Purtzki, Johansen + Associates


Should you defer the OAS pension until 70?

Purtzki OAS

If you defer the OAS pension to age 70, the pension will be 36% greater than at age 65. Many choose to take the OAS at age 65 for several reasons. You need the pension for retirement income. The 36% increase in OAS at age 70 is less than the 42% bump in the CPP benefits. Another disadvantage is that if you die before 70, you will never have received any OAS pension. The OAS death benefit is minimal.

If you believe that the inflation rate of currently 8% will continue in the future, there is an incentive to defer the OAS pension to age 70 since the government fully protects pensions from inflation.

In addition, many taxpayers are still earning significant personal income after age 65 which would cause any OAS benefits to be clawed back when filing their tax returns. Therefore, if one is expected to be near the higher tax brackets levels after age 65, then the timing of applying for OAS should be deferred until age 70.

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