When Should I Take OAS? Old Age Security Timing Strategy
Claim OAS at 65 or defer to 70? Learn the break-even age, how the 7.2%/year deferral increase works, OAS clawback rules, and how to coordinate OAS with CPP.
What Is OAS and Who Qualifies?
Old Age Security (OAS) is a monthly government pension available to Canadian seniors at age 65. Unlike CPP, OAS is based on residency — not employment contributions. You need to have lived in Canada for at least 10 years after age 18 to be eligible, and at least 40 years for the maximum payment.
OAS Key Facts for 2026
- Maximum monthly OAS at age 65: approximately $707/month (indexed quarterly to CPI)
- Seniors 75+ receive an automatic 10% top-up (approximately $778/month)
- OAS can be deferred from 65 to 70 for a 7.2% per year increase
- OAS is taxable income and subject to the Recovery Tax (clawback) above a threshold
Most Canadians who worked here their whole lives receive the maximum OAS. Partial OAS is paid proportionally — 1/40th per year of Canadian residency after age 18. So someone who lived in Canada for 30 years after 18 receives 30/40 = 75% of the maximum.
OAS at 65 vs. Deferral to 70: The Numbers
If you defer OAS, your monthly payment increases by 0.6% per month — 7.2% per year. Using $707/month at age 65 as the base:
| Start Age | Monthly OAS | Annual OAS | vs. Age 65 |
|---|---|---|---|
| 65 | $707 | $8,484 | — |
| 66 | $758 | $9,096 | +7.2% |
| 67 | $809 | $9,708 | +14.4% |
| 68 | $860 | $10,320 | +21.6% |
| 69 | $911 | $10,932 | +28.8% |
| 70 | $962 | $11,544 | +36% |
Approximate figures. OAS is indexed quarterly to inflation — actual amounts increase over time.
Break-even analysis: Deferring from 65 to 70 means giving up 5 years of payments ($42,420 total at $707/month). You need to live past approximately age 82 to come out ahead by deferring to 70 versus taking OAS at 65. If you're in good health and have a family history of longevity, deferral is usually the better financial decision.
Take OAS at 65 if…
- You have health concerns or a shorter life expectancy
- You need income immediately to cover living expenses
- Your savings are limited and you can't bridge 5 years without OAS
- Your income is low enough that OAS clawback isn't a factor
Defer OAS to 70 if…
- You're in excellent health and expect to live past 82
- You have RRSP, TFSA, or pension income to cover ages 65–70
- You want longevity insurance and higher inflation-indexed income
- Your income at 65–69 would trigger OAS clawback anyway
The OAS Recovery Tax: When Deferral Avoids Clawback
If your net income exceeds the 2026 OAS clawback threshold (approximately $93,454), the CRA claws back 15 cents of OAS for every dollar above that threshold. OAS is fully eliminated at approximately $151,000 in net income.
Key insight: If your income is high in early retirement (large RRSP withdrawals, employment, rental income) and will drop later, deferring OAS until your income normalizes means you'll collect more OAS with less clawback. TFSA withdrawals don't count toward the clawback threshold — a powerful reason to draw from TFSA first.
You can see your projected OAS clawback exposure for every year of retirement using the free Solutech Retirement Planner. Adjust your RRSP withdrawal timing and see in real time how it affects your net OAS.
Coordinating CPP and OAS: Four Common Strategies
CPP and OAS are independent programs — you can mix and match your claiming ages to suit your situation:
Both at 65
Simplest approach. You get all government income at once. Works well if you need cash flow and are in average health. No complex bridging required.
CPP early (60), OAS deferred (70)
CPP provides income during ages 60–70. OAS kicks in at 70 at a 36% premium. Effective for people who leave employment at 60 but want longevity protection.
Both deferred to 70
Maximum lifetime income for those in excellent health with sufficient savings. CPP at 70 is 42% higher than at 65; OAS at 70 is 36% higher. Requires assets or a pension to bridge the 65–70 gap.
OAS at 65, CPP deferred to 70
Take OAS immediately to reduce RRSP/TFSA drawdowns, while letting CPP grow to its maximum. Useful when income from ages 65–70 would otherwise be too low to cover expenses.
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Frequently Asked Questions
Do I have to apply for OAS at 65, or does it start automatically?
Service Canada may auto-enroll you if your tax records confirm eligibility, but it's safest to apply directly. Apply 6 months before you want payments to start. If deferring, you can apply later.
Can I defer OAS past 70?
No. Age 70 is the maximum deferral age. If you don't apply by 70, Service Canada will begin payments automatically at the maximum deferred amount.
Do I still receive OAS if I live outside Canada?
Yes, if you meet residency requirements. However, some countries have tax treaties that affect how OAS is taxed. Check with Service Canada if you retire abroad.
How does OAS interact with large RRSP withdrawals?
RRSP withdrawals count as income and can trigger OAS clawback. If you plan to take large RRSP withdrawals in the same year as OAS starts, consider whether deferring OAS or front-loading withdrawals makes more sense.
Can I stop OAS payments if I change my mind?
Yes. Under certain conditions, you can cancel OAS within 6 months of your first payment and repay the amounts received. After 6 months, you cannot cancel. Think carefully before starting early.