Why Waiting Until 70 for Retirement Benefits Could Hurt Some Canadians
Right now, a major retirement question is quietly shaping the future of millions of Canadians and it comes down to one simple decision. Should you wait until age 70 to collect your government pension, or take it earlier. The answer is not as straightforward as it sounds and for many people, waiting could actually do more harm than good.
The Canada Pension Plan, known as CPP and Old Age Security, or OAS, are designed to provide steady income in retirement. You can start CPP as early as age 60 and OAS at 65. But both programs reward patience. If you delay, monthly payments rise sharply, with CPP increasing up to 42 percent by age 70 and OAS rising by 36 percent.
On paper, that looks like a great deal. Bigger cheques for life. But experts warn this strategy is not right for everyone and that is where many people get it wrong.
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The first red flag is cash flow. If you retire without strong savings, or without other reliable income, waiting may not be realistic. Bills do not pause while you defer benefits. Rent, food, utilities and healthcare costs keep coming. For people who need the money to live, taking CPP or OAS earlier can be the safer choice.
Health is another critical factor. Delaying benefits only pays off if you live long enough to enjoy those higher payments. If someone is in poor health, or has a family history of shorter life expectancy, waiting until 70 could mean leaving money uncollected. In those cases, taking benefits earlier may provide more value and peace of mind.
Taxes also matter. OAS is income tested. Higher income in retirement can trigger a clawback, meaning some or all of that benefit must be repaid. For higher earners, deferring OAS could simply push them into a higher tax bill later.
Despite these risks, most Canadians still claim their pensions early. Nearly 90 percent take CPP before age 65. That tells us many people are making decisions based on necessity, not optimization.
The real takeaway here is this. Deferring CPP and OAS can be powerful, but only if your health is strong, your savings are solid and your long-term outlook supports it. Retirement planning is not about chasing the biggest number. It is about matching income to your real life.
This decision can shape decades of financial security. Stay informed, understand your options and keep watching as we continue to break down the choices that matter most for your future.
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