Most Canadians spend more time choosing a mortgage than choosing how to draw their retirement income, even though retirement decisions affect more dollars over a longer time. Six decisions, taken together, define how much guaranteed income you receive for life, how much you pay in tax, and how much you leave to your estate. This guide walks through each decision, points to the underlying rules and figures, and links to the deep-dive article on each.
The six decisions in one table
| # | Decision | Default that often hurts you | Better default for most Canadians |
|---|---|---|---|
| 1 | When to start CPP (60 to 70) | Start at 65 because that is the “normal” age | If health and other income permit, delay to 70 for +42% lifetime CPP, indexed |
| 2 | When to start OAS (65 to 70) | Start at 65 alongside CPP | Delay if other income would cause OAS clawback at 65; +0.6% per month bonus |
| 3 | How to drain the RRSP | Wait until age 71 then take the minimum from a RRIF | Convert to RRIF after 65 and use bracket-filling withdrawals between 65 and 71 |
| 4 | Whether to keep contributing to CPP after 65 (while working) | Default to continuing contributions because CPT30 paperwork seems hard | Decide consciously based on PRB value vs cash flow; opt out if work is brief |
| 5 | How to manage OAS clawback | Ignore until the surprise hits at age 71+ | Spread RRIF withdrawals from 65; use TFSA for top-up income; pension split |
| 6 | Estate planning of registered accounts and capital property | Default rollover to spouse and hope for the best | Design the deemed disposition with the legal representative; consider GRE planning |
Decision 1: When to start CPP
CPP can be claimed any time from age 60 to 70. Each month before 65 reduces the monthly pension by 0.6 percent (up to a 36 percent cut at age 60). Each month after 65 increases it by 0.7 percent (up to a 42 percent bonus at 70). The maximum CPP retirement pension at age 65 in January 2026 is $1,507.65/month, indexed annually. The break-even age between starting at 65 versus 70 is approximately 81 to 82, before factoring in spousal survivor benefits and CPI growth advantages.
Read more: CPP Start-Age Decision: 60 vs 65 vs 70 and Should I Delay CPP If I Have an RRSP?
Decision 2: When to start OAS
OAS cannot start before age 65. Each month delayed past 65 adds 0.6 percent to the monthly amount, up to a 36 percent bonus at age 70. The April-June 2026 maximum OAS pension is $743.05/month for ages 65 to 74 and $817.36/month for ages 75 and over (the 10 percent post-75 boost is permanent). Unlike CPP, OAS is subject to a recovery tax (clawback) of 15 percent on net world income above $93,454 (using 2025 income for OAS paid July 2026 to June 2027).
Read more: CPP and OAS Together: When to Start Each Benefit
Decision 3: How to drain the RRSP
You must convert your RRSP to a RRIF, an annuity, or a lump-sum withdrawal by December 31 of the year you turn 71. Most retirees benefit from converting earlier, between 65 and 71, to use the federal pension income amount, qualify for pension income splitting with a spouse, and draw down the RRSP at lower tax brackets before CPP and OAS push you higher. The 2026 RRIF minimum at age 71 is 5.28 percent and rises with age, reaching 20 percent at age 95.
Read more: RRSP to RRIF Strategy Before Starting CPP and OAS
Decision 4: Whether to keep contributing to CPP after 65
CPP contributions are mandatory for employees under 65. Between 65 and 70, contributions continue automatically while working unless you elect out using Form CPT30. Each year of contribution after starting your CPP retirement pension earns a Post-Retirement Benefit (PRB) of up to $54.69/month (at 2026 maximum), added to your monthly CPP starting the following January. After age 70, contributions stop regardless.
Read more: CPP While Working: Contributions, PRB, and Opt-Out Rules
Decision 5: Managing the OAS clawback
The OAS recovery tax is the most preventable surprise in Canadian retirement. Each dollar of net world income above $93,454 reduces OAS by 15 cents, until OAS is fully clawed back around $151,668 (higher ceiling for those age 75+). The clawback is calculated on the prior year’s tax return and applied to the next OAS year (July to June). Strategies that reduce exposure: pension income splitting with a spouse on Form T1032, drawing TFSA before non-registered, smoothing RRIF withdrawals from age 65, and timing capital gains in lower-income years.
Read more: OAS Clawback in Retirement: How to Avoid the 15% Recovery Tax
Decision 6: Estate planning of registered and capital property
Death triggers a deemed disposition of all capital property at fair market value (subsection 70(5) of the Income Tax Act). Registered plans pass through different mechanisms: RRSPs and RRIFs are taxable in full on the final return unless rolled to a qualifying beneficiary; TFSAs are not taxable at death; capital property held outside registered plans is taxable on accumulated gains unless transferred to a spouse under the spousal rollover. Estate-level planning includes graduated rate estate (GRE) status for the first 36 months, principal residence designation on Form T1255, and timing of dispositions inside the GRE window.
Read more: Capital Gains Tax When Someone Dies in Canada, Principal Residence Exemption After Death, and Graduated Rate Estate vs Regular Trust.
How the decisions interact
Each decision affects the others. Delaying CPP increases lifetime guaranteed income but requires drawing from the RRSP earlier. Drawing from the RRSP between 65 and 71 reduces the future RRIF balance and the OAS clawback at 71. Maximum CPP requires near-maximum contributions in employment years, which in turn affects the salary-vs-dividends decision for incorporated owner-operators. The retirement plan that ignores these interactions usually leaves money on the table at one of the corners.
Worked example: a typical sequencing
Couple, both age 65, $400,000 each in RRSPs, $50,000 each in TFSAs, no defined benefit pension. CPP credits: $1,200/month each at 65. Spending need: $70,000/year combined.
- Take OAS at 65 ($743.05 × 2 = $1,486.10/month, indexed). Net world income stays well below the clawback threshold.
- Defer CPP to 70 ($1,200 × 1.42 = $1,704/month each, indexed). At 70 combined CPP becomes $40,896/year + indexed.
- From age 65 to 70, draw $25,000/year from each RRSP. Convert one or both RRSPs to RRIFs at 65 to enable pension income splitting on Form T1032.
- Approaching age 71, calculate RRIF minimums and decide whether additional bracket-filling withdrawals before age 71 are worthwhile.
- From age 71 onward, monitor net world income each year against the OAS clawback threshold; deploy TFSA cash if income approaches threshold.
- Update wills and beneficiary designations regularly. Designate principal residence eligibility in event of death; structure spouse rollovers; consider GRE planning for any meaningful non-registered portfolio.
Forms and tools that matter
| Form / tool | Use |
|---|---|
| ISP1000 / ISP1003 | Apply for CPP retirement pension |
| ISP3550 | Apply for OAS pension |
| Form CPT30 | Election to stop CPP contributions while working past 65 |
| Form T1213(OAS) | Request to reduce OAS recovery tax withholding |
| Form T1032 | Joint election to split pension income with spouse |
| Form T1255 | Designate principal residence on final return |
| Form T1-OVP | Report excess RRSP contribution |
| My Service Canada Account | Track CPP/OAS estimates, payment history, and pension applications |
Frequently asked questions
- What are the most important retirement decisions in Canada?
- When to start CPP (60-70), when to start OAS (65-70), how and when to convert RRSP to RRIF, whether to keep contributing to CPP after 65, how to manage OAS clawback, and how to plan for the deemed disposition at death.
- Should I take CPP and OAS at 65?
- Often not both. The CPP delay rate is 0.7 percent per month, higher than the OAS delay rate of 0.6 percent. Most retirees with average or better life expectancy benefit from delaying at least one and using RRSP/RRIF income to bridge the gap.
- What is the OAS clawback threshold?
- $93,454 of net world income for the 2025 income year, applied to OAS paid from July 2026 to June 2027. Each dollar above the threshold reduces OAS by 15 cents.
- When must I convert my RRSP to a RRIF?
- By December 31 of the year you turn 71. Many retirees convert earlier (between 65 and 71) to use the federal pension income amount, enable pension income splitting, and draw down at lower tax brackets.
- Can I keep contributing to CPP after 65?
- Yes, automatically while employed between 65 and 69 unless you elect out using Form CPT30. After 70, contributions stop regardless of employment status.
- Does the deemed disposition at death wipe out my retirement?
- It triggers tax on accrued capital gains, but spousal rollover (subsection 70(6)) defers that tax for property transferred to a Canadian-resident spouse or qualifying trust. RRSPs and RRIFs are also tax-free if rolled to a qualifying beneficiary.
- What is the most overlooked retirement decision?
- When to convert the RRSP to a RRIF. Defaulting to age 71 leaves bracket-filling opportunities on the table between ages 65 and 71, when income is often lower and tax brackets less crowded.