Should I delay OAS payments or spend time with my grandkids?

By the Editorial Team · Saturday, July 4, 2026

A 65-year-old Canadian contemplating when to start Old Age Security (OAS) payments must weigh the financial benefits of delaying up to age 70—which increases monthly payments by 36% and offers inflation protection—against personal factors like health, income level, and family time. This decision is crucial as it affects eligibility for the Guaranteed Income Supplement and overall retirement income security, with delaying OAS often benefiting those with steady earnings, while immediate claims may suit those with limited life expectancy or lower income.

For Canadians approaching retirement age, the decision of when to begin receiving Old Age Security (OAS) payments involves both financial and personal considerations. A 65-year-old single individual with an annual income in the $60,000 range recently sought advice on whether to start collecting OAS immediately or delay to increase future payments, weighing the impact on both finances and family time.

Under current regulations, OAS payments are designed to incentivize delayed claims. Recipients who wait beyond age 65 see their monthly benefits increase by 0.6 percent per month, equivalent to 7.2 percent annually. Starting payments at 65 yields a maximum monthly amount of $751.97, while deferring until age 70 raises this figure to $1,022.68—a 36 percent increase. These benefits are also indexed to inflation, helping protect retirees from rising living costs over time.

Financial advisors stress that delaying OAS can effectively create a secure, inflation-adjusted income stream akin to a defined benefit pension plan, which has become less common in recent decades. For individuals still working and earning a steady salary, postponing OAS can make financial sense, particularly if their income approaches the 2026 clawback threshold of $95,323. Above this threshold, OAS payments begin to be recovered by the government.

Conversely, if a retiree faces serious health concerns or a limited life expectancy, experts generally recommend taking OAS immediately. The breakeven point when a delayed claimant's total benefits surpass those who start at 65 typically occurs in the early to mid-80s, assuming conservative investment returns elsewhere.

Another factor influencing the decision is eligibility for the Guaranteed Income Supplement (GIS), a benefit available to low-income seniors. Single individuals with annual income below approximately $22,800 qualify for GIS of up to $1,123.17 monthly. Since GIS eligibility is automatically triggered by receiving OAS at 65, delaying OAS can temporarily forfeit this supplement. Additionally, withdrawals from registered retirement savings plans (RRSPs) or registered retirement income funds (RRIFs) count as income and can reduce GIS benefits. Strategic withdrawals and use of tax-free savings accounts (TFSAs) may mitigate negative interactions between income and GIS.

Beyond the financial calculations, advisers emphasize the importance of personal priorities. The opportunity cost of delaying OAS to spend fewer years with grandchildren may outweigh the purely monetary benefits for some individuals. Mortality expectations can be difficult to assess accurately: studies have shown older adults tend to underestimate life expectancy in their 50s and 60s but become overly optimistic in advanced age.

Ultimately, the decision depends on individual health, income sources, family considerations, and attitudes toward longevity risk. While delaying OAS can enhance lifetime income for many, retirees must also weigh the value of immediate support and quality of life in early retirement years.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.