You can begin receiving Old Age Security (OAS) benefits the month after you turn 65, or you can defer your payments anytime up to age 70.

If you defer your OAS pension, the amount you would have received at 65 increases by 0.6% each month, which is a 7.2% increase after 12 months. When you defer to age 70, you benefit from a 36% increase.

Here are the most common reasons to start at age 65 or defer OAS benefits.

Starting at age 65

Requiring income. An individual may choose to receive benefits right away simply because they need the money to help cover their cost of living.

Available now. Whether they spend the money or invest it in mutual funds, many retirees start OAS benefits at 65 because they’re uncomfortable turning down funds that are available now.

Preserving assets. Some retirees start their OAS benefits at 65 so they can draw less income from their retirement savings. This leaves more mutual fund savings to grow for future retirement income or ultimately to leave to their loved ones.

Life expectancy. If someone has a medical condition that may affect their life expectancy, they may wish to begin OAS benefits at 65, as delaying the pension to receive a greater benefit amount only pays off at older ages.

Deferring to a later year

Earning income. If you’re still working at 65 or earning business or rental income and don’t need the OAS benefit, you might defer to a later year to receive a higher monthly amount.

Greater benefits overall. If you can support your retirement lifestyle during your 60s without OAS payments, deferring your OAS pension can potentially result in more total benefit payments over time. We can help you determine your approximate age when the total benefit amounts received by deferring will exceed the total amount received when starting at 65.

Managing the OAS clawback. If a retiree’s income at 65 would result in their OAS benefit being reduced or eliminated, they may have reason to defer their OAS benefit to a later year.