Deciding When to Start OAS: Timing, Deferral, and Maximizing Your Payments

While Old Age Security (OAS) benefits are available starting at age 65, you’re not required to begin payments immediately. You have the option to defer OAS for up to five years, which increases the monthly payment you’ll receive for life.

Deciding when to start OAS is a personal choice that depends on your income needs, health, and overall retirement strategy. Making an informed timing decision ensures you maximize the long-term value of this guaranteed benefit.

Your OAS Start Options: Age 65 to 70

You can begin receiving OAS:

At age 65, which is the standard start age.
At any time up to age 70, by deferring your first payment.

For each month you defer after turning 65, your OAS payment increases by a set percentage. This adjustment is permanent, meaning the longer you defer (up to 70), the larger your monthly payment will be for life.

Optimize helps you evaluate whether immediate payments or deferral provides more long-term benefit in your situation.

Factors to Consider When Timing OAS

Deciding when to start OAS involves multiple personal and financial considerations:

Immediate cash flow needs: Do you need the income at 65, or can you defer to boost future payments?
Life expectancy and health: If you anticipate a longer retirement, deferring OAS can provide greater lifetime income.
Tax efficiency: Delaying OAS may reduce clawback risk by aligning with lower-income years.
Other retirement income sources: The timing of RRSP withdrawals, CPP benefits, and pensions should be coordinated with OAS decisions.
Lifestyle goals and flexibility: Some prefer guaranteed income sooner for peace of mind, while others prioritize maximizing long-term benefits.

Optimize guides you through these factors to develop a timing strategy tailored to your retirement goals.

The Trade-Off Between Early and Deferred OAS

Starting OAS at 65 provides income sooner, but deferring increases the monthly amount permanently. The choice involves:

A short-term trade-off between immediate and larger future payments.
Considering your breakeven age, where deferring surpasses the cumulative benefit of starting early.
Factoring in inflation protection, since all OAS payments are indexed to maintain purchasing power.

Optimize provides scenario modeling to help visualize the long-term impact of your OAS timing choice.

How OAS Timing Fits Into Your Retirement Income Strategy

OAS is one piece of your retirement income puzzle. The decision of when to start should be made in the context of:

Planning Area	Integration with OAS Timing
CPP start age	Timing decisions should be aligned with OAS for balanced income.
RRSP/RRIF withdrawals	Early withdrawals may bridge income before OAS begins.
Tax bracket management	Deferring OAS can help smooth taxable income over retirement years.
OAS clawback exposure	Coordinating timing reduces risk of clawback during high-income years.
Liquidity needs	Ensures access to assets in early retirement while waiting for higher OAS.

How Optimize Helps You Decide the Best Time to Start OAS

At Optimize, we provide personalized advice to help you make the most of your OAS benefits. We help you:

Model the long-term impact of different OAS start ages.
Balance cash flow needs with tax and benefit optimization.
Coordinate OAS timing with CPP and personal savings strategies.
Manage OAS clawback risks through strategic planning.
Adjust your plan as your needs and circumstances evolve.