OAS Deferral to 70: Is the Extra $200/Month Worth It?

If you’re exploring OAS deferral to 70 Canada as a retirement strategy, you’re not alone—and the decision could mean an extra $200 or more per month for life. Here’s a surprising fact: Very few Canadians — estimated at a small single-digit percentage — actually delay their OAS beyond 65, despite the significant financial benefit for those who qualify.. In this guide, you’ll learn exactly how much more you’ll receive by waiting, when you’ll break even, who should defer (and who absolutely shouldn’t), and how this decision impacts other benefits like GIS. Let’s crunch the numbers together.

How Does OAS Deferral to 70 Canada Actually Work?

Old Age Security is a monthly benefit available to most Canadians aged 65 and older who meet residency requirements. Unlike CPP, you don’t need to have worked or contributed to qualify. In 2026, the maximum OAS payment at age 65 is approximately $743.05 per month (or about $8,724 annually).

Here’s where the deferral option gets interesting: for every month you delay OAS benefits Canada past 65, your payment increases by 0.6%. That adds up to 7.2% more per year, or a maximum of 36% more if you wait until 70.

The Math Behind Your Increased Payment

Let’s put real numbers to this. If you’re entitled to the maximum OAS at 65 ($743.05/month), delaying to 70 would give you:

$743.05 × 1.36 = $1,010.55 per month

That’s an extra $267.50 per month—or $3,210 more per year—for the rest of your life. And because OAS is indexed to inflation, that gap grows over time as both amounts increase with the cost of living.

You Don’t Have to Wait Until Exactly 70

Many Canadians don’t realize you can start OAS at any point between 65 and 70. If you defer to 67, you’d receive 14.4% more. At 68, it’s 21.6% more. This flexibility lets you fine-tune your retirement income based on your specific situation—maybe you retire at 66 and want to start OAS at 68 when your RRSP withdrawals decrease.

Is the OAS Increase for Deferral Worth the Wait?

This is the million-dollar question (or more accurately, the hundred-thousand-dollar question over your retirement). The OAS increase for deferral sounds attractive on paper, but whether it makes sense depends on several personal factors.

When Deferring Makes Sense

Delaying OAS tends to work well if you:

• Have other income sources to cover expenses from 65-70 (pension, RRSP, TFSA, part-time work)
• Are in good health with longevity in your family
• Want to maximize guaranteed lifetime income
• Are concerned about outliving your savings
• Have a higher income that would trigger OAS clawback anyway

If you’re still working at 65 and earning a good salary, taking OAS immediately might push you into OAS clawback territory (the recovery tax kicks in at $95,323 of net income in 2026). In this case, deferring protects your benefit while your income is high.

When Taking OAS at 65 Is Smarter

On the flip side, you should probably take OAS at 65 if you:

• Need the income to cover basic living expenses
• Have health concerns that may reduce life expectancy
• Qualify for the Guaranteed Income Supplement (GIS)
• Have limited retirement savings
• Want to reduce RRSP/RRIF withdrawals to manage taxes

Understanding your complete retirement income picture is crucial. If you’re unsure whether your TFSA investments are performing well enough to bridge the gap, that’s an important factor to consider.

💡 Pro Tip: If you qualify for GIS, taking OAS at 65 is almost always the right call. Here’s why: a single senior could receive $743.05 (OAS) + $1,109.85 (GIS) = $1,852.90/month starting at 65. Deferring OAS for 5 years to get $1,010.55 instead would forfeit 60 months × $1,852.90 = $111,174 in combined benefits. The 36% OAS increase would need approximately 35 more years to recover that gap — mathematically impossible.

OAS at 65 vs 70: Complete Comparison

Let’s break down the key differences between taking OAS immediately versus waiting the full five years. This comparison assumes you’re eligible for the maximum benefit and uses 2026 figures.

As you can see, the break-even point falls somewhere around age 83-84. Live longer than that, and deferral pays off. But there’s more to consider than just the math—cash flow, investment returns on money you’d receive earlier, and other benefits all play a role.

How to Decide Whether to Delay OAS Benefits Canada

Making this decision requires looking at your complete financial picture. Here’s a step-by-step approach to help you decide.

Step 1: Calculate Your Retirement Income Without OAS

Add up all your other income sources from age 65-70:

• Workplace pension
• CPP (maximum $1,507.65/month at 65 in 2026)
• RRSP/RRIF withdrawals
• TFSA withdrawals
• Part-time work or business income
• Investment income

If these sources comfortably cover your expenses, deferral becomes more attractive. If you’d struggle without OAS, take it at 65.

Step 2: Assess Your Health and Family History

This isn’t pleasant to think about, but it’s financially important. If your parents and grandparents lived into their late 80s or 90s, the odds favor deferral. If there’s a history of serious illness in your family or you have existing health conditions, the guaranteed money at 65 may be wiser.

Statistics Canada data shows that a 65-year-old Canadian can expect to live another 20+ years on average. But averages don’t tell your personal story.

Step 3: Consider the Opportunity Cost

If you take OAS at 65, you’ll receive about $44,583 over five years. If you invested that money and earned returns, would you come out ahead versus the higher payments later?

At a 5% annual return, that $44,583 (invested gradually as received) might grow to roughly $50,000 by age 70. Meanwhile, the person who deferred starts receiving $267.50/month more. It would take about 16 years of those extra payments to make up for the invested early payments—meaning the break-even age shifts closer to 86 when you factor in investment returns.

Step 4: Factor in Taxes

OAS is taxable income. If you defer during your highest earning years and start collecting when your income drops, you may pay less tax overall. This is especially relevant if you’re doing an RRSP meltdown strategy in your 60s.

Speaking of taxes, make sure you understand which government benefits seniors often miss—there may be credits and deductions that affect your overall retirement tax picture.

💡 Pro Tip: TFSA withdrawals don’t count as income for the OAS clawback  (threshold: $95,323 in 2026). If you’re bridging the 65-70 gap with income, prioritize TFSA withdrawals to keep your taxable income below the clawback line during the deferral period. This protects both your eventual higher OAS AND avoids clawback in the first year of collection.

Critical Mistakes to Avoid with OAS Deferral to 70 Canada

I’ve seen Canadians make costly errors with their OAS decisions. Here are the biggest pitfalls to avoid.

Mistake #1: Forgetting About GIS

The Guaranteed Income Supplement is only available to OAS recipients. If you defer OAS, you cannot receive GIS during that time—even if your income would otherwise qualify. For low-income seniors, GIS can add over $1,000/month to your income. Giving that up for five years to get 36% more OAS is almost never worth it.

If your retirement income is modest (roughly under $22,488/year for singles in 2026), take OAS at 65 to access GIS immediately.

Mistake #2: Not Applying on Time

If you want to defer OAS, you still need to take action. Service Canada may send you an automatic enrollment letter around your 64th birthday. You must either let them know you want to defer or simply not complete the application. But don’t ignore it entirely—stay informed about your options.

If you do want OAS at 65, apply six months before your 65th birthday to avoid payment delays.

Mistake #3: Ignoring Your Spouse’s Situation

OAS decisions shouldn’t be made in isolation if you’re married or common-law. Consider:

• Your combined household income and tax brackets
• Age differences between you and your spouse
• What happens to household income if one partner dies
• Whether one spouse deferring while the other takes early makes sense

💡 Pro Tip: A common spousal strategy is for one partner to defer while the other takes OAS at 65. This creates income smoothing across the household — some guaranteed income at 65 while building a higher guaranteed stream for later. The higher-earning spouse typically benefits more from deferral since they face greater clawback risk if both incomes arrive simultaneously.

Mistake #4: Assuming Deferral Is Always Better

The 36% increase sounds amazing, but it’s only better if you live long enough to benefit. Financial media often promotes deferral as the “smart” choice, but it’s not one-size-fits-all. Your health, income needs, and other resources matter more than following general advice.

Key Takeaways

• Deferring OAS from 65 to 70 increases your monthly payment by 36%—from $743.05 to $1,010.55 in 2026 dollars
• The break-even age is approximately 83-84, meaning you need to live past that to financially benefit from deferral
• If you qualify for GIS, take OAS at 65—you cannot receive GIS while deferring OAS
• Consider your health, family history, and other income sources before deciding
• Only about 1% of Canadians defer OAS, but it can be a powerful strategy for the right situation
• You can start OAS at any point between 65 and 70—you don’t have to choose just those two ages

Frequently Asked Questions

How much more OAS do I get if I defer to 70?

You receive 36% more OAS if you defer from 65 to 70. In 2026, this means your maximum monthly payment increases from $743.05 to approximately $1,010.55 —an extra $267.50 per month or $3,210 per year for life. The increase is 0.6% for each month you delay, and this enhanced amount is also indexed to inflation, so the dollar gap grows over time.

Can I defer OAS and CPP at the same time for maximum retirement income?

Yes — and for the right person, deferring both to 70 can be powerful. If you defer CPP to 70 (+42%) AND OAS to 70 (+36%), you could receive:
– CPP: up to $2,141/month (at 70)
– OAS: up to $1,010.55/month (at 70)
– Combined: $3,151.55/month — entirely government-guaranteed and indexed to inflation.

The challenge: you need income for ages 65-70. A combination of RRSP meltdown (withdrawing RRSP before CPP/OAS starts), TFSA drawdowns, and part-time work is the typical
bridge strategy. This dual-deferral approach works best for those in good health with substantial savings and moderate income needs.

What happens to my GIS if I defer OAS?

You cannot receive the Guaranteed Income Supplement (GIS) while deferring OAS because GIS is only available to people currently receiving OAS. This is a critical consideration for low-income seniors. If you would qualify for GIS (income roughly under $22,500/year for singles), the combined value of OAS plus GIS at 65 almost always exceeds the value of a higher OAS payment later. For most GIS-eligible Canadians, deferring OAS is not recommended.

At what age do I break even if I delay OAS?

The break-even age is approximately 83-84 years old. By this age, the total cumulative payments from the higher deferred OAS catch up to what you would have received by starting at 65. If you live beyond 84, deferral pays off; if you pass away before then, you would have received more by taking OAS earlier. When factoring in potential investment returns on early payments, the break-even age may shift slightly higher, closer to 85-86.

Making the right choice about OAS deferral to 70 Canada could mean tens of thousands of dollars over your retirement. The key is matching your decision to your unique circumstances—your health, income needs, other benefits, and longevity expectations. Whether you take OAS at 65 or delay OAS benefits Canada until 70, the most important thing is making an informed choice. For more retirement planning strategies and Canadian financial guidance, explore the rest of Getwealthy’s resources on managing your money in today’s economic environment.