Understanding CPP and OAS: Your Path to Retirement Income

Planning for retirement can be complex, but understanding Canada's two main government pension programs—Canada Pension Plan (CPP) and Old Age Security (OAS)—is a great first step. These benefits provide important income support to help seniors maintain their standard of living.

 

Canada Pension Plan (CPP):

The CPP is a contributory program funded by payroll taxes from workers and employers. If you work in Canada and make contributions, you'll accumulate credits toward your future benefits. The amount you receive depends on how much and for how long you contributed during your working years. Benefits usually start at age 65, but you can choose to take it early at 60 (with permanently reduced benefits) or delay until 70 for increased payments. For every year that you delay receiving CPP after age 65, you are entitled to an 8.4% increase in benefits. As of 2025, the maximum monthly CPP benefit at age 65 is approximately $1,306, but most recipients receive less, based on their earnings history.

 

Old Age Security (OAS):

OAS is funded through general tax revenues and is available to all Canadian residents aged 65 and older who have lived in Canada for at least 10 years after turning 18. Unlike CPP, OAS isn't based on work contributions. The maximum monthly OAS payment in 2025 is about $615, but eligibility depends on your residence history and income level. Higher-income seniors may be required to repay part or all of their OAS.

 

Your Comazzetto Group advisor can help you plan for your retirement by incorporating these pension programs into your wealth plan. We can also show you if it would be advantageous – or not – to delay receiving your CPP benefits past 65. And if you have already retired and are receiving CPP and OAS, we are happy to do an annual income review with you to ensure that you aren’t subject to OAS claw back unnecessarily.