The Canada Pension Plan (CPP) and Old Age Security (OAS) serve as the foundation of retirement income for Canadians. Think of them as your retirement paycheque—one that you can choose to collect early at a but at a reduced amount or delay for a significant increase.

Making an informed decision on when to start can have a lasting impact on your financial security. As always, please feel free to reach out for additional insights on how best you can maximize your CPP & OAS payments.

Below we outline 5 of the major takeaways to consider: 

1. Unlocking Your Retirement Paycheque

Understanding CPP and OAS is essential for making the most of your retirement income. While many Canadians start collecting as soon as they’re eligible, delaying can significantly boost benefits.

2. The CPP Paycheque: Collect Now or Get a Raise Later?

CPP is a contributory pension plan that provides retirement, disability, survivor, and death benefits. Key considerations include:

• Eligibility starts at age 60, with flexible start options until age 70.
• The amount received depends on lifetime contributions.
• Early collection (before 65) reduces benefits by 0.6% per month (7.2% annually). Collecting at age 60 results in a 36% reduction.
• Delaying past 65 increases benefits by 0.7% per month (8.4% annually), leading to a 42% boost by age 70.

Example: If the maximum CPP benefit at 65 is $1,433/month, collecting at 60 would reduce it to $1,088.90/month, while delaying to 70 would increase it to $2,480.48/month, a $13,837/year difference.