Page 8 - December 2022 News On 7

WHEN SHOULD YOU BEGIN RECEIVING CPP AND OAS?
Canada Pension Plan (CPP) and Old Age Security (OAS) retirement benefits both have a normal start date of age 65. Yet, CPP
benefits can begin as early as age 60, or as late as age 70, while OAS can begin anywhere from age 65 to 70. When should
you start receiving your CPP and OAS benefits?

There are many different approaches and angles to consider. Early might make sense from one perspective, while late
might make sense from another perspective. Which is correct? While it’s often a matter of personal preference, it’s
important to consider your own unique circumstances when making this decision.
Timing considerations

When deciding when to start receiving your CPP and OAS retirement benefits, consider the following factors when making
your decision:
What is your current tax rate? CPP and OAS are both fully taxable. If you’re already in a high tax bracket in the current
year, it may be beneficial to defer your CPP and OAS to a later year.
What are your other sources of retirement income? For some, government pension income is a necessity when
employment income ceases, while others may have additional options available.
Are you subject to OAS claw back? OAS is income-tested, and subject to a 15% recovery tax. If you have a higher income
in the current year, deferring OAS may help minimize claw back.
Are you in good health? If you have a shortened life expectancy, it may make sense to start CPP and OAS benefits earlier
rather than later in order to maximize the overall benefit received.
What is your risk tolerance and current asset allocation? If you have a low risk tolerance, deferring CPP and OAS can
offer a better return than typical GIC (or similar) returns.
What is your lifestyle? There is tremendous value in having additional income while you’re still young and healthy
enough to enjoy it and make good use of it – it’s not just about the math.

Bottom Line
Determining the optimal time to begin your CPP and OAS benefits is not a one-size-fits-all type decision. Sound advice for
one person may be completely inappropriate for another. Consider the items indicated above, and any other relevant
considerations in your own personal situation to determine the best time to start your CPP and OAS retirement benefits.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Submitted by Scott Foster, 317 Declair Road, Madoc