CPP and OAS together form the base layer of Canadian retirement income. For many retirees, they make up 40–60% of total income. Getting the timing wrong on either one can cost you $50,000 or more over your lifetime.
This guide breaks down both programs: what they pay, when to start them, how the OAS clawback works, and the specific strategies you can use to maximize your combined government benefits. We also link to SimRetire's calculators so you can model your own scenario.
Short answer
In 2026, Canada.ca lists the maximum CPP retirement pension at 65 as $1,507.65/month. OAS is $743.05/month for ages 65 to 74 and $817.36/month for ages 75+ for April to June 2026. The OAS recovery tax starts at $93,454 for the July 2026 to June 2027 period, based on 2025 net world income.
Overview of CPP and OAS Benefits
Canada Pension Plan (CPP)
- • Earnings-based: you contribute, you earn
- • Subject to your work history and contributions
- • Standard age: 65 (early: 60, late: 70)
- • 2026 max at 65: $1,507.65/month
- • 2026 average new benefit at 65: $925.35/month
- • Indexed to CPI annually
Old Age Security (OAS)
- • Residency-based: no work history needed
- • Available at 65 (deferrable to 70)
- • Apr-Jun 2026 max: $743.05/month (65-74)
- • Apr-Jun 2026 max: $817.36/month (75+)
- • Subject to recovery tax above $93,454 for Jul 2026-Jun 2027
- • 10% bonus at age 75
Here's what many people miss: CPP is based on your earnings history, while OAS is based on how long you've lived in Canada. You need 40 years of Canadian residency after age 18 for the full OAS pension. If you immigrated or lived abroad, you may get a partial amount.
When to Start CPP and OAS: Early vs Late
CPP Timing
You can start CPP as early as 60 or as late as 70. Starting early reduces your pension by 0.6% per month before 65 (a 36% cut at 60). Delaying past 65 increases it by 0.7% per month (a 42% bonus at 70).
CPP at Different Starting Ages
Age 60
-36%
about $965/month before indexing differences
Age 65
100%
$1,507.65/month max in 2026
Age 70
+42%
about $2,141/month before indexing differences
The "breakeven" point — where delaying pays off — typically falls around age 74–78, depending on your specific situation. If you live past the breakeven age, you come out ahead by waiting. If you have health concerns or need the cash now, starting earlier may make sense.
OAS Timing
OAS works similarly but with different numbers. You can defer from 65 to 70 for a 0.6% per month increase — a 36% bonus at 70. The breakeven is around age 82–83.
But there's a twist: for the July 2026 to June 2027 recovery-tax period, OAS recovery starts when 2025 net world income is above $93,454. Canada.ca also lists an estimated $95,323 start threshold for the July 2027 to June 2028 period based on 2026 income. Deferring OAS can make sense if you expect your taxable income to drop later, but the decision depends on your health, cash-flow needs, tax bracket, and other income.
OAS Clawback and Income Planning
The Clawback Zone
Threshold
$93,454
clawback starts
Rate
15%
per dollar over threshold
Full Clawback
$152,062
full recovery for ages 65-74
The clawback is based on your net income on line 23600 of your tax return. RRIF withdrawals, pension income, rental income, and capital gains all count. TFSA withdrawals do not. That's why income smoothing — pulling from different account types in different years — is so powerful.
Canada.ca lists the full recovery point for July 2026 to June 2027 as $152,062 for ages 65 to 74 and $157,923 for ages 75+.
Strategies to Avoid or Reduce Clawback
RRSP meltdown before OAS years: Use a controlled RRSP meltdown strategy to reduce future RRIF minimums before they stack on top of CPP, OAS and pension income.
Pension income splitting: Split up to 50% of eligible pension income with your spouse to keep both incomes below the threshold.
TFSA as top-up: Use TFSA withdrawals for variable expenses. They don't appear on your tax return and won't trigger clawback.
How SimRetire Tools Help You Model CPP/OAS Decisions
Timing decisions on CPP and OAS are personal — they depend on your health, other income, marital status, and longevity expectations. Our calculators let you model your exact scenario:
OAS Deferral Optimizer
Find your personal breakeven age and see how deferral affects your total lifetime OAS income.
Open CalculatorCPP Breakeven Calculator
Compare CPP at 60, 65, and 70. See the crossover age where delaying starts to pay off.
Open CalculatorFurther Reading
We've published several deep-dive articles on CPP and OAS topics:
- 2026 Canadian Retirement Numbers — Current CPP, OAS, RRSP, TFSA and RRIF reference amounts
- The $100 Oil Retirement Stress Test — How energy inflation affects your benefit purchasing power
- CPP as Longevity Insurance — Why CPP deferral is the cheapest annuity in Canada
- OAS Clawback Thresholds 2026 — Tactical income management around the clawback zone
Related tools
Official sources for 2026 amounts
Frequently Asked Questions
How much does OAS increase if I delay to 70?
OAS increases by 0.6% for each month you delay past 65, up to a maximum of 36% at age 70. Using the April to June 2026 maximum of $743.05/month for ages 65 to 74, a full five-year deferral would be about $1,010.55/month before future quarterly indexation.
What is the CPP breakeven age?
It depends on your specific amounts, but typically the breakeven between starting CPP at 60 vs 65 is around age 74, and between 65 vs 70 is around age 78. Our CPP Breakeven Calculator can give you your exact number.
Can I receive both CPP and OAS?
Yes. CPP and OAS are completely separate programs. CPP is based on your work contributions. OAS is based on Canadian residency. Most retirees receive both, and they start at the same or different ages depending on your strategy.
Does CPP count toward OAS clawback income?
Yes. CPP payments are taxable income and count toward the net income threshold that triggers OAS clawback. This is one reason some people defer OAS past 65 — to let their other income sources (RRIF, CPP) settle before adding OAS on top.
SimRetire Editorial Team
Independent retirement education publisher
SimRetire publishes general Canadian retirement education using dated government sources, stated assumptions, and worked examples. We are not a financial-planning, accounting, legal, tax, or medical practice, and our material is not a substitute for personal professional advice.