An OAS and CPP Primer

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An OAS and CPP Primer, understanding sources of government retirement income

An OAS and CPP Primer

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Understanding Government Sources of Retirement Income in Canada

The majority of Canadians spend their lives drawing income from one main source or employer during employment years. Retirement income, however, requires careful planning since we can no longer depend on one main source for our income.

Old Age Security (OAS) and Canada Pension Plan (CPP) are the two sources of retirement benefits that come from the Government of Canada. Both are significant components of your retirement income plan.

Old Age Security

  • Your monthly OAS benefit payment is based on your individual income (not household income), and you do not pay into it directly
  • You may still collect this benefit even if you’ve never worked or are still working
  • Monthly benefit payments are available to seniors age 65 and up
  • You can apply for OAS as early as 11 months before you want your benefits to commence
  • If you don’t meet the full criteria, you may still be eligible to receive a partial pension
  • You may defer receiving OAS benefits up to 5 years after you become eligible to get a higher monthly amount
  • There are no survivor benefits
  • Eligible seniors are automatically enrolled and do not need to apply for this benefit
  • This benefit is fully taxable
  • Visit https://www.canada.ca/en/services/benefits/publicpensions/cpp/old-age-security/payments.html for more information on OAS Payment Amounts

Canada Pension Plan

  • Your monthly CPP benefit payment depends on the level of contributions made by you and your employer during your employment
  • You may choose to receive your full benefit at age 65
  • You may receive your benefit as early as age 60 with a deduction
  • You may postpone your benefit payments until the age of 70 to receive an increase in your monthly payment
  • Upon death, a lump sum is paid to your estate, up to a maximum of $2500
  • You must apply for this benefit, it does not commence automatically
  • This benefit is taxable income
  • Visit https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html for more information on Canada Pension Payment Amounts

Old Age Security and Canada Pension Plan are just two of several possible retirement income sources. Contact Brooks Financial today to get started on creating a retirement income plan that will minimize your tax payments and maximize your income during your retirement.


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