Only 36% of Canadians correctly understand that CPP payments increase the longer you wait to take them, and just 17% understand the same about OAS, according to a survey of 8,600 Canadians by Employment and Social Development Canada.
In this episode of Think Smart with TMFG, Gabriel Zitoli, financial advisor, joins Mike today to discuss the difference between CPP and OAS, two benefits people often assume are the same thing. CPP is contribution-based, built from what you and your employer paid in over your working life. OAS is based on residency alone, with full eligibility at 40 years of Canadian residency after age 18. One is your money. The other is a government benefit you don't pay into directly.
We also dig into what these benefits are actually worth. The maximum CPP payment at 65 is just above $1,500 a month for 2026, but the average recipient only gets $877, a gap most people don't expect. OAS tops out around $750 a month. Taking CPP early costs you 0.6% permanently for every month before 65, up to a 30% reduction if you start at 60. Delaying CPP past 65 adds 0.7% a month, and delaying OAS adds 0.6% a month up to age 70.
From there, we break down the OAS clawback, which kicks in above $95,323 in individual income for 2026 at a rate of 15 cents per dollar, why the RRIF meltdown strategy exists to get money out of registered accounts before mandatory withdrawals at 72 trigger that clawback, how income splitting between spouses can help you stay under the threshold, and why losing a spouse can quietly push the survivor into a higher tax bracket by eliminating one OAS payment and capping combined CPP at the individual maximum.
📌 If you're approaching CPP or OAS decisions, or want to understand what deferring could mean for your specific numbers, feel free to reach out. We'd be happy to help you build a plan around it:
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