In Canada, the Canada Pension Plan (CPP) and Old Age Security (OAS) are essential programs that provide financial support for seniors.
Many Canadians are opting to continue working beyond age 70, either out of financial necessity or personal fulfillment.
This article explores how working at 70 impacts your CPP and OAS benefits and provides a comprehensive guide on how seniors can work while receiving these benefits.
Can You Work at 70 and Still Receive CPP?
Yes, you can continue working while receiving Canada Pension Plan (CPP) benefits, even if you start collecting them at age 70. In fact, working after 65 and making CPP contributions can increase your monthly benefit due to Post-Retirement Benefits (PRB).
The PRB is a supplementary monthly payment added to your CPP as long as you are employed and contributing to the plan after the age of 65.
However, once you turn 70, you are no longer required to contribute to CPP, although you will continue to receive both your base CPP pension and the Post-Retirement Benefits accumulated between ages 65 and 70.
Key Details about CPP and Working at 70
| Details | Information |
|---|---|
| Can You Work While Receiving CPP? | Yes, without affecting your benefits |
| CPP Contributions After Age 70 | No contributions required after age 70 |
| Post-Retirement Benefit (PRB) | Additional monthly payments for those working after 65 |
| CPP Payment Start Age | Ideal age is 65, but can begin at age 60 |
| Taxability | CPP benefits are taxable |
Can You Work While Receiving OAS?
Yes, you can work and earn additional income while receiving Old Age Security (OAS), but there’s a catch: the OAS Clawback (also known as the Recovery Tax) applies.
If your income exceeds a certain threshold, you will be required to repay part or all of your OAS benefits. This clawback is based on your net world income and is implemented progressively.
Income Thresholds for OAS Clawback
The OAS Clawback threshold depends on your age and income level.
The minimum income recovery threshold is based on your annual income, and once you exceed the threshold, you will be required to repay 15% of the difference between your income and the threshold amount.
Here are the income thresholds for OAS recovery tax:
| Age | Income Year | Minimum Threshold | Maximum Threshold |
|---|---|---|---|
| 65-74 Years | July 2024 – June 2025 | $86,912 | $142,609 |
| 75+ Years | July 2024 – June 2025 | $86,912 | $148,179 |
| 65-74 Years | July 2025 – June 2026 | $90,997 | $148,451 |
| 75+ Years | July 2025 – June 2026 | $90,997 | $154,196 |
For instance, if you earn $100,000 and the OAS threshold is $86,912 for the period July 2024 – June 2025, the difference would be $13,088. You would need to repay 15% of this difference, which amounts to $1,963.2.
Impact of Working Beyond 70 on CPP and OAS
- CPP: Once you reach age 70, you can continue working, but you are no longer required to contribute to CPP. Your monthly CPP pension will include both your base pension and any Post-Retirement Benefits accumulated during your continued employment.
- OAS: While you can earn income while receiving OAS, any income exceeding the recovery tax thresholds will result in a clawback of your OAS benefits. It’s important to monitor your earnings and be aware of the income thresholds to manage how much of your OAS you may need to repay.
How to Maximize Your Retirement Income
- Work Longer: By continuing to work after the age of 65, you not only increase your CPP payments but can also build Post-Retirement Benefits to boost your income.
- Delay Your OAS: If you are able to delay receiving OAS until age 70, you will receive higher payments, increasing your financial security.
- Monitor Your Earnings: Be mindful of your income when receiving OAS, as higher earnings can trigger the clawback.
- Consult a Financial Advisor: A professional can help you plan your retirement strategy by analyzing your income, tax implications, and OAS recovery tax to ensure you make the most of your benefits.
In 2025, seniors have the option to continue working while receiving their CPP and OAS benefits.
By understanding how working at 70 can impact your benefits, including the potential OAS clawback and Post-Retirement Benefits, you can make informed decisions about your retirement planning.
Whether you decide to delay your OAS or keep working to boost your CPP, knowing your options allows you to maximize your retirement income and enjoy financial security throughout your later years.
FAQs
Can I continue working while receiving CPP at 70?
Yes, you can work while receiving CPP, and once you reach age 70, no further contributions to CPP are required.
How does the OAS clawback work?
If your income exceeds the OAS threshold, you will need to repay 15% of the difference between your earnings and the threshold.
What is the best age to start receiving OAS?
The best age to start receiving OAS is 65, but delaying it until age 70 can result in higher monthly payments.