Don’t Take Old Age Security While You Are Working And Less Than 70 Years Old. Canada 150 Recommendation #2

If you delay taking Old Age Security you will get more money when you do take it.

The window is from when you are 65 to when you are 70. This means that the earliest that you can take OAS is when you turn 65 and the latest that you can take it is when you turn 70. For every month that you do not take the OAS you receive a percentage more when you do take it. This is a trade off. If you are not getting OAS then you are losing money each month that you could have received, but you will get more each month later. If you could let your financial advisor know when you are going to die, they will be better able to give you advice about when to start taking OAS (That is accounting humour).

The reason that I am suggesting that you wait if you are still employed is that OAS is repayable if your income exceeds certain limits. Assuming you are a high-income earner then any OAS you take will be repayable. Receiving OAS and then paying it back does not move you forward financially and it can be a surprise when you file your tax return and find out that the OAS is only yours temporarily.

Here is the recommendation — if you are between the ages of 65 and 70 and you are still employed consider deferring applying for OAS until you are no longer employed. You will get more OAS if you wait and if you’re getting the OAS while you are employed you could be paying it back (due to your income). Give this a little thought, talk to your advisors and make a decision.

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Painless Financial Training Group Inc. with Debi Peverill

Understand Financial Stuff, Painlessly