OAS Deferral

The math: 0.6% per month, capped at 70

The OAS pension normally starts at 65, but you can delay it by up to 60 months. Every month of deferral permanently increases your pension by 0.6%, which compounds nothing and hides nothing: wait a full year, get 7.2% more; wait five years, get the maximum 36% more at age 70. There is no gain whatsoever from waiting past 70, and unlike the CPP, OAS can never start before 65.

On the maximum pension of about $742.31 per month at 65 (as of July 2026), the full deferral raises the cheque to roughly $1,009 per month, indexed to inflation, for life.

The breakeven: roughly age 81 to 82

Deferring trades five years of smaller cheques for a lifetime of bigger ones. Starting at 70 instead of 65, the cumulative payments catch up at roughly age 81 to 82. Live well past that and deferral wins; die earlier and it loses. Since a 65-year-old Canadian can reasonably expect to reach the mid to late 80s, healthy retirees with family longevity have a genuine case for waiting.

The OAS clawback cuts both ways in this decision, and it pays to be honest about both directions. If your income between 65 and 70 sits above the clawback threshold ($95,323 for 2026, as of July 2026), deferring means you skip payments that would have been partly or fully clawed back anyway, which makes deferral cheaper than it looks. But the bigger cheque you eventually collect is clawed back from the same threshold, so a permanently high income just means more OAS exposed to the 15% recovery tax later. Deferral shelters nothing by itself; it works best when income is high temporarily in the 65 to 70 window and lower afterward.

That is also where your RRIF fits in: drawing down registered money in the 65 to 70 window while OAS is deferred can smooth taxable income and shrink forced withdrawals later.

The GIS warning: low-income seniors should almost never defer

This is the trap that matters most. The GIS, the non-taxable supplement for low-income seniors, is only payable while you are receiving OAS. Defer OAS and you defer GIS too, and there is no 36% bonus on GIS to compensate: every deferred month of GIS is simply gone.

For a senior entitled to meaningful GIS, the forfeited dollars are usually worth far more than the eventual OAS boost. If there is any real chance you qualify for GIS, take OAS at 65. Full stop.

OAS deferral vs CPP deferral: two separate decisions

CPP deferral pays better: 0.7% per month, for 42% more at 70, versus 0.6% and 36% for OAS. CPP can also start as early as 60 at a reduced amount, an option OAS simply does not have. Because the terms differ, the decisions are independent: many planners defer CPP first, since each deferred month buys more there, while starting OAS at 65. You can defer both, one, or neither, and the right mix depends on your health, savings, and income pattern.