Can You Work Past Age 70 While Receiving CPP And OAS?

When you hit 65, it’s not just about celebrating another year—it’s about making critical financial decisions that shape your retirement. For those like Sarah, who are still working full-time, managing survivor benefits, and planning for CPP (Canada Pension Plan) and OAS (Old Age Security), the questions can feel overwhelming. Let’s break it down.

Understanding CPP and OAS: To Delay or Not to Delay?

At 65, you’ve hit the milestone where you’re eligible to start receiving CPP and OAS. But should you? The short answer: delay both until age 70 if you can afford to.

Why Delay?

Higher Monthly Payments: Delaying CPP and OAS until age 70 increases your monthly benefits significantly due to the “late retirement” bonus.
Long-Term Gains: If you expect to live into your 80s or beyond, the extra monthly income will far outweigh the early payments you could have received.

What About Contributions?

Yes, you can continue contributing to CPP even while working full-time. This not only boosts your benefits but also helps maximize your retirement income.

Can You Work Past 70 While Receiving CPP and OAS?

Absolutely. In fact, there’s no age limit to how long you can work while collecting these benefits.

Pros of Working Past 70:

No Impact on CPP/OAS: You won’t lose your benefits simply because you’re working.
Additional Income: You’ll continue earning a steady income, reducing the need to dip into savings prematurely.
Increased Savings: More money means you can invest, pay down debt, or boost your retirement funds.

Cons to Consider:

Higher Taxes: Your income will be taxed at a higher rate, which may affect the OAS clawback (a reduction in OAS benefits based on income).
OAS Clawback: If your income exceeds the annual threshold, you’ll lose part of your OAS benefits.

However, the trade-off is often worth it—having extra income can provide more security and flexibility in retirement.

How to Manage Your Finances: From Mortgage to Investments

With $250,000 in savings, a $100,000 mortgage, and no company pension, it’s crucial to make strategic financial moves.

1. Focus on RRSP Contributions

Maximize Tax Benefits: Contributing to your RRSP now provides immediate tax deductions, lowering your taxable income.
Growth Potential: Investments within your RRSP can grow tax-deferred until you withdraw in retirement, potentially at a lower tax rate.

2. Mortgage Management

Consider paying off your $100,000 mortgage using your non-registered savings. Once that’s done, you might:

Open a Secured Line of Credit: This provides flexible access to funds without the stress of traditional debt.
Evaluate TFSA Contributions: While TFSAs are tax-free, if your mortgage rate is higher than the expected return, prioritize paying down debt instead.

3. Retirement Planning

Consider Downsizing: If maintaining your condo feels burdensome, selling and renting might free up capital for investments.
Diversify Investments: Don’t put all your money in one place. A balanced mix of stocks, bonds, and other assets can optimize returns.

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Planning for the Unexpected

While working past 70 can boost your income, it’s wise to plan for scenarios where you might not be able to work indefinitely.

Emergency Fund: Keep 6–12 months of living expenses in accessible savings.
Disability Insurance: If you’re still working, consider if additional coverage is necessary.
Financial Advisor: Consulting a professional can help refine your strategy, ensuring you’re on track for both short-term needs and long-term goals.

Final Thoughts: Making It Work for You

Sarah’s approach—working full-time, delaying CPP and OAS, and managing a modest mortgage—is a solid strategy for maximizing retirement income. The key is to balance earning, saving, and investing wisely while keeping an eye on your future needs.

Remember, retirement isn’t just about the numbers—it’s about creating a life that aligns with your goals, values, and dreams.