Many Canadians approaching retirement wonder how much income they can receive from the Canada Pension Plan (CPP) and Old Age Security (OAS), and whether it makes sense to start benefits while still working.
This article explains how CPP and OAS work together at ages 60, 65, and 70 — and what the tax implications look like if you’re earning under $100,000 or above that level.
Maximum CPP and OAS Payments (2026 Estimates)
Government benefits depend on your contribution history, but the approximate maximum monthly amounts are:
| Benefit | Age 65 Monthly Maximum |
| CPP | ~$1,430 |
| OAS | ~$720 |
Combined at 65: about $2,150/month
Annual: about $25,800
Most Canadians receive less than the maximum, but these numbers help illustrate the tax impact.
Starting CPP at Age 60
If you start CPP early, your payment is permanently reduced by up to 36%.
Example:
- CPP at 65: $1,000/month
- CPP at 60: ~$640/month
- OAS: Not available yet
If You’re Still Working
Income example:
- Salary: $80,000
- CPP: ~$7,700/year
Total income: ~$87,700
Tax impact:
- CPP is fully taxable
- You remain in a middle tax bracket
- No OAS concerns yet
If your salary is over $100,000, CPP simply adds to taxable income and increases your marginal tax rate.
Important note
If you are under 65 and working while receiving CPP, you must continue contributing. These extra contributions increase your benefit through the Post-Retirement Benefit (PRB).
Starting CPP and OAS at Age 65
At 65, you can receive both benefits.
Example maximum combined income:
- CPP: ~$17,000/year
- OAS: ~$8,600/year
- Total government income: ~$25,600
If You’re Still Working Under $100,000
Example:
- Salary: $70,000
- CPP + OAS: $25,600
Total income: ~$95,600
Tax impact:
- Both benefits are fully taxable
- You remain in a moderate tax bracket
- No OAS clawback risk
If Your Salary Is Above $100,000
Example:
- Salary: $110,000
- Benefits: $25,600
Total income: ~$135,600
At this level:
- You move into higher marginal tax brackets
- OAS clawback begins once net income exceeds the threshold (about $90,000+)
Clawback rate:
- 15% of income above the threshold
At higher incomes, some or all of your OAS may be reduced.
Delaying CPP and OAS Until Age 70
Delaying increases your benefits:
- CPP increases by up to 42%
- OAS increases by 36%
Estimated maximum at 70:
| Benefit | Monthly |
| CPP | ~$2,000 |
| OAS | ~$980 |
Combined annual income: ~$35,700
If You’re Still Working Under $100,000
Example:
- Salary: $80,000
- Benefits: $35,700
Total income: ~$115,700
Tax impact:
- Higher marginal tax rate
- Possible partial OAS clawback
If Salary Is Above $100,000
Example:
- Salary: $120,000
- Benefits: $35,700
Total income: ~$155,700
At this level:
- Significant OAS clawback likely
- In some cases, OAS may be fully eliminated
When It May Make Sense to Delay Benefits
Delaying CPP or OAS is often beneficial if:
- You plan to keep working at a high income
- You want to avoid OAS clawback
- You expect a long retirement
- You want higher guaranteed income later
Many higher-income Canadians delay benefits specifically to reduce taxes during their peak earning years.
Key Tax Takeaways
- CPP and OAS are fully taxable income
- Starting benefits while working increases your tax bill
- OAS clawback begins once income exceeds the threshold (roughly $90,000+)
- Higher earners may lose some or all OAS
- Delaying benefits can reduce taxes and increase future income
Example Comparison
| Age Started | Working Income | Tax Impact |
| 60 | $80K | Moderate tax increase |
| 65 | $95K total | No clawback |
| 65 | $135K total | Partial OAS clawback |
| 70 | $115K+ total | Higher tax, possible clawback |
How This Fits Into Your Retirement Plan
The best time to start CPP and OAS depends on:
- Your current income
- Expected retirement date
- RRSP/RRIF withdrawal plans
- OAS clawback risk
- Life expectancy
For many Canadians still earning strong incomes, delaying benefits can improve long-term after-tax retirement income.
Next Step
If you’re unsure when to start CPP or OAS, it helps to see how the timing affects your taxes and total retirement income.
Speaking with a licensed Canadian retirement professional can help you build a strategy based on your full financial picture.
Disclaimer
This article is for educational purposes only and does not provide financial advice. Please consult a qualified professional for personalized guidance.