Source: Ativa Interactive
Many Canadians wonder whether they can or should continue working past the age of 70 while collecting Canada Pension Plan (CPP) and Old Age Security (OAS) benefits. The short answer is yes, you can—but it comes with financial trade-offs. Let’s break down the advantages, drawbacks, and key considerations of delaying full retirement.
Sarah turned 65 in June 2024 and still works full-time, earning $96,000 annually. She receives a survivor benefit of $389 per month and has worked full-time for 20 years. She’s considering delaying CPP and OAS until age 70 but wonders if she can continue working past that while receiving these benefits. Her financial picture includes:
Many financial experts recommend delaying CPP and OAS until age 70 if possible. Here’s why:
Estimated Annual Benefits at 70:
Yes, but the impact depends on income level and tax implications. Here’s what to consider:
OAS is subject to the OAS recovery tax (clawback) if your income exceeds $90,997 (2024 threshold). For every dollar earned above this, OAS is reduced by 15 cents per dollar. If Sarah continues earning $96,000, she will lose a portion of OAS but not all of it.
The decision to work past 70 depends on personal circumstances, health, and financial goals. Here’s a quick checklist:
Do you enjoy your work? If yes, continuing may provide purpose and fulfillment.
Do you need additional savings? Delaying withdrawals from RRSPs and increasing CPP/OAS benefits could improve long-term financial security.
Are you prepared for potential health changes? Having a backup plan (e.g., disability insurance, downsizing options) is crucial.
For Sarah, delaying CPP and OAS until 70 makes financial sense, as it guarantees higher lifelong benefits. While working past 70 is an option, she should be mindful of tax implications and the OAS clawback. With strategic financial planning—such as paying down her mortgage, optimizing RRSP withdrawals, and using a TFSA—she can ensure a comfortable retirement, whether she chooses to continue working or not.
If you’re in a similar situation, consulting a financial planner can help tailor a strategy that fits your specific goals and ensures long-term security.