Canada Pension Plan and Old Age Security Pension: What Are They; How Do They Work ?

by | Jun 16, 2019 | Blog

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Canada Pension Plan: What Is It?

CPP is a Pension plan that you pay into. Like most pension plans, your CPP benefits are based upon the amount you have contributed over the years.

How Does It Work?

You can collect CPP as early as age 60.

You must contribute to CPP until age 65 if you are still working.


You can choose to contribute to CPP until age 70 if you are still working.

Old Age Security Plan: What Is It?

OAS is a pension plan that you do not pay into. Unlike most pension plans, your OAS benefits are not based upon contributions. OAS is a fixed amount and it is the same for anyone who has lived in Canada for at least 10 years after the age of 18.

How Does It Work?

You can collect OAS at age 65.

For each month you delay collecting OAS, your monthly benefit goes up by 0.6 % to a maximum of 37%.

When planning for the future, there are many discussions that evolve out of these rules. Consult your CPA to find out how they affect you and how you might use these rules to your advantage.
One Robust Rule: If you continue to work past age 65 and earn over $123,000, then wait until the earlier of the year you reduce your income and the month you reach age 70 before applying for OAS. If you make between $75,910 and $123,000 consult your CPA before applying for OAS.

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