Should You Defer OAS? Waiting Past 65 Adds Up to 36%
What you will learn: How deferring Old Age Security past 65 affects your monthly payment, when deferral makes sense, and the one situation where you should almost always take OAS at 65.
Old Age Security (OAS) and the Canada Pension Plan (CPP) both allow deferral, but they work differently. CPP deferral adds 0.7% per month; OAS deferral adds 0.6% per month. More importantly, OAS is required to receive the Guaranteed Income Supplement (GIS) — so deferring OAS also defers GIS. If you qualify for GIS, this changes the deferral math entirely. See the GIS guide before making this decision.
Ruth, 64, from Sudbury, Ontario. Ruth retired early at 62 and was living on modest savings and a small workplace pension of $400/month. As her 65th birthday approached, she received an automatic letter from Service Canada asking her to apply for OAS.
Ruth's financial adviser suggested she consider deferring OAS to 70 for the 36% increase. "On paper the math looks good," the adviser said. "If you can afford to wait."
Ruth asked a volunteer at her local library's tax clinic about GIS. The volunteer looked up her income: $400/month pension + no CPP yet = approximately $4,800/year. She qualified for near-maximum GIS — nearly $1,000/month. Since GIS requires receiving OAS, deferring OAS would also defer $1,000/month in GIS for five years.
"The adviser was giving me generic advice," Ruth said. "Once we added GIS into the picture, taking OAS at 65 was clearly the right decision for my situation. The GIS alone made it obvious."
The OAS Deferral Numbers
Old Age Security can be started at any age from 65 to 70. For every month past 65 that you delay, your monthly payment increases by 0.6%.
| Start age | Effect on monthly OAS | Example (if $713 at 65) |
|---|---|---|
| Age 65 | Standard amount | $713/month |
| Age 67 | +14.4% (0.6% × 24 months) | $816/month |
| Age 70 | +36% (0.6% × 60 months) | $970/month |
OAS rates are adjusted quarterly for inflation. The $713 figure is approximate for 2026 — check your actual amount at mysca.service.canada.ca or by calling 1-800-277-9914.
Break-Even Analysis
If you defer OAS from 65 to 70 (gaining $257/month at 2026 rates), you forgo 5 years of $713/month payments: $713 × 60 = $42,780 given up. The extra amount gained per month is $257. Break-even: $42,780 ÷ $257 ≈ 166 months ≈ 13.8 years past age 70 = approximately age 84.
If you live past 84, deferring OAS was mathematically advantageous. The average Canadian woman who reaches 65 today can expect to live to approximately 87. The average man, approximately 84. Women have a stronger statistical case for deferral than men, on average.
The One Rule That Overrides Most Others
The Guaranteed Income Supplement requires you to be receiving OAS. Deferring OAS also defers GIS — and GIS can be worth over $12,000 per year. A 36% increase on OAS (roughly $3,000/year) does not come close to compensating for five years of lost GIS ($60,000+). If your annual income from all sources other than OAS is below approximately $22,000, apply for OAS immediately at 65 and add GIS to it. Do not defer. See the GIS guide.
When OAS Deferral Makes Sense
Four situations where deferral typically works well:
How to Defer OAS — What to Do (and Not Do)
Deferring OAS is simple: do not apply for it. Service Canada will send you a letter when you turn 65 asking if you want to start OAS. If you want to defer, simply do not apply at that time.
To defer OAS:
Service Canada automatically enrols some seniors in OAS and sends a letter confirming their start date — particularly those whose income tax records show they are clearly eligible. If you receive such a letter and want to defer, you must contact Service Canada to opt out of the automatic enrolment before the stated start date. Call 1-800-277-9914 promptly if you receive a confirmation letter and do not want OAS to start yet.
Most Canadian seniors should take OAS at 65. If you qualify for GIS, that settles it — take OAS immediately. If you are high-income and working, deferral may be worth running the numbers.
The most important step: check your GIS eligibility before deciding. A 10-minute call to Service Canada at 1-800-277-9914 will tell you whether GIS applies — and that one answer usually makes the deferral decision clear.
Quick Answers
If you have not applied for OAS and are past 65, you are already deferring — whether intentionally or not. Your OAS rate will be 0.6% higher for each month past 65 that you have waited. After 6 months, your rate is already 3.6% higher than the standard. You can apply at any time up to 70. If you want GIS, apply for OAS now — GIS cannot start until OAS does.
If your net income exceeds approximately $90,997 (2026 threshold), the government claws back 15 cents of OAS for every dollar above that threshold. OAS is fully clawed back when income reaches approximately $148,000. If you expect to earn above the clawback threshold in early retirement (from RRIF withdrawals, rental income, etc.) but less later, deferring OAS until income is lower can help reduce clawback. GIS recipients are never affected by the clawback — their income is far below the threshold.
OAS and CPP deferral are independent decisions. Each spouse's decision should be based on their individual health, income, GIS eligibility, and working status. A common strategy for couples where one spouse has a higher income is for the higher-earner to defer both CPP and OAS (reducing income-splitting needs while working) while the lower-earner takes both at 65. There is no single right answer — these decisions work together as part of an overall retirement income plan.