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Coordinating CPP and OAS Timing for Maximum Benefit

Learn how to coordinate CPP and OAS payments for maximum benefits

Two of the most important decisions in retirement planning are when to start Canada Pension Plan (CPP) and Old Age Security (OAS) benefits. While each can be taken independently, coordinating their timing thoughtfully can significantly enhance your financial security, reduce tax exposure, and support a more stable income in retirement.

With both programs offering flexible start dates, the real opportunity lies in how they work together—not just in isolation. At Optimize, we help you make these decisions in tandem, ensuring your choices align with your broader goals and long-term financial plan.

CPP and OAS: Timing Options and Flexibility

CPP benefits can start as early as age 60 or be deferred until age 70. Starting early means lower monthly payments for life, while delaying increases the monthly amount by a permanent percentage.

OAS starts as early as age 65, but you can also delay it to age 70, earning a permanent boost to your benefit for every month of deferral.

The range of choices gives you control—but also complexity. Taking one benefit early and the other late may make sense in some cases, while aligning them could simplify income planning. The optimal strategy depends on your unique income needs, health, lifestyle, and tax position.

Why Coordination Matters

Taking CPP and OAS at different times can lead to:

  • Uneven cash flow in retirement, with some years flush and others tight.

  • Higher tax brackets in some years due to overlapping income sources.

  • OAS clawbacks, triggered if total income climbs too high in a single year.

  • Disjointed planning, where CPP and OAS choices conflict with RRSP/RRIF drawdowns or TFSA use.

Coordinating the two programs allows you to:

  • Create income stability by managing when guaranteed payments begin.

  • Control tax exposure by reducing the chance of taxable income spikes.

  • Delay withdrawals from personal savings, allowing investments to grow longer.

  • Minimize OAS clawbacks, especially in high-income years.

Key Factors to Consider in Coordination

When planning the start of CPP and OAS, consider the following together—not separately:

1. Cash Flow Needs

If you need immediate income at 60 or 65, you might begin CPP and/or OAS early. But if you have other resources, delaying one or both can boost guaranteed income in your 70s and beyond.

2. Life Expectancy and Health

The longer you expect to live, the more value you gain from delaying CPP and OAS. Coordination allows you to balance risk: starting one benefit early for flexibility, while deferring the other to protect long-term longevity risk.

3. Tax Efficiency

Strategically timing one benefit early and deferring the other can help avoid crossing into higher tax brackets. For example, delaying OAS while taking modest CPP can prevent overlapping with large RRIF withdrawals later.

4. RRSP/RRIF Withdrawal Timing

Delaying both CPP and OAS may leave a gap between retirement and government benefits. That gap can be ideal for withdrawing RRSPs early at lower tax rates, reducing the size of future RRIF withdrawals (which could otherwise push you into OAS clawback territory).

5. Avoiding OAS Clawback

Since OAS is income-tested, large CPP or RRIF payments in later years could trigger clawbacks. Delaying OAS to align with lower-income years, or managing CPP carefully, helps preserve more of your OAS benefit.

Coordinated Timing Scenarios

Here are a few simplified examples of how different coordination strategies can support your goals:

  • CPP Early, OAS Deferred: Ideal for those who retire early but want to reduce OAS clawback risk later by spacing out income.

  • Both at 65: Useful for those who want predictable income right at standard retirement age, without delaying benefits.

  • CPP and OAS Both Deferred: Maximizes lifetime guaranteed income for healthy individuals expecting long retirements and who can fund early years from TFSAs or non-registered accounts.

  • CPP Delayed, OAS at 65: Provides some guaranteed income while allowing larger CPP later to hedge longevity risk.

Optimize uses scenario modeling to compare these options and calculate your breakeven age—when the cumulative benefits of delaying surpass those of starting early.

How Optimize Helps You Coordinate CPP and OAS

We take a personalized, data-informed approach to help you decide when to start CPP and OAS, not just in isolation, but as part of a complete retirement strategy. With Optimize, you get:

  • Cash flow modeling showing how different start ages impact lifetime income.

  • Tax optimization planning, coordinating benefit timing with RRSP, RRIF, and TFSA withdrawals.

  • Clawback risk analysis, identifying when income might trigger OAS clawbacks and how to avoid them.

  • Health and lifestyle insights, helping you weigh the value of early vs. delayed income in the context of your real life—not just spreadsheets.

  • Ongoing plan adjustments, so as your situation evolves, your benefit timing decisions remain aligned with your goals.

Bringing It All Together

Deciding when to start CPP and OAS is one of the most important—and often overlooked—parts of retirement planning. But the real power comes when you coordinate the two, turning static benefits into a dynamic strategy that supports your lifestyle, protects your assets, and maximizes your guaranteed income over time.

With Optimize, you're never making these choices alone. We walk through every variable with you, helping ensure your retirement income plan isn’t just functional—it’s coordinated, resilient, and built for the long term.