Planning for retirement involves understanding how much you can expect to receive from various sources of income. In Canada, the Canada Pension Plan (CPP) and Old Age Security (OAS) are two major sources of retirement income. This article will explain how much you can receive from CPP and OAS combined and how to maximize your benefits.
CPP and OAS Explained
The Canada Pension Plan (CPP) and Old Age Security (OAS) are important for many Canadians. They provide financial support during retirement and are vital parts of retirement planning. The amount you receive from CPP and OAS can significantly affect your retirement savings and how much you need to save before retiring.
How Much Will You Get as CPP and OAS Combined?
Here’s a detailed look at the maximum benefits you can receive from CPP and OAS:
| Pension Type | Maximum Monthly Amount | Details |
|---|---|---|
| Canada Pension Plan (CPP) | $1,306.57 | Average new beneficiaries get about $772.71. |
| Post-Retirement Benefit | $40.25 | Available if you continue working and contributing to CPP after retirement. |
| Combined Survivor’s and Retirement Pension (CPP) | $1,313.13 | Maximum amount for those receiving both survivor’s and retirement pensions. |
| Combined Disability and Survivor’s Pension (CPP) | $1,542.77 | Maximum amount for those receiving both disability and survivor’s pensions. |
| Old Age Security (OAS) (65-74 years) | $707.68 | Maximum monthly benefit if you are between 65 and 74 years old. |
| Old Age Security (OAS) (75+ years) | $778.45 | Maximum monthly benefit if you are 75 years old or older. |
How to Maximize Your CPP and OAS Benefits
To receive the full benefits from CPP and OAS, consider these tips:
- Start at the Right Age: You can start receiving OAS as early as 65, but delaying it can increase your monthly payment. There is no benefit to delaying after age 70, so it’s best to apply for OAS a few months before you turn 70.
- Continue Contributing: If you keep working and contributing to CPP after age 65, you can receive additional post-retirement benefits. These contributions can also help increase your total pension amount.
- Check Your My Service Canada Account: Use this account to monitor your CPP Pension details and ensure you are on track to receive your maximum benefits.
- Understand Income Thresholds: If your income exceeds a certain amount, you may have to repay some of your OAS benefits. For example, if your income exceeds $81,761 in 2022, you will need to repay the amount above this threshold.
- Consider Delays Carefully: Delaying your pension means delaying other benefits, such as the GIS. Your spouse may also miss out on GIS if you delay starting OAS.
Conclusion
Understanding how CPP and OAS work together is crucial for effective retirement planning. By knowing the maximum benefits and how to maximize them, you can better plan your retirement savings. Remember to consider the timing of your pension starts, continue contributing where possible, and keep track of income thresholds to ensure you receive the most from your CPP and OAS.
FAQ’s
What is the maximum amount I can receive from CPP?
The maximum monthly amount for CPP is $1,306.57. On average, new beneficiaries receive about $772.71.
What is the maximum monthly benefit for OAS?
For those aged 65 to 74, the maximum OAS benefit is $707.68. If you are 75 or older, it increases to $778.45.
Can I receive CPP and OAS benefits at the same time?
Yes, you can receive both CPP and OAS benefits simultaneously. The total amount you receive will depend on various factors such as your contributions and the age at which you start receiving the pensions.
What is the Post-Retirement Benefit?
The Post-Retirement Benefit is an additional amount you can receive if you continue to work and contribute to CPP after starting your pension. In 2023, it is $40.25 per month.