAS isn’t just about maximizing income—it’s about aligning your choices with your lifestyle, health, and financial needs. Here are some important factors to weigh:

• Life Expectancy: The longer you live, the more beneficial it is to delay.
• Other Income Sources: Do you have RRSPs, a pension, or investment income to rely on in the meantime?
• Tax Considerations: Starting benefits earlier may result in more years of taxable income, which can affect OAS clawbacks and your overall tax bracket.
• Cash Flow Needs: Sometimes you need the money sooner, and that’s okay—just make sure it’s a decision, not a default.

Blending Strategy with Flexibility

One smart approach is to use your personal savings (RRSPs, TFSAs, non-registered accounts) to fund the early years of retirement while deferring government benefits. This can allow your CPP and OAS to grow while reducing your taxable income today.

Every person’s situation is different—and that’s why planning matters.

Source: www.canada.ca