According to Diane Finley, Canadian minister of Human Resources and Skills Development, “People today are taking many different paths to retirement, and some seniors are choosing to work longer. Canadians now have the option to voluntarily defer their OAS pension for up to five years in exchange for a higher monthly amount.”
The OAS program is part of Canada’s retirement income system, providing benefits to most Canadians age 65 and older. The program consists of a basic pension, a Guaranteed Income Supplement (GIS) and monthly allowances for eligible low-income people, ages 60 to 64.
As part of the national budget, the Canadian government announced the new voluntary deferral option for the OAS, which is designed to give more flexibility and choice in retirement planning to Canadians.
The OAS is funded through general tax revenues and is indexed to the Consumer Price Index. It provides a modest base upon which to build additional income for retirement. From 2012 to 2013, it provided 5.2 million seniors with an estimated $40.4 billion in benefits.
More information can be found on the Service Canada website.