When’s the best time to start collecting CPP and OAS?

You can start collecting your CPP and OAS benefits in your 60s, but is it better to hold off for another few years? Here’s what to keep in mind before you tap into these pensions.

Thinking about how you’ll support yourself after you retire? The balance in your savings account or a registered retirement savings plan (RRSP) might come to mind. That’s a great start. But when you’re planning for your retirement, don’t forget the money you could get from the government. That’s the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) and Old Age Security (OAS). These are public pensions designed for Canadians who are no longer working.

Mark Coutts is a Sun Life Financial advisor and Certified Financial Planner™ with Coutts Financial Services Inc. “People often forget that CPP and OAS will form part of their nest egg or they underestimate their value,” he says. “Once they realize that these benefits alone could potentially pay up to $20,000 per year, per person, they begin to feel a lot more enthusiastic about their financial future.”

So, how do you make sure you’re getting the most you can out of CPP and OAS? It all comes down to timing. As you approach your retirement, you’ll need to sort out whether you want to start collecting money sooner or later. “Many Canadians like to take advantage of these pensions as soon as they can,” Coutts says. “But here’s the deal: The government will pay you more if you wait.”

Before diving into the dollar amounts and advantages of delaying your CPP and OAS, let’s look at how they work.

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