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How to figure out the best age to start getting CPP and OAS

When should you start collecting CPP and OAS payments?

There's been some talk lately about the cost of the Liberal government's decision to shelve plans to gradually increase the age of eligibility for Old Age Security to 67 from the current age of 65. The previous Conservative government announced that change in the 2012 budget, along with another measure that is still in effect. You can delay receiving OAS benefits for up to five years past age 65 and receive a higher monthly payment.

The Canada Pension Plan offers similar flexibility – you can start collecting CPP as early as age 60 at a reduced amount, wait until 65 and receive your regular amount or wait as many as five more years to receive higher payments. What's the best age to start collecting both CPP and OAS? Obviously, there's no definitive answer. But here's a calculator that will let you compare various outcomes based on life expectancy and the age at which you start benefits.

Life expectancy is an important part of this analysis. If you live a very long life, you can collect higher total CPP and OAS benefits if you delay past 65. There are lots of life expectancy calculators available online to help you with this. Here's one that gave me 79 years, and here's another that gave me 94 (it's highly detailed, but you need to provide your e-mail address).

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Here's another take on life expectancy – a "longevity illustrator" that can help show you the probability of living to certain ages.

Ask Rob

The question: "What is the best way for an 89-year-old to invest?"

My reply: With lifespans getting longer, this is a great question. I might do a column to provide a fuller answer at some point. For now, let's focus on your goals as an investor. Is it to preserve money you have, generate investment income or grow your holdings to provide an inheritance or legacy? Your goal dictates the investment plan. For example, capital preservation suggests you use GICs, bonds and savings accounts.

Do you have a question for me? Send it my way. Questions and answers are edited for length.

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About the Author
Personal Finance Columnist

Rob Carrick has been writing about personal finance, business and economics for close to 20 years. He joined The Globe and Mail in late 1996 as an investment reporter and has been personal finance columnist since November 1998. Rob's personal finance columns appear in The Globe on Tuesday and Thursday, and his Portfolio Strategy column for investors appears on Saturday. More

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