Old Age Security (OAS) Deferral Explained
Old Age Security (OAS) does not have to begin when you turn 65. Eligible Canadians have the option to defer their OAS pension and start receiving payments at a later age, which may result in a higher monthly benefit.
Choosing whether to defer your Old Age Security pension is an important retirement planning decision. Understanding how deferral works, who can benefit from it and when it may not be the best option can help you make an informed choice.
What Does Deferring Old Age Security Mean?
Deferring Old Age Security means choosing not to begin receiving your pension immediately when you first become eligible. Instead, you delay the start of your benefits in exchange for a permanently higher monthly payment once your pension begins.
The decision to defer is entirely optional and depends on your financial situation, retirement plans and expected sources of income.
| Option | Result |
|---|---|
| Start OAS at age 65 | Receive the standard monthly pension. |
| Delay OAS | Receive a higher monthly pension later. |
Who Can Defer OAS?
Most Canadians who qualify for Old Age Security may choose to delay the start of their pension. Deferral is available whether you are automatically enrolled or submit an application yourself, provided you have not already started receiving payments.
If you are considering delaying your pension, it is important to understand how the decision may affect your retirement income and eligibility for other government benefits.
| Requirement | Generally Required? |
|---|---|
| Eligible for Old Age Security | Yes |
| Not already receiving OAS | Yes |
| Decision made before payments begin | Yes |
Why Do Some Canadians Delay OAS?
Many retirees continue working beyond age 65 or have sufficient retirement income from other sources. In these situations, delaying Old Age Security may provide a larger guaranteed monthly pension later in retirement.
Others prefer to begin receiving payments immediately because they need the additional monthly income or expect to benefit more from receiving payments sooner.
Advantages of Deferring OAS
Delaying your Old Age Security pension may provide several long-term financial advantages depending on your retirement plans.
| Potential Advantage | Description |
|---|---|
| Higher monthly pension | Your future OAS payments will be permanently higher. |
| Additional retirement income later | May provide greater financial security at older ages. |
| Flexible retirement planning | Allows you to coordinate OAS with other income sources. |
Possible Disadvantages of Deferring OAS
Although delaying OAS increases your monthly payment, it is not the best decision for everyone. Waiting means giving up several months or years of pension payments that you could otherwise receive immediately.
| Possible Disadvantage | Description |
|---|---|
| Delayed income | You receive no OAS payments during the deferral period. |
| Shorter payment period | You begin receiving benefits later in life. |
| Personal financial considerations | Immediate income may better suit some retirees. |
How Much Does Deferring OAS Increase Your Pension?
The Government of Canada permanently increases your monthly Old Age Security pension for every month you choose to delay receiving it after becoming eligible. The longer you defer, the larger your future monthly payment will be.
Once your pension begins, the increase remains part of your monthly OAS benefit for as long as you continue receiving payments.
| When You Start OAS | Monthly Pension |
|---|---|
| At age 65 | Standard monthly benefit. |
| After a period of deferral | Permanently higher monthly benefit. |
| Maximum deferral period | Highest available monthly increase. |
Is Deferring OAS Right for You?
Whether delaying your Old Age Security pension makes sense depends on your overall retirement plan. There is no universal answer because every person’s financial situation is different.
Factors such as your health, expected retirement income, employment plans and cash flow needs should all be considered before deciding when to begin receiving benefits.
| Situation | Deferral May Be Worth Considering? |
|---|---|
| Continuing to work after age 65 | Possibly |
| Comfortable retirement income | Possibly |
| Need immediate monthly income | Possibly not |
| Limited retirement savings | Depends on your circumstances |
Can You Change Your Mind?
If you have not yet started receiving Old Age Security payments, you may still decide when you would like your pension to begin within the available rules established by Service Canada.
Once your pension has started, changing your decision may be subject to specific government rules and time limits. Reviewing the official guidance before making your choice is recommended.
| Situation | Possible? |
|---|---|
| Choose a later start date before payments begin | Yes |
| Modify your decision after payments start | Subject to Government of Canada rules. |
How Deferring OAS May Affect Other Benefits
Delaying your Old Age Security pension may also affect your eligibility for certain income-tested government benefits. Because every situation is different, it is important to consider your overall retirement income before deciding to defer.
Some retirees may also wish to review how delaying OAS could affect their future eligibility for programs such as the Guaranteed Income Supplement (GIS).
Common Mistakes When Deciding to Defer OAS
Choosing when to begin receiving Old Age Security is an important financial decision. Taking time to understand both the advantages and disadvantages can help you avoid common mistakes.
| Common Mistake | Better Approach |
|---|---|
| Focusing only on the higher monthly payment | Consider your total lifetime retirement income. |
| Ignoring other retirement benefits | Review your complete retirement plan. |
| Waiting without understanding the rules | Read the official Government guidance first. |
| Making the decision too late | Plan your retirement income well before age 65. |
How to Defer Your Old Age Security Pension
If you decide that delaying your Old Age Security pension is the right choice, you should inform Service Canada before your payments begin. Depending on your circumstances, you may be able to indicate your preferred pension start date when applying or by responding to your automatic enrolment notice.
If you are automatically enrolled and wish to delay your pension, it is important to notify Service Canada before payments start to ensure your request is processed correctly.
| Situation | What You Should Do |
|---|---|
| Applying for OAS | Select your preferred pension start date. |
| Automatically enrolled | Notify Service Canada before payments begin if you wish to defer. |
| Unsure of your enrolment status | Check My Service Canada Account. |
Should You Speak to a Financial Advisor?
Because the decision to defer Old Age Security can affect your long-term retirement income, some Canadians choose to discuss their options with a qualified financial advisor before making a final decision.
An advisor can help evaluate how OAS fits alongside other retirement income sources such as the Canada Pension Plan (CPP), workplace pensions, personal savings and investment income.
Questions to Ask Before Deferring OAS
Before deciding to delay your pension, consider how the decision fits with your financial needs, retirement goals and expected future income.
| Question | Why It Matters |
|---|---|
| Do I need the income immediately? | Helps determine whether delaying is practical. |
| Will I continue working? | Employment income may influence your decision. |
| Do I have other retirement income? | Additional income may make deferral more attractive. |
| Could GIS or other benefits be affected? | Income-tested benefits should also be considered. |
Making the Right Decision for Your Retirement
There is no universal answer to whether you should defer Old Age Security. Some retirees benefit from receiving higher monthly payments later in life, while others prefer to begin collecting their pension as soon as they become eligible.
Reviewing your retirement income, expected expenses and long-term financial goals can help you choose the option that best matches your personal circumstances.
| If Your Priority Is… | You May Prefer… |
|---|---|
| Receiving income as soon as possible | Starting OAS at age 65. |
| Increasing future monthly payments | Deferring OAS. |
| Balancing multiple retirement income sources | Reviewing your retirement strategy before deciding. |
Related Northbly Guides
- How to Apply for Old Age Security (OAS)
- Old Age Security (OAS) Eligibility Guide
- Old Age Security (OAS) Payment Amounts
- Old Age Security (OAS) Payment Dates 2026
- Old Age Security (OAS) Clawback Explained
- Guaranteed Income Supplement (GIS) Guide
Frequently Asked Questions
What does it mean to defer Old Age Security (OAS)?
Deferring Old Age Security means choosing to delay the start of your pension after you become eligible. In return, your monthly OAS payment will be permanently higher once you begin receiving benefits.
Do I have to start OAS at age 65?
No. Eligible Canadians can choose to begin receiving Old Age Security at age 65 or delay their pension to receive a larger monthly payment later.
Will I receive more money if I defer OAS?
Yes. Delaying your Old Age Security pension increases your future monthly benefit. The increase is permanent and continues for as long as you receive OAS payments.
Who should consider delaying OAS?
Deferring OAS may be worth considering if you continue working after age 65, have sufficient retirement income from other sources or want to maximize your future monthly pension.
Is deferring OAS the right choice for everyone?
No. Some Canadians benefit more from receiving their pension as soon as they become eligible, particularly if they need the additional monthly income to support their retirement.
Can I change my mind after deciding to defer?
If your pension has not yet started, you may still be able to change your planned start date in accordance with Service Canada rules. Once payments begin, different rules and time limits may apply.
Does delaying OAS affect the Guaranteed Income Supplement (GIS)?
It can. Because GIS eligibility depends on your overall circumstances and retirement income, delaying Old Age Security may affect when you become eligible for certain income-tested benefits.
Can I continue working while delaying OAS?
Yes. Many Canadians continue working after age 65 and choose to delay Old Age Security while relying on employment income or other retirement savings.
How do I request an OAS deferral?
You can generally choose your preferred pension start date when applying for Old Age Security or notify Service Canada before your automatically scheduled payments begin.
Should I speak with a financial advisor before deferring?
Many Canadians find it helpful to discuss the decision with a qualified financial advisor because the timing of OAS can affect their overall retirement income strategy.
Can I defer OAS if I am automatically enrolled?
Yes. If you are automatically enrolled but prefer to delay receiving your pension, you should notify Service Canada before your payments begin.
Where can I find official information about OAS deferral?
The Government of Canada publishes official information explaining Old Age Security deferral, eligibility rules and retirement planning considerations on the Service Canada website.
Official Government Resources
For the latest information about delaying your Old Age Security pension, pension increases and eligibility requirements, consult the official Government of Canada resources below.
- Old Age Security (OAS)
- Choosing When to Start Your OAS Pension
- Apply for Old Age Security
- My Service Canada Account
Official Government Information
Old Age Security deferral is administered by Service Canada under the Old Age Security Act. The rules governing pension deferral, eligibility, payment increases and application procedures are established by the Government of Canada and may change over time. Always consult official Government of Canada resources before making decisions about your retirement benefits.
Disclaimer
Northbly publishes independent informational content to help readers better understand Canadian government benefits and retirement programs. Although every effort is made to keep this guide accurate and up to date, pension rules, benefit calculations and government policies may change.
This article is provided for general informational purposes only and should not be considered legal, financial, retirement planning or tax advice. For guidance relating to your personal circumstances, contact Service Canada or consult a qualified financial or retirement planning professional.
