Getting Started: CPP & OAS Estimate

The CPP & OAS estimate is based on the information shared in the Tax & Benefits section in Discovery and also your future employment income in Future Cash Flow.

OAS Estimate

Old Age Security, or OAS, is based on residency in Canada. With at least 40-years living in Canada between age 18 and 65 you will receive the maximum OAS benefit. The benefit is then reduced for those with less than 40-years in Canada. An individual with 30-years in Canada would receive 30/40 credits and therefore get 75% of the maximum OAS benefit. To receive OAS there must be a minimum of 10-years.

OAS can start as early as age 65 but it is also possible to delay OAS. By delaying OAS the benefit will increase. There are pros and cons to delaying OAS and delaying OAS can make sense in specific circumstances, we recommend booking a call with an advice-only financial planner if you’re unsure about whether or not you should delay OAS benefits.

CPP Estimate

Canada Pension Plan, or CPP, is based on contributions to CPP. Every year you contribute to CPP you earn a full credit or a partial credit. Your CPP Pensionable Earnings, which you shared in the Tax & Benefits section in Discovery, and also your future employment income assumptions in Future Cash Flow, will help us estimate your past and future contributions to CPP.

To receive the full CPP benefit requires a certain number of credits depending on when you choose to start your CPP benefits. 

CPP can start as early as age 60 but it is also possible to delay CPP as late as age 70. By delaying CPP the benefit will increase. There are pros and cons to delaying CPP and delaying CPP can make sense in certain circumstances, we recommend booking a call with an advice-only financial planner if you’re unsure about whether or not you should delay CPP benefits.

Delaying CPP and OAS can provide an increased benefit but there are pros and cons to consider. The positive aspect of delaying CPP and OAS is that the increased annual benefit provides some protection against longevity as well as inflation because benefits are increased with inflation annually. The negative of delaying CPP and OAS is that it requires significant investment assets to be spent during the waiting period in your 60’s and the breakeven point for delaying CPP and OAS may not occur until you reach your early 80’s to early 90’s.

CPP benefits also cause “clawbacks” on low-income retirement benefits like GIS. If you expect to receive GIS benefits in the future, then deciding when to start CPP and OAS is a very important consideration. Again, if you’re unsure about when to start CPP or OAS we recommend booking a call with an advice-only financial planner.

These are estimates only. These estimated do not include the Child Rearing Drop Out. We assume future income is in line with estimates.

Choosing CPP & OAS Start Age

Make sure to choose the age you’d like to start CPP and OAS benefits within your plan. After you choose your start age this income will automatically be included in your Future Cash Flow when you recalculate the Future Cash Flow section.

Start Age can also be set using the AI strategies in the Projections Section of the Planning Phase.

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