Get the Maximum OAS Payment of $990 Per Month by Delaying Until Age 70

Old Age Security (OAS) is a foundational retirement program in Canada designed to provide financial support to seniors. Every Canadian citizen or legal resident is eligible to receive monthly payments starting at age 65, regardless of their income. Let’s dive into the key details of the OAS program and explore how seniors can maximize their retirement income.

What is Old Age Security (OAS)?

The OAS program is Canada’s universal retirement pension. It provides a modest monthly payment to individuals who meet the age requirement. The payments begin automatically in the month following the senior’s 65th birthday, provided Service Canada has sufficient information. If not, eligible individuals are notified and encouraged to apply promptly.

For the first quarter of 2025, the maximum monthly OAS payment is $727.67. However, this amount excludes potential government-approved increases expected later in the year.

Deferring OAS: A Smart Financial Incentive

While the OAS amount is helpful, financial planners highlight that the yearly maximum of $8,732.04 may not cover all retirement expenses. To address this, the government provides an option to defer OAS payments for up to five years, offering a financial incentive.

By delaying OAS, seniors receive an annual increase of 7.2% (or 0.6% per month). If deferred to age 70, the monthly payment rises to $990 (rounded from $989.63), a permanent boost of 36%. This annual difference of $3,143.53 makes deferring worthwhile for those in good health and without immediate financial needs.

Supplementing Retirement Income

OAS alone may not be sufficient for a comfortable retirement. Thankfully, seniors can enhance their income by combining OAS with the Canada Pension Plan (CPP) and leveraging retirement savings tools like the Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA).

These accounts allow individuals to invest in dividend stocks and generate additional passive income. For instance, investing in dividend-paying companies like Diversified Royalty Corp (TSX:DIV) can yield attractive returns.

• Diversified Royalty Corp (TSX:DIV): This company collects royalties from eight partners, including Mr. Lube and AIR MILES.
  • Share Price: $2.96
  • Dividend Yield: 8.44%
  • A $7,000 TFSA investment could generate $590.80 annually or $49.23 monthly as tax-free income.

Since its first dividend payment in 2014, Diversified Royalty has maintained consistent payouts, making it a reliable choice for income-focused investors.

Investing for Capital Growth

For those seeking both capital growth and dividend income, Aecon Group (TSX:ARE) in the construction and engineering industry is a solid option.

• Share Price: $27.05
• One-Year Price Return: +112.74%
• Dividend Yield: 2.81%

Aecon’s robust backlog of $6.0 billion (as of Q3 2024) and the growing demand for its services ensure steady revenue growth. With a proven track record, Aecon is positioned to deliver solid returns for years to come.

Planning for Retirement Success

While OAS and CPP provide lifetime income, they may not suffice for all financial needs during retirement. Deferring OAS payments and investing wisely in dividend-paying stocks or growth-oriented companies can significantly boost retirement income.

By combining these strategies, Canadian seniors can enjoy financial stability and peace of mind in their golden years. Whether it’s maximizing TFSA contributions or choosing high-yield dividend stocks, every step helps build a stronger retirement plan.

Conclusion

The Old Age Security (OAS) program is a vital support system for Canadian seniors. Although the payments are modest, deferring them and using supplementary retirement tools like RRSPs and TFSAs can significantly improve financial outcomes. By exploring smart investment options like Diversified Royalty Corp and Aecon Group, retirees can create a stable and comfortable income stream for the future.

This article has been carefully fact-checked by our editorial team to ensure accuracy and eliminate any misleading information. We are committed to maintaining the highest standards of integrity in our content.