Last summer, Old Age Security (OAS) benefits permanently increased for the first time in almost 50 years. The payment increase is 10% and applies to seniors aged 75 and older.
This increase gets a further boost when seniors delay starting their OAS benefits. Monthly payments increase by 0.6% for each month you delay payments beyond the traditional age 65 start date. That’s a 7.2% increase for a one-year delay and a 36% increase for the maximum five-year delay at age 70.
REASONS TO DELAY OAS PAYMENTS
If you work beyond age 65, it often makes sense to delay OAS payments since you likely don’t need the pension income.If you have retired by 65, the main reason to delay OAS payments is simply to gain additional financial security at older ages. You’ll receive a higher monthly benefit that’s indexed to inflation and guaranteed for life.
WHY START AT AGE 65?
Anyone who needs OAS benefits at age 65 to help support their retirement has an easy decision to begin when eligible.
Even if the income isn’t needed, there are several reasons to start at 65. It means drawing down less from retirement savings, which may leave more assets as an inheritance. Beginning payments at 65 ensures money isn’t left on the table if a retiree doesn’t live long enough to benefit from increased payments at older ages. In addition, retirees who expect their mandatory Registered Retirement Income Fund (RRIF) withdrawals to result in a clawback of OAS benefits at age 71 may want to start receiving OAS payments at 65.
This material was prepared for and published on behalf of your financial advisor and is intended only for clients resident in the jurisdiction(s) where their representative is registered.
This material is provided solely for informational and educational purposes and is not to be construed as an offer or solicitation for the sale or purchase of any securities or as providing
individual investment, tax or legal advice. Consult your professional advisor(s) prior to acting on the basis of this material. Insurance products are available through advisors registered with
applicable insurance regulators. Individual equities are available only through representatives of Assante Capital Management Ltd. In considering any particular investment, please remember
that past performance is no guarantee of future performance. Although this material has been compiled from sources believed to be reliable, we cannot guarantee its accuracy or completeness.
All opinions expressed and data provided herein are subject to change without notice. Neither CI Assante Wealth Management or its dealer subsidiaries Assante Capital Management Ltd. and
Assante Financial Management Ltd., nor their affiliates or their respective officers, directors, employees or advisors are responsible in any way for any damages or losses of any kind whatsoever
in respect of the use of this material. CI Assante Wealth Management is a registered business name of Assante Wealth Management (Canada) Ltd. Assante Capital Management Ltd. is a member of
the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Assante Financial Management Ltd. is a member of the Mutual Fund Dealers Association
of Canada and the MFDA Investor Protection Corporation (excluding Quebec). © 2022 CI Assante Wealth Management. All rights reserved.