When can I get it?
You can take OAS as soon as you turn 65.
When should I take it?
The OAS program allows you to voluntarily defer up to 5 years. You must go to your Service Canada account to make this election.
Deferral comes with the benefit of higher monthly payments by up to 36%. The 2024 monthly max payment is $713.34 for those between 65 and 74 (those 75 plus get slightly more).
A 36% deferral bonus on the base OAS would bring you to $970.14 monthly. If you delay to age 70, you would have missed collecting $42,800.40 in OAS payments. At the higher monthly amount at 70, it would take 14 years (age 84) to make up for those lost payments.
If you feel like your odds of living past 84 are strong and you do not need the extra cash flow between 65 and 70, then delaying could make sense for you.
How can I keep it?
OAS has a claw back condition. When you exceed a certain level of income, fifteen cents of every dollar of OAS collected is taxed away.
For 2024, the claw back income threshold is $90,997. A full claw back of OAS would occur at an income of $148,064.
These numbers are for individuals, so couples are often easily able to navigate staying under this limit with pension splitting tax rules. For high income earners and single people, we need to get more creative.
RRIFs and LIFs (if minimum is being taken), OAS, CPP and defined benefit pensions cannot be altered to lower income. Our options consist of non-registered investment accounts, real estate, cash flow from corporations and any other assets held outside of registered accounts.
To keep the maximum OAS, we need to see where we can create more tax efficient income and a detailed cash flow projection is our best tool in creating a strategy. We never want to impede lifestyle just to get OAS, but if we can make subtle changes and keep more OAS, it is a win.