Delaying OAS Payments Can Substantially Increase Your Monthly Amount

Most Canadians know they can start receiving Old Age Security at 65.

What many people don't realize is that you don't have to start OAS at 65.

You can choose to delay it all the way to age 70. And if you do, your monthly OAS payment can be substantially larger.

The increase is not based on investment returns, market performance, or how many years you contributed to the Canada Pension Plan. It is built directly into the OAS program.

For every month you delay OAS after age 65, your pension increases by 0.6%. Wait the full five years and the increase reaches 36%.

That's a meaningful increase in guaranteed, inflation-indexed retirement income.

But there is a catch.

Delaying OAS is not automatically the right decision for everyone. You are giving up payments today in exchange for a larger payment later.

So the real question is:

Should you take OAS at 65, or wait?

How Does Delaying OAS Work?

OAS can begin as early as age 65. You can also voluntarily defer the start of your OAS pension until any time before age 70.

The increase is 0.6% for every month you delay.

That works out to:

• 12 months: 7.2% increase
• 24 months: 14.4% increase
• 36 months: 21.6% increase
• 48 months: 28.8% increase
• 60 months: 36% increase

Once you reach age 70, the deferral increase stops. There is no additional increase for voluntarily delaying OAS beyond 70.

Your OAS amount can still change because of normal program indexation, but the voluntary deferral increase itself tops out at 36%.

How Much More Money Are We Talking About?

Let's put some actual numbers around it.

For July through September 2026, the maximum monthly OAS pension for someone aged 65 is $751.97.

If that same maximum pension were delayed all the way to age 70, the 36% deferral increase would produce a maximum monthly amount of $1,022.68, before considering subsequent indexation.

That's a difference of about:

$270.71 more per month

Or approximately:

$3,249 more per year

And that is for one person.

For a couple where both spouses qualify for similar OAS amounts, the difference can become considerably larger.

Of course, not everyone receives the maximum OAS. Your actual pension depends in part on your eligibility and Canadian residence history.

If you aren't sure how OAS works in the first place, our guide What Is OAS? is a good place to start.

The 36% Increase Is the Big Attraction

A 36% increase is easy to overlook because you're comparing a benefit you don't receive today with a benefit you might receive five years from now.

But think about what is happening.

You are effectively exchanging five years of OAS payments for a larger payment for the rest of your life.

And unlike an investment account, the larger OAS payment isn't dependent on whether the stock market has a good decade.

That makes OAS deferral particularly interesting for people who already have enough income to cover their expenses between 65 and 70.

What Is the Break-Even Age?

This is one of the most useful ways to think about the decision.

Suppose you could receive $750 per month starting at 65, but instead decide to wait until 70 for a 36% larger payment.

By waiting five years, you give up 60 months of payments.

Using a simplified example:

60 months × $750 = $45,000

At age 70, however, your monthly payment would be approximately $1,020 instead of $750.

The difference is about $270 per month.

To recover the roughly $45,000 of payments you didn't receive between 65 and 70:

$45,000 ÷ $270 ≈ 167 months

That's about 14 years.

So the simplified break-even point would be around age 84.

This is only an illustration. Actual break-even calculations are more complicated because OAS is indexed, tax rates can change, your actual OAS amount may not be the maximum, and delaying OAS can affect your overall tax and benefit situation.

Still, the basic concept is useful.

If you expect to live well beyond your early 80s, delaying OAS can become increasingly attractive because you have more years to collect the larger payment.

OAS Is Indexed to Inflation

There is another reason the larger payment can be valuable.

OAS is indexed to changes in the cost of living. That means the benefit is designed to increase over time rather than remaining permanently fixed at the amount you receive when you first claim.

The deferral increase is added to the benefit and then normal OAS indexation continues to apply.

This matters because retirement could last 25, 30, or even 40 years.

A larger indexed government benefit can become increasingly valuable as you get older.

That's one reason OAS should not necessarily be viewed simply as another source of cash flow for your first few years of retirement.

It can also be viewed as a way to increase your guaranteed income later in life.

Reason #1: You Don't Need the Money at 65

This is probably the simplest reason to delay OAS.

If you have a pension, investment income, employment income, or enough savings to comfortably cover your expenses, you may not need OAS immediately.

Taking money simply because it's available isn't always the best retirement strategy.

Sometimes it makes sense to leave a government benefit untouched while you use other sources of income.

For example, someone might use taxable investments between 65 and 70 while allowing their eventual OAS payment to become larger.

The correct strategy depends on the entire retirement plan, not just the OAS calculation.

Reason #2: You Want More Guaranteed Income Later

Retirement income needs can change as you age.

You might spend heavily on travel during your 60s and early 70s. Later, your lifestyle may become quieter.

But some expenses can move in the opposite direction.

Healthcare, support services, home modifications, and other costs can become more important later in life.

Having a larger amount of guaranteed income later can provide a valuable foundation.

Our article on Retirement Phases explores the idea that retirement spending and priorities can change significantly over time.

Reason #3: You Have a Long Life Expectancy

Nobody knows exactly how long they will live.

But if you have reason to believe you'll live well into your 80s or 90s, delaying OAS becomes more interesting.

A larger payment received for many years can eventually outweigh the value of receiving smaller payments earlier.

This is particularly relevant when you are thinking about longevity risk.

Your investment portfolio has to last as long as you do.

A larger government benefit later in life can reduce the amount you need to withdraw from your investments.

Reason #4: You Are Still Working

You don't have to retire at 65.

Some Canadians continue working well beyond 65, whether because they enjoy their work, want the additional income, or simply aren't ready to stop.

If you're earning a good salary and don't need OAS to cover your living expenses, delaying it may be worth considering.

There is another consideration here, too.

Higher income can make OAS less valuable if you are subject to the OAS recovery tax, commonly called the OAS clawback.

In 2026, the OAS repayment range begins at $95,323 of net world income for individuals aged 65 to 74, with different thresholds applying at age 75 and over.

If you're interested in how that works, see our detailed guide: OAS Clawback .

Reason #5: You Want to Reduce Early Retirement Withdrawals

Imagine that you retire at 65 with a large RRSP and a reasonable investment portfolio.

You could start OAS immediately and reduce the amount you withdraw from your investments.

Or you could delay OAS and use some of your investments for the first five years.

That second strategy may allow you to build a larger guaranteed income floor beginning at age 70.

But there is a tradeoff.

You're spending down assets that could otherwise remain invested.

Whether this makes sense depends on investment returns, taxes, withdrawal requirements, longevity, and the rest of your income.

That's why our Retirement Withdrawal Calculator can be useful when testing different income strategies.

Reason #6: You Want to Manage Your OAS Clawback

Here's where the decision gets more interesting.

Some people assume delaying OAS will automatically reduce their OAS clawback.

Not necessarily.

A larger OAS benefit can actually increase the amount of income exposed to the recovery tax once your income is above the applicable threshold.

On the other hand, delaying OAS while deliberately managing other taxable income can sometimes be part of a broader tax strategy.

For example, someone might draw down an RRSP or RRIF during their 60s, before larger government benefits begin.

This can potentially change the shape of taxable income over retirement.

It is not a one-size-fits-all strategy.

Your OAS decision should be coordinated with your RRSP, RRIF, TFSA, pension, investment income, and other sources of taxable income.

Reason #7: You Are Part of a Couple

Couples should be particularly careful about making OAS decisions independently.

One spouse might have a substantial pension while the other has relatively little retirement income.

One spouse may continue working while the other retires.

One may have significant RRSP assets while the other has a TFSA or defined-benefit pension.

That means there isn't necessarily a single "best" OAS start age for both spouses.

You need to look at the household.

Our Retirement Calculators for Couples can help illustrate why retirement planning for two people can be different from planning for one person.

Reason #8: You Want to Coordinate OAS With CPP

OAS and CPP are separate programs.

You don't have to start them at the same time.

CPP can begin as early as age 60, while OAS starts no earlier than 65. CPP also has its own financial incentives for delaying the start date.

That creates a number of possible combinations.

For example:

• Start CPP at 60 and OAS at 65.
• Start CPP at 65 and OAS at 65.
• Delay CPP and OAS.
• Start one benefit earlier and delay the other.
• Use investment savings to bridge the gap while delaying government benefits.

Our article 10 Reasons to Delay CPP looks at the CPP side of this decision.

The important point is that you don't necessarily have to make the CPP and OAS decisions as one combined decision.

Reason #9: You Want to Protect Against Longevity Risk

Here's one of the strongest arguments for delaying OAS.

Investment portfolios can run out.

OAS doesn't work that way.

Once you qualify and begin receiving the benefit, it is a government pension that continues for life, subject to the program's rules.

Delaying it means accepting less income now in exchange for a larger lifetime benefit later.

That's essentially a way of shifting more retirement income toward your later years.

For someone concerned about living a long time and exhausting their investment portfolio, that can be an important consideration.

Reason #10: You Want to Make Your Retirement Income More Predictable

Retirement portfolios are uncertain.

Markets go up. Markets go down.

Inflation changes. Interest rates change. Spending changes.

Government benefits can provide a more predictable foundation underneath all of that.

A larger OAS benefit beginning at 70 can reduce the amount of retirement income that needs to come from your investment portfolio every year.

That can give you more flexibility with the rest of your assets.

But There Are Good Reasons to Take OAS at 65

This is important.

Delaying OAS isn't automatically better.

The Government of Canada specifically recommends considering your health, financial situation, current and future income, and retirement plans when deciding when to start OAS.

If you need the money at 65, taking it at 65 may make more sense.

If your health or expected longevity makes a long deferral less attractive, that matters too.

And if you qualify for the Guaranteed Income Supplement, there is another major consideration.

You cannot receive GIS while you are voluntarily delaying OAS.

The same deferral decision can also affect eligibility for the Allowance for an eligible spouse or common-law partner.

So the 36% increase should never be viewed in isolation.

What If You Don't Receive the Maximum OAS?

The examples above use the maximum OAS benefit to make the math easy to understand.

Your actual benefit may be lower.

OAS eligibility and the amount you receive can depend on factors including your Canadian residence history.

If you receive only a partial OAS pension, the same 36% deferral increase can still apply when you delay from 65 to 70.

So don't assume that because you won't receive the maximum OAS, delaying isn't worth considering.

Run the numbers using your actual estimated benefit.

What Happens to GIS If You Delay?

This deserves special attention because it can completely change the calculation for lower-income retirees.

If you voluntarily defer OAS, you cannot receive the Guaranteed Income Supplement during the deferral period.

GIS also does not increase simply because you delayed OAS.

If GIS is an important part of your retirement income, delaying OAS may therefore produce a very different result than it would for someone with substantial investment or pension income.

Our article What Is GIS? provides more information about the Guaranteed Income Supplement.

What About OAS Clawback After Age 70?

Delaying OAS doesn't make the clawback disappear.

In fact, the larger monthly benefit could mean that more OAS is exposed to the recovery tax if your income is high enough.

This is one of the biggest reasons you shouldn't look at the 36% increase and stop there.

Imagine two retirees.

Retiree A has modest income from a pension and investments.

Retiree B has a large RRIF, substantial pension income, and significant investment income.

The larger OAS payment could be much more valuable to Retiree A than to Retiree B because Retiree B may lose part of the benefit through the OAS recovery tax.

This is exactly the kind of situation where retirement modeling becomes useful.

Don't Forget Taxes

OAS is taxable income.

So the amount appearing in your bank account will be less than the gross benefit if income tax is withheld or ultimately payable.

The tax implications also matter when comparing "take OAS at 65" with "delay OAS until 70."

If you have significant RRSP or RRIF income, pension income, employment income, or investment income, the difference can be more complicated than the simple 36% calculation suggests.

The goal isn't necessarily to maximize your gross government benefits.

The goal is to maximize the retirement income you can actually use while keeping the overall plan sustainable.

Think About OAS as Part of Your Entire Retirement Plan

This is where things get really interesting.

Suppose you're 64 and planning to retire at 65.

You have:

• A defined-benefit pension
• CPP
• OAS
• An RRSP
• A TFSA
• A non-registered investment account
• A paid-off home

You could simply start everything as soon as possible.

Or you could deliberately stagger your income.

Maybe you use some non-registered investments first.

Maybe you draw down part of your RRSP before mandatory RRIF withdrawals become an issue.

Maybe you delay CPP.

Maybe you delay OAS.

Maybe you use your TFSA to fill specific income gaps without creating additional taxable income.

Suddenly, the question isn't:

"Should I delay OAS?"

It's:

"How should I coordinate all of my retirement income sources?"

That's a much better question.

Model the Decision Before You Make It

This is exactly the type of decision where a retirement calculator can be more useful than a simple online OAS calculator.

An OAS calculator can tell you how much your benefit increases when you delay.

A retirement plan can show you what happens to everything else.

What happens to your RRSP balance?

What happens to your taxes?

What happens to your OAS clawback?

What happens to your investment withdrawals?

What happens to your income after age 70?

What happens if you live to 95?

What happens to the surviving spouse if one person dies first?

These questions are much harder to answer with a simple calculator.

Retirementize is designed to model these interactions by combining government benefits, pensions, investments, taxes, inflation, spending, and different retirement scenarios.

Our Retirement Withdrawal Calculator is particularly relevant if you're considering using investment assets to bridge the years before a larger OAS payment begins.

A Simple Example

Let's say Mary is 65 and qualifies for $750 per month in OAS.

She has enough other income to live comfortably without OAS for the next five years.

She decides to delay OAS until 70.

Ignoring future indexation for this simplified example, her monthly benefit would increase by 36%.

$750 × 1.36 = $1,020 per month

Mary gave up five years of $750 monthly payments, or $45,000, in exchange for an additional $270 per month for life beginning at 70.

If she lives long enough, the larger monthly payments eventually make up for the payments she skipped.

If she doesn't, taking OAS earlier could have produced more total payments.

That's the fundamental tradeoff.

Delaying OAS Is a Longevity Decision

At its core, delaying OAS is partly a bet on longevity.

You are saying:

"I am willing to give up some income now because I want a larger guaranteed income later."

That can be a powerful strategy.

But it isn't the only strategy.

Someone who needs the money now, has a shorter expected retirement, qualifies for GIS, or has other reasons to prioritize current income may reasonably reach a different conclusion.

There is no universal OAS start age that works for every Canadian.

Fun Facts About OAS

• OAS can be delayed for up to five years. The maximum voluntary deferral period takes the benefit from age 65 to age 70.
• The increase is 0.6% per month. That works out to 7.2% per year and a maximum 36% increase after five years.
• The maximum OAS payment at age 70 can be substantially higher than at 65. For July through September 2026, the maximum monthly amounts are $1,022.68 at age 70 versus $751.97 at age 65, before considering subsequent indexation.
• Delaying OAS does not increase GIS. You also cannot receive GIS during a voluntary OAS deferral period.
• OAS isn't the same as CPP. They are separate government programs with different eligibility rules and different incentives for delaying benefits.
• OAS can be partially repaid at higher incomes. The OAS recovery tax means that higher-income retirees need to consider the interaction between their OAS payment and their other sources of income.

Final Thoughts

Delaying OAS can substantially increase your monthly retirement income.

Wait from 65 to 70 and the OAS deferral increase reaches 36%. For someone who doesn't need the money immediately, that can be a very attractive way to build a larger guaranteed income later in retirement.

But bigger isn't automatically better.

The decision depends on your health, longevity, other income, taxes, investment portfolio, RRSP and RRIF balances, OAS clawback exposure, GIS eligibility, spouse's income, and how you want your retirement income to change over time.

That's why I wouldn't make the decision based solely on the 36% number.

Look at what happens to your entire retirement plan if you take OAS at 65, 66, 67, 68, 69, or 70.

You may discover that delaying OAS creates a stronger income floor later in life.

Or you may discover that taking it earlier gives you more flexibility when you actually want to spend the money.

Either way, the important thing is to make the decision as part of your overall retirement plan rather than treating OAS as an isolated benefit.

For more Canadian retirement planning information, see our articles on 10 Sources of Retirement Income in Canada , 10 Reasons to Delay CPP , OAS Clawback , and What Is OAS? .

And if you want to see how OAS interacts with your other retirement income, taxes, investments, and spending, build your plan with Retirementize and test different OAS start dates.