When to start CPP and OAS: the timing decision that changes your retirement

Every Canadian retiree makes two timing decisions that quietly determine 15+ years of monthly income: when to start Canada Pension Plan (CPP), and when to start Old Age Security (OAS). Most people default to age 65 because that's the 'normal' age, but the government builds in serious incentives — in both directions — for choosing differently. The best answer is rarely 65.

How CPP timing works

You can start CPP as early as age 60 or delay it as late as age 70. Every month you take it before 65, your monthly amount is reduced by 0.6% — 7.2% per year, or 36% total if you start at 60. Every month you delay past 65, it increases by 0.7% — 8.4% per year, or 42% more if you wait until 70. The maximum 2026 monthly CPP at age 65 is around $1,433; taken at 60 it's roughly $917; delayed to 70 it's roughly $2,035.

How OAS timing works

OAS is a separate program funded from general tax revenue. It starts by default at 65 but can be delayed up to age 70 for a 0.6%/month increase (7.2%/year, 36% total by 70). The 2026 monthly OAS at 65 is roughly $728 (higher after age 75 due to a 10% top-up). Unlike CPP, OAS cannot be started before 65.

The break-even math

The classic CPP question: 'If I take it early, when does the person who waited catch up?' The rough break-even between starting at 60 and starting at 65 is around age 74. Between 65 and 70, it's around age 82. So the honest question isn't 'is delaying better?' — it's 'do I expect to live past 82?' If yes, delaying wins. If no (or if you have health reasons to doubt it), starting earlier wins. Canadian life expectancy at 65 is currently around 84 for men and 87 for women, meaning statistically, delaying wins for most people who make it to 65 in reasonable health.

When to start earlier despite the math

• Health reasons or a family history suggesting shorter life expectancy
• You need the income to cover basic expenses and don't have other sources (like a bridge from savings)
• You want to reduce RRSP/RRIF withdrawals and let those investments grow further inside the shelter
• You're worried about future policy changes reducing benefits — a real but usually overstated risk

When to delay past 65

• You're in good health with a family history of long life
• You have enough savings to bridge the gap without depleting them
• You want inflation-protected, guaranteed lifetime income (both CPP and OAS are indexed to CPI)
• You want to reduce the OAS clawback risk by keeping other income lower during the delay period

A worked example

A 65-year-old with $600,000 in RRSPs and moderate health. Option A: start CPP + OAS now, withdraw $30,000/yr from RRSP → ~$50,000/yr total income. Option B: delay both to 70, withdraw $60,000/yr from RRSP for 5 years to bridge, then switch to $22,000/yr RRSP + enhanced CPP/OAS → ~$62,000/yr from age 70 onward, guaranteed for life. Break-even is around 82. If they expect to live to 88+, option B wins by $8,000–$12,000/year for the rest of their life — a meaningful, real, permanent raise.

The often-missed strategy: RRSP meltdown

Between retirement and starting CPP/OAS, your taxable income can be very low if you rely on TFSA and non-registered savings. This is the ideal time to withdraw from RRSPs at a low marginal rate — often 20–24% — before those forced withdrawals happen at RRIF conversion and combine with CPP + OAS to push you into a higher bracket. Households that plan a deliberate RRSP meltdown between ages 60–70 often reduce lifetime tax by tens of thousands compared to the default 'let it grow, take at 72' approach.

Coordination with a spouse

Couples can and should optimize as a household, not individually. Common pattern: the higher-CPP spouse delays to 70 for the enhanced permanent income; the lower-CPP spouse takes it at 60–65 for immediate cash flow. Survivor benefit rules mean the higher amount often persists longer, tilting the math further toward delaying whichever spouse has the larger benefit.

Frequently asked questions

Can I change my mind after starting? Yes — you can cancel CPP within 12 months of starting and repay what you've received. After 12 months, you're locked in.

Does working past 65 increase CPP? Yes, until age 70 — the Post-Retirement Benefit adds to your CPP for every year of additional contributions.

What about GIS? Guaranteed Income Supplement is for low-income seniors — starts at 65, income-tested, non-taxable. If you expect to be near the GIS threshold, minimize taxable retirement income (RRSP/RRIF/CPP) and lean on TFSA and OAS instead. The interaction is complex enough that low-income seniors often benefit from a paid consult.

The takeaway

Age 65 isn't a default — it's a middle option in a wide range. Take CPP and OAS as early as you must, as late as you can, and coordinate them with RRSP withdrawals to keep your lifetime tax bill low. This is one of the highest-value planning decisions in Canadian retirement and one of the most commonly under-thought.