A big part of Canada’s retirement income scheme is Old Age Security (OAS). This program’s main goal is to help adults get the money they need to make sure they have a steady source of income when they retire.
OAS gives qualified seniors monthly payments, usually beginning at age 65, to help them pay for their living costs in retirement. The amount of these funds is changed often to keep up with the cost of living.
You can choose to start getting OAS benefits at age 65, or you can choose to put them off. If you defer, you will not get these funds until a later age, up to 70. This can make a big difference in how much OAS you get each month. But choosing to delay needs a lot of thought.
Old Age Pension Eligibility Criteria
- People who want to get OAS must have lived in Canada for at least 10 years after turning 18. This requirement makes sure that the recipients have a link to Canada.
- For the biggest award, you have to have lived in Canada for 40 years after you turned 18. This longer time frame shows a stronger connection to the social and economic system in Canada.
Payment Structure of Old Age Security (OAS) Pension
Non-employment Based
The OAS pension is different from many other retirement income plans because you don’t need to have worked before to get it. This one-size-fits-all method is meant to make sure that all seniors who meet the residency requirements get some money when they retire.
This kind of openness is important for helping people who don’t have many or any chances to work, like housewives, carers, and people with disabilities.
The most you can get each month from OAS is $685.50. This is the most a senior can get each month from the OAS program by itself.
The OAS payment isn’t set in stone; it changes every so often. These changes make up for changes in inflation, which measures the general cost of living.
Also See:- Canada Carbon Rebate (CCR) Payment Released on April 15
Deferring Old Age Security (OAS) Pension
If someone chooses to delay their OAS income, the amount they get goes up by 0.6% for every month that the delay lasts. This raise adds up and gets bigger over the time of the deferral. For instance, putting off the salary for a year (12 months) would lead to a 7.2% rise in total pay (0.6% times 12).
You can put off getting your OAS pension until you are 70 years old. People must start getting their pensions after this age.
If someone waits to get their OAS income until they turn 70, it can go up by a huge amount. If they wait 5 years (60 months) to retire, they will get a 36% bigger pension than if they had retired at age 65 (0.6% x 60 months).
The most a person could get each month at age 65 was $685.50. If they waited until age 70, their monthly income would go up by 36%.
Reasons to Defer Old Age Security (OAS) Pension
Putting off OAS can be a good idea for people who are still working at age 65 and making a good living. This group of people can get more money by postponing their OAS.
Putting off OAS can be a good way to lower lifetime risk, which is the chance of running out of money. Planning for a longer retirement is becoming more important as medical advances and longer life rates make it possible.
Depending on OAS, which has grown a lot through deferral, can help people better handle their money.