CPP at 70 Pays 42% More Than at 65. The Clawback Lands on Your OAS
Wait until 70 to start your CPP (Canada Pension Plan) retirement pension and the payment is 42% higher than if you had started at 65. That beats the equivalent trade on Old Age Security, which pays 36% more for the same five-year wait, and it breaks even about fourteen months sooner. The CPP increase itself is never clawed back the way a larger OAS payment can be. But it is still ordinary taxable income, and for a reader already collecting OAS above the recovery-tax threshold, a bigger CPP cheque can shrink the OAS cheque sitting beside it.
This piece is the companion to this morning’s look at deferring OAS to 70, which found that waiting on that pension pays 36% more but hands a meaningful slice of it back through the OAS recovery tax at higher incomes. CPP is built differently: deferring it does not create a recovery tax on the CPP payment itself, though as the sections below show, a bigger CPP cheque can still cost you OAS.
The rule and the two dollar streams
Canada Pension Plan rules, as set out by canada.ca in When to start your pension, work symmetrically around age 65 but not evenly. After 65, payments increase 0.7% for every month you wait, which works out to 8.4% a year, up to a maximum of 42% if you hold off until 70. Before 65, payments decrease 0.6% for every month you start early, 7.2% a year, to a maximum reduction of 36% at age 60. Canada.ca states there’s no benefit to waiting past 70, since the maximum monthly amount is reached at that age. Put the two ends together and a pension started at 70 pays 2.2188 times what the same pension would pay if started at 60.
Canada.ca’s How much you could receive page publishes two dollar figures for a pension starting at 65: a maximum of $1,507.65 a month, as of January 2026, and an average for new beneficiaries of $858.34 a month, as of July 2026, a different month from the maximum. Every other CPP dollar figure here, including the deferred amounts, the dollar gaps and the age-by-age table below, is our arithmetic applying the published adjustment factors to those two numbers rather than a further canada.ca figure. The OAS amounts later on come from this morning’s OAS analysis, and the longevity figures from Statistics Canada. Deferring the maximum to 70 raises it to $2,140.86 a month, a gap of $633.21 a month or $7,598.56 a year. Deferring the average to 70 raises it to $1,218.84 a month, a gap of $360.50 a month or $4,326.03 a year.
Every start age from 60 to 70, in dollars
Nobody actually faces a binary choice at 65. CPP can start in any month from 60 to 70, and every age in between carries its own factor and dollar amount.
| Age | Adjustment vs. age 65 | Maximum pension | Average pension |
|---|---|---|---|
| 60 | -36.0% | $964.90 | $549.34 |
| 61 | -28.8% | $1,073.45 | $611.14 |
| 62 | -21.6% | $1,182.00 | $672.94 |
| 63 | -14.4% | $1,290.55 | $734.74 |
| 64 | -7.2% | $1,399.10 | $796.54 |
| 65 | 0.0% | $1,507.65 | $858.34 |
| 66 | +8.4% | $1,634.29 | $930.44 |
| 67 | +16.8% | $1,760.94 | $1,002.54 |
| 68 | +25.2% | $1,887.58 | $1,074.64 |
| 69 | +33.6% | $2,014.22 | $1,146.74 |
| 70 | +42.0% | $2,140.86 | $1,218.84 |
Our arithmetic on the canada.ca adjustment factors, applied to the two published amounts: the $1,507.65 maximum as of January 2026 and the $858.34 average as of July 2026.
Why the maximum is the wrong number to plan against
The 42% multiplier looks biggest against the maximum pension. Comparing the January 2026 maximum against the July 2026 average, the average new pension at 65 is only 56.9% of the maximum, short by $649.31 a month. Forty-two percent of a smaller number is a smaller number, and this is where the arithmetic gets uncomfortable: an average pension deferred all the way to 70, at $1,218.84 a month, is still $288.81 a month below what the maximum pays at 65 without any deferral at all. Someone building a retirement plan around “CPP at 70” needs to know which CPP they are actually going to receive, because the gap between the average deferred pension and the maximum undeferred one is real money every single month.
The break-even, and the 14-month gap against OAS
Deferral only pays off if you live long enough to collect the higher amount for long enough to make up for the payments you gave up in the meantime. On the published adjustment factors, waiting from 65 to 70 breaks even 142.86 months after age 70, which lands at age 81.90, or 81 years and 11 months. This is our arithmetic on the published factors, not a canada.ca figure, and it is scale-free: the same 42% applies to both streams, so the crossing point is identical whether you run it on the maximum or the average pension. Indexation does not move it either, because both streams rise with the same Pension Index. On the maximum pension, both the age-65 start and the age-70 start have paid out an identical $305,837.57 by that break-even point. The other two comparisons work the same way: starting at 60 instead of 65 breaks even 106.67 months after 65, at age 73.89, and starting at 60 instead of 70 breaks even 98.46 months after 70, at age 78.21.
Set that against OAS. Deferring OAS from 65 to 70 raises the payment 36%, from $751.97 a month to $1,022.68 a month, at 0.6% for each month of deferral rather than CPP’s 0.7%. The CPP increase is 1.1667 times the OAS increase for the same five-year wait. Even so, OAS breaks even sooner than that smaller increase would suggest, at age 83.08, the figure this morning’s OAS piece published, because OAS pays a further 10% increase at age 75 that lands on the deferred stream too and pulls its crossing forward. CPP still gets there first, at 81.90, about 14.2 months earlier, 1.18 years.
The bigger difference is what happens to the increase once you have it. OAS is subject to the recovery tax under section 180.2(2) of the Income Tax Act, and it is not a small drag: in the Ontario worked example from this morning’s piece, built on $110,000 of other income, deferring OAS added $3,248.52 of gross pension, and the recovery tax alone took $487.27 of it, 15.0%, before any regular income tax was even applied. Above $173,160.88 of adjusted income, the deferred OAS increase disappears entirely. CPP itself has no equivalent mechanism. There is no recovery tax on the CPP payment at any income level, and the increase is taxed the same way as the rest of your ordinary income, nothing more.
A bigger CPP still shows up in the OAS math
CPP not being clawed back is true only of the CPP payment itself. It is not true of a reader’s overall position if they also collect OAS. Clause 56(1)(a)(i)(B) of the Income Tax Act includes “the amount of any benefit under the Canada Pension Plan” in income. Section 180.2(1) then defines the adjusted income the OAS recovery tax is charged on as income under Part I of the Act, subject to a short closed list of exclusions: amounts included under paragraph 56(1)(q.1) or subsection 56(6), gains on a disposition to which section 79 applies, gains described in subsection 40(3.21), and amounts deductible under paragraph 20(1)(ww) or 60(w), (y) or (z). CPP is on none of those lists. Section 180.2(2) then charges the lesser of two amounts: the OAS actually received, or 15% of adjusted income above the recovery-tax threshold, published at $93,454. That lesser-of test matters, because it means the 15 cents is not charged without limit.
So deferring CPP does not create a clawback on the CPP itself, but the larger payment raises adjusted income, and for a reader already above that threshold who is also collecting OAS, that costs 15 cents of OAS for every extra CPP dollar. On the maximum pension, the extra $7,598.56 a year from deferring to 70 costs $1,139.78 of OAS, leaving $6,458.78. On the average pension, the extra $4,326.03 a year costs $648.90 of OAS, leaving $3,677.13. Both figures are before ordinary income tax, and both describe the middle of the range rather than all of it. Below the threshold the extra CPP costs no OAS at all. Above the point where the OAS is fully recovered, $173,160.88 of adjusted income for a pension deferred to 70, it costs no further OAS either, because there is no OAS left to take. The 15 cents applies in between, while the OAS is only partly recovered.
Whichever pension you defer, the years between 65 and 70 still have to be funded from somewhere while you wait. The RRSP, or the RRIF it eventually becomes once withdrawals are mandatory, is one source, though a withdrawal from either counts as income and can push adjusted income higher in exactly the way described above. A TFSA withdrawal during those years is not counted as income at all, so it does not interact with the OAS recovery tax, or with the CPP-driven version of it, the way an RRSP or RRIF withdrawal can.
The survivor’s-pension ceiling ignores the deferral entirely
Section 58(2)(c)(i) of the Canada Pension Plan Act applies to a survivor aged 65 or over who was born after December 31, 1932 and whose own retirement pension became payable after December 31, 1997. For that survivor, the Act pays whichever is less of two amounts. For the first, start with A, which is 60% of the base portion of the deceased contributor’s retirement pension. From A subtract whichever is smaller: 40% of A, or 40% of the survivor’s own retirement pension. The second is a ceiling: the survivor’s own retirement pension plus the additional amount cannot exceed 25% of one-twelfth of the survivor’s Maximum Pensionable Earnings Average. In both the 40% test and the ceiling, the survivor’s own retirement pension is the base portion calculated under paragraph 46(1)(a), measured “without regard to subsections 46(3) to (6)”, a range that contains the early-start and late-start adjustment factors in subsections 46(3) and 46(3.1). That means the survivor’s own base-portion pension enters both calculations at its unadjusted age-65 value, regardless of when they actually started collecting it.
The consequence is narrow but worth knowing if you are planning as a couple. Deferring your own CPP to 70 does not push you further into, or through, that ceiling. The 42% uplift is invisible to the test. Taking your own CPP early at 60 does not buy you a larger survivor’s pension either. The 36% reduction is equally invisible. Neither decision moves the number the test actually uses.
What actually decides it
Health and family longevity matter more than any break-even table, since the whole case for deferral rests on living past it. Statistics Canada’s life tables, table 13-10-0114 for the 2022 reference period, put life expectancy at 65 at 20.85 years for both sexes combined, to age 85.85; 19.43 years for men, to 84.43; and 22.15 years for women, to 87.15. The CPP break-even of 81.90 sits below all three: 3.95 years below the both-sexes figure, 2.53 years below men’s, 5.25 years below women’s. The same tables show that 64.6% of those alive at 65 reach age 83. Since the CPP break-even falls before 83, strictly more than 64.6% of that cohort live past it.
The break-even also assumes the payments taken early are spent, not invested. If they earn a return instead, the crossing point moves out. On the same constant-dollar basis, our model puts the CPP break-even at age 83.08 with a 1% real return on the early payments, at age 84.42 with a 2% real return, and at age 86.17 with a 3% real return, against 81.90 with no return assumed at all.
Whether you have other assets to bridge the years from 65 to 70 without CPP income matters just as much, since deferral only works if you can afford to wait. And whether you are still working changes the calculation again, since continued employment income and CPP income stack together for tax purposes either way.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. CPP adjustment factors and the quoted statement about age 70 are from canada.ca, CPP retirement pension: When to start your pension, date modified June 18, 2026. The maximum monthly pension at 65 (January 2026) and the average for new beneficiaries at 65 (July 2026) are from canada.ca, How much you could receive, date modified September 29, 2026; both pages were fetched September 29, 2026. Deferred amounts, the average-to-maximum comparison and every break-even figure are our arithmetic on those published factors and amounts. The survivor’s-pension rule is section 58(2)(c)(i) of the Canada Pension Plan, R.S.C. 1985, c. C-8, on the Justice Laws Website, fetched September 29, 2026. OAS comparison figures are from our September 29, 2026 OAS deferral analysis, validated against Service Canada’s published deferral table. Life expectancy and survivorship are Statistics Canada table 13-10-0114, reference period 2022. The Income Tax Act provisions (56(1)(a)(i)(B), 180.2(1) and 180.2(2)) are from the Justice Laws Website, fetched September 29, 2026. Break-even figures at a real return are our model on the same constant-dollar basis.
