When to take CPP and OAS: how your start age changes the pension

Basics8 min read · updated 3 November 2026 · 10 sources

Deciding when to take CPP and Old Age Security (OAS) sets most of a Canadian's guaranteed income for life. The Canada Pension Plan can start at any age from 60 to 70, OAS from 65 to 70, and both pay more the longer you wait. Both rise with inflation, so the difference holds in today's dollars for the rest of your life. This article explains the rules as of November 3, 2026, the break-even ages and why they mislead, the OAS clawback and when an early start still makes sense. Amounts are in Canadian dollars.

How CPP changes with your start age

The standard start age for the CPP retirement pension is 65. Each month you start earlier reduces the pension by 0.6%, so starting at 60 costs 36%. Each month you wait after 65 raises it by 0.7%, so starting at 70 adds 42% (ESDC, CPP start age 2026). The change applies for life.

How much you get at 65 depends on your contributions over your working life. The maximum for a pension starting in January 2026 is $1,507.65 a month (ESDC, maximum benefit amounts 2026), while the average for new retirement pensions was $858.34 a month in July 2026 (ESDC, CPP amounts 2026). Contributions in 2026 are based on earnings up to $74,600, with additional contributions for the CPP enhancement on earnings up to $85,000 (ESDC, maximum benefit amounts 2026). Your own estimate by start age is in your My Service Canada Account.

At the maximum, the choice is between $964.90 a month from 60 and $2,140.86 from 70. Waiting until 70 pays more than double, 2.2 times, the monthly pension of a start at 60 (MacDonald 2024).

How OAS changes with your start age

The OAS pension does not depend on work but on residence: you need at least 10 years in Canada after age 18 to qualify and 40 years for the full pension; with fewer years, you get a share of years / 40 (ESDC, OAS amount 2026). OAS starts at 65 at the earliest. Each month you defer it adds 0.6%, up to 36% at 70 (ESDC, OAS start age 2026).

From October to December 2026, the maximum is $762.50 a month from 65 to 74 and $838.75 from 75 (ESDC, maximum benefit amounts 2026); the pension rises by 10% automatically from the month after your 75th birthday (ESDC, OAS amount 2026).

Break-even ages and why they mislead

The usual way to compare start ages is the break-even age: from when on has the person who waited received more in total than the person who started early?

The break-even view treats the pension like an investment that has to pay off. It is better seen as insurance: a pension indexed to inflation that pays for as long as you live, which covers exactly the risk that savings struggle with, a very long life. Bonnie-Jeanne MacDonald of the National Institute on Ageing estimates that a typical Canadian who takes CPP at 60 rather than 70 gives up more than $100,000 of secure lifetime income in today's dollars, yet fewer than 1% of Canadians wait until 70 (MacDonald 2020).

The OAS recovery tax

Higher incomes repay part of the OAS pension. The recovery tax is 15% of net income above a threshold: $93,454 of 2025 income, repaid from July 2026 to June 2027, and $95,323 of 2026 income, repaid from July 2027 to June 2028. For ages 65 to 74, the pension is fully clawed back at a net income of $155,320 in 2026 (ESDC, OAS recovery tax 2026).

Low incomes and the GIS

For low-income seniors, the Guaranteed Income Supplement adds up to $1,138.90 a month for a single person who receives OAS, from October to December 2026 (ESDC, maximum benefit amounts 2026). The supplement shrinks with other income, by 50 or 75 cents per dollar depending on family situation (Laurin and Poschmann 2010). CPP payments and RRIF withdrawals count as income; TFSA withdrawals do not.

For someone who expects to receive the GIS, part of every extra dollar of CPP from waiting is offset by a smaller supplement, so the gain from delaying is much smaller. This is the main exception to the case for waiting, and it is also why a TFSA usually beats an RRSP for people with modest incomes; see TFSA vs RRSP.

Working while collecting

Unlike Social Security in the United States, CPP has no earnings test: working does not reduce the pension. If you take CPP and keep working before 70, you keep contributing, and the contributions earn a post-retirement benefit, a small lifelong addition to your pension: at most $54.69 a month for one year of contributions at 65 in 2026. From 65, you can choose to stop contributing (ESDC, post-retirement benefit 2026).

Bridging the gap with savings

Waiting until 70 means living on something else in the meantime. A common approach is to retire, draw on RRSP or RRIF savings first and start CPP later. This turns savings, which can run out, into a larger pension indexed to inflation, and it shrinks the RRIF that would later produce large minimum withdrawals. The cost is a heavier draw on the portfolio in the first years of retirement, which raises the sequence risk of a market fall early on.

When an earlier start makes sense

• Poor health or a short life expectancy.
• No other money to live on: an early pension is better than high-interest debt.
• An expected GIS: the supplement offsets part of the gain from waiting.
• Savings that comfortably cover spending: the insurance value of a larger pension matters less.

Common mistakes

• Deciding by break-even age alone: the larger financial risk is a long life.
• Starting OAS at 65 while still working with an income that claws most of it back.
• Forgetting that both pensions are taxable: CPP, OAS and RRIF withdrawals all count as income.
• Ignoring the residence rule: fewer than 40 years in Canada after 18 means a partial OAS pension.
• Planning the pensions without the savings: the start ages, the RRSP withdrawals and the TFSA belong in one plan.

This article explains general federal rules as of November 3, 2026, and is not financial advice. Residents of Quebec receive the Quebec Pension Plan instead of the CPP, with similar but separate rules. Check your own estimates in My Service Canada Account before you decide.

This article explains a method; it is not investment or tax advice. Worked examples are simplified and rounded. All terms in the glossary.