Updated

Two public pensions are paid in Canada and they follow different rules. Old Age Security depends on years of residence after age eighteen, with a full pension requiring forty years and a partial pension available from ten; it is clawed back above an income threshold through the recovery tax. The Canada Pension Plan depends on contributions: the benefit is calculated from average pensionable earnings, and taking it before the standard age reduces it permanently by a fixed percentage per month, while deferring it raises it by a larger percentage per month up to age seventy. This simulator applies both and shows the effect of the start date. It does not model the Guaranteed Income Supplement, which is income-tested, nor the provincial plan in Quebec, which has its own rates.

CPP & Old Age Security

Simulator Public Pensions Canada

Estimate your Canada Pension Plan (CPP) pension and Old Age Security (OAS) based on federal schedules.

Your situation

34 yrs
65 yrs
65,000 $
20 yrs
30 yrs

Summary

You will receive

$1,554

per month at retirement

Current salary

$5,417

gross per month

Income gap

-$4,096

per month

In practice: With a salary of $65,000/yr and 20 years of CPP contributions, you will receive approximately $1,554/mo in federal public pensions at age 65, i.e. 24% of your monthly salary.

You are eligible for the Guaranteed Income Supplement (GIS): an additional $427/mo.

Total pension / mo

$1,554

Replacement rate: 29%

CPP

$555

Canada Pension Plan

OAS

$572

30/40 years of residence

Retirement age

65 yrs

Standard age: 65 yrs

Pension breakdown

$0$150$300$450$600CPPOASGIS

Cumulative pensions paid

67 yrs71 yrs75 yrs79 yrs85 yrs$0k$100k$200k$300k$400k

Frequently Asked Questions

How much CPP will I receive at age 65?
The maximum CPP retirement pension at age 65 is $1,507.65 per month (2026). However, the average payment is around $815 per month because most people have not contributed the maximum amount for the full 39 years of their working life.
What is the difference between CPP and OAS?
CPP (Canada Pension Plan) is based on your employment contributions over your working career. OAS (Old Age Security) is a flat benefit based on years of Canadian residence after age 18 – you do not need to have worked to qualify for OAS.
Should I take CPP early at 60 or wait until 70?
Taking CPP at 60 reduces your pension by 36% permanently (0.6% per month early). Delaying until 70 increases it by 42% (0.7% per month after 65). If you expect to live past 74, delaying to 70 generally provides more total lifetime income.
Do I qualify for the Guaranteed Income Supplement (GIS)?
GIS is available to OAS recipients with low income. For single seniors, annual income must be below approximately $22,700 (2026) to qualify. GIS is tax-free and income-tested annually. Apply through Service Canada or it may be granted automatically. Because GIS is recalculated each July from the previous year's tax return, a one-off capital gain or an RRSP withdrawal can reduce or suspend the benefit for a full year.
How does the CPP enhancement (CPP2) affect my pension?
CPP2, introduced in 2024, adds contributions on earnings between the first ceiling ($74,600) and the second ceiling ($73,200). When fully mature, the enhanced CPP will replace up to 33% of pensionable earnings, up from the original 25%. The full effect will only be felt by those contributing for a complete career after 2019, so workers already close to retirement see a marginal increase rather than the headline figure.

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CPP, OAS, RRSP & TFSA

Understanding Canadian public pensions

The Canada Pension Plan (CPP)

The CPP is a mandatory contributory plan for all Canadian workers aged 18 to 70. It is funded by employee and employer contributions.

Your pension amount depends on:

  • Your contributions: Based on your earnings between the basic exemption ($3,500) and the maximum pensionable earnings ($74,600 in 2026)
  • Contribution duration: Maximum 47 years (age 18 to 65). The CPP automatically excludes 8 years of low earnings from the calculation
  • Replacement rate: 25% of average career earnings (base), up to 33.33% with the enhancement
  • Maximum pension at 65: $1,508/mo (2026). Very few Canadians receive the maximum
The CPP Enhancement since 2019

Since 2019, the federal government has implemented a gradual CPP Enhancement that will increase the replacement rate from 25% to 33.33%.

  • Phase 1 (2019-2023): Gradual increase in employee/employer contributions from 4.95% to 5.95%
  • Phase 2 (2024+): Additional 4% contribution on earnings between the first and second ceiling ($74,600 to $73,200)
  • Impact: A worker contributing their entire career under the new plan will receive approximately $1,800/mo instead of $1,508
  • Gradual phase-in: Current workers will only partially benefit from the enhancement, in proportion to their post-2019 contribution years

Good to know: The enhancement only applies to contributions made from 2019 onward. A worker who started contributing in 2000 and retires in 2035 will only benefit from the enhancement for their 16 post-2019 contribution years.

Old Age Security (OAS)

OAS is a universal pension funded by general federal government revenues. Unlike the CPP, it is not based on contributions but on length of residence in Canada.

  • Full pension: $763/mo with 40 years of residence in Canada after age 18
  • Partial pension: 1/40th per year of residence (minimum 10 years required to qualify)
  • Eligibility age: 65 (option to defer up to age 70 with a bonus)
  • Indexation: OAS is indexed quarterly based on the Consumer Price Index
  • Supplement at 75: Since 2022, recipients aged 75 and over receive an automatic 10% increase
The OAS clawback (recovery tax)

High-income retirees must repay part or all of their OAS pension. This is the OAS clawback (recovery tax) mechanism.

Clawback = (Net income - $95,323) x 15%

  • 2026 threshold: The clawback begins when net income exceeds $95,323
  • Rate: 15 cents for every dollar above the threshold
  • Full elimination: OAS is fully clawed back when income reaches approximately $148,065
  • Strategy: Pension income splitting, TFSA withdrawals (non-taxable), and planning RRSP/RRIF withdrawals can help stay below the threshold
The Guaranteed Income Supplement (GIS)

The GIS is a non-taxable benefit for low-income seniors who receive OAS.

  • Maximum amount: $1,139/mo for a single person (2026)
  • Eligibility: Annual income below approximately $22,700 (excluding OAS)
  • Gradual reduction: GIS decreases by 50 cents for every dollar of income
  • Non-taxable: GIS is not included in taxable income
  • Renewal: Must be renewed each year through the income tax return

Pitfall to avoid: A large RRSP/RRIF withdrawal can temporarily cause you to lose GIS. TFSA withdrawals, on the other hand, do not affect GIS eligibility.

Deferring your pension: a winning strategy?

In Canada, you can choose to receive your pensions earlier or later than the standard age of 65:

CPP

  • Early (age 60-64): -0.6% per month (i.e. -7.2% per year). At 60 = -36%
  • Deferral (age 66-70): +0.7% per month (i.e. +8.4% per year). At 70 = +42%
  • Break-even: deferring from 65 to 70 pays off around age 82

OAS

  • No early option: OAS starts at the earliest at age 65
  • Deferral (age 66-70): +0.6% per month (i.e. +7.2% per year). At 70 = +36%
  • Break-even: deferring from 65 to 70 pays off around age 83

When to defer? If you are in good health and have other income sources (RRSP, TFSA, employer pension), deferring is generally advantageous. If your life expectancy is reduced or you need the income, taking the pension early may be preferable.