Deferring OAS to 70: what the 36% increase means over a lifetime

How OAS deferral works

OAS is normally available from 65. You can choose a later start, month by month, for up to 60 months. For every month of deferral, the pension rises by 0.6%, so a full five-year delay adds 36%. After 70 there's no further increase, so waiting longer only means missed payments.

OAS is also adjusted quarterly for inflation, and that indexing continues whether or not you defer. The deferral increase is applied on top of the indexed amount when payments begin.

Some people receive OAS automatically, while others need to apply. If you plan to defer, check your letter from Service Canada and respond as it describes, so that payments don't begin before you intend.

If OAS has already started, Service Canada may allow you to cancel and restart it within a limited time after payments begin, generally by repaying what you received. Confirm whether that option applies to you with Service Canada before relying on it.

What deferral does to the monthly amount

Using the maximum OAS for ages 65–74 in the October–December 2026 quarter, here is how the monthly amount changes by start age. Each step is an extra 12 months of 0.6% increases.

From 75, OAS is 10% higher than the 65–74 amount, and that increase applies on top of any deferral increase too.

Because the increase is a flat 0.6% a month on the base amount, each extra year of waiting adds the same $54.90 a month at this quarter's rate, rather than a growing amount.

Lifetime totals: Dev's example

Suppose Dev, 64, plans to stop working at 65 and expects about $45,000 a year of other income from a small pension and RRIF withdrawals. That keeps him well below the clawback threshold whether he starts OAS at 65 or 70, so the comparison is purely about timing.

The calculator adds up OAS payments received up to age 90, in today's dollars with no discounting. Starting at 65, Dev would receive about $242,475. Starting at 70, the larger pension adds up to about $267,546 — roughly $25,000 more despite five fewer years of payments.

Change the horizon and the answer moves. If payments stop at 85, starting at 65 totals about $192,150 and starting at 70 about $199,104, with a start at 69 slightly ahead at about $200,348. If payments continue to 95, a start at 70 totals about $335,988 versus about $292,800 at 65.

Dev's example deliberately keeps his income steady and below the threshold. That isolates the pure timing effect — the part of the decision the 0.6% rule controls. Taxes, benefits and spending choices all sit on top of it.

Adding a time-value assumption

A dollar received at 65 can be spent or invested earlier than a dollar received at 70. To reflect that, the calculator can discount later payments. Using an illustrative 2% real discount rate (an assumption, not a forecast), Dev's lifetime total to 90 would be about $192,050 starting at 65 and about $201,361 starting at 70, with 69 slightly ahead at about $201,588.

The advantage of deferral narrows but doesn't disappear in that illustration. A higher discount rate or a shorter horizon would narrow it further, while a longer horizon would widen it. Longevity is the variable no one knows in advance, which is why many people look at several horizons side by side.

Bridging the years between 65 and 70

Deferring OAS means the income has to come from somewhere else for up to five years. For Dev, that might mean larger RRSP or RRIF withdrawals from 65 to 70, or drawing on savings in a TFSA or non-registered account.

Drawing more from an RRSP early can lower the balance that later RRIF minimums are based on. That can reduce taxable income in your 70s and 80s, which is part of the logic in an RRSP meltdown. The trade-off is more tax in the bridge years and a smaller registered balance if markets fall.

The withdrawal order tool and the retirement plan tool let you test a later OAS start alongside different withdrawal patterns.

Deferral, the clawback and the GIS

For higher-income retirees, a deferred OAS pension is larger, so more of it can be exposed to the 15% recovery tax once payments begin. Our OAS clawback guide shows how that works with real thresholds.

For lower-income retirees, the trade-off is different. The GIS is not paid for months when OAS is deferred, and deferral does not increase the GIS. Someone who expects to qualify for the GIS may give up more by waiting than the 0.6% monthly increase returns. Confirm how this applies to you with Service Canada, and see our GIS guide.

OAS is a federal program, so deferral works the same way for Quebec residents. Only the provincial tax side differs, and our estimates don't include Quebec provincial income tax.

Coordinating OAS with CPP timing

CPP has its own, larger deferral increase — 0.7% per month after 65, up to 42% at 70 — and its own reduction for starting early. Some people delay both, some delay only one, and some start both at 65.

Because the two pensions use different percentages, delaying one while drawing the other is a common way to compare options. The CPP start age tool and our CPP timing guide cover that side, and the OAS guide brings both together.

For a couple, the choices multiply: each spouse picks a start age for each pension. The couples page and the retirement timeline help line these decisions up year by year.

Questions to work through before deferring

Once payments are under way, the start date generally can't be pushed later, so it's worth thinking the choice through first. These questions help frame it:

• What will you live on between 65 and your chosen start date, and what does that do to your taxes in those years?
• Is your income likely to fall in the clawback range once OAS starts, and would a larger OAS make that worse?
• Might you qualify for the GIS at any point, either now or later, for example after a spouse's death?
• What horizon are you planning for? Planning to 95 is a common stress test, not a prediction.
• If you have a spouse, how does deferral fit with their OAS and CPP timing?