How WealthPath Handles CPP & OAS
WealthPath models the two main Canadian government retirement benefits — the Canada Pension Plan (CPP) and Old Age Security (OAS) — as separate programs with their own rules. This guide explains how to enter them, how the start age changes your benefit, how the OAS clawback works, and how to use the start-age what-if tool.
Quick Start
- Go to Income and add two income sources:
- CPP (Canada Pension Plan) — enter your estimated CPP at age 65.
- OAS (Old Age Security) — enter the full OAS amount at age 65.
- Set a start age for each (CPP: 60–70, OAS: 65–70).
- If you've lived in Canada fewer than 40 years after age 18, set Years lived in Canada after age 18 on your Profile so OAS is prorated correctly.
- WealthPath automatically applies the start-age adjustments, the residency proration, and the OAS recovery tax (clawback) to your projection.
A Start-age what-if card appears on the Income page once you've added CPP or OAS, showing how much each benefit changes if you start earlier or later.
Why CPP and OAS Are Separate
CPP and OAS look similar — both are lifelong, inflation-indexed government benefits — but they follow very different rules:
| CPP | OAS | |
|---|---|---|
| Based on | Your contributions during your working years | Years of Canadian residency |
| Earliest start | Age 60 | Age 65 |
| Latest start | Age 70 | Age 70 |
| Early-start reduction | Yes (−0.6%/month before 65) | Not available before 65 |
| Deferral increase | +0.7%/month after 65 | +0.6%/month after 65 |
| Subject to the OAS clawback | No | Yes |
Because of these differences, WealthPath models them as two distinct income types rather than a single combined "CPP/Social Security" entry.
CPP Start Age
You enter your estimated CPP at age 65 — the figure shown on your Statement of Contributions from Service Canada. WealthPath then adjusts it based on the age you choose to start:
- Before 65: reduced by 0.6% per month, down to a maximum reduction of −36% at age 60.
- After 65: increased by 0.7% per month, up to a maximum increase of +42% at age 70.
For example, an age-65 estimate of $11,000/year becomes:
| Start age | Adjustment | Annual CPP |
|---|---|---|
| 60 | −36% | $7,040 |
| 65 | — | $11,000 |
| 70 | +42% | $15,620 |
Set the start age in the Start age (60–70) field when the income type is CPP.
OAS Start Age & Residency
For OAS you enter the full OAS amount at age 65. Two factors then adjust it.
Deferral
OAS cannot start before 65. If you defer, it increases by 0.6% per month, up to +36% at age 70. An age-65 amount of $8,400/year becomes $11,424/year if deferred to 70.
Your OAS start age is independent of your CPP start age and your retirement age — you can, for example, retire at 62, start CPP at 65, and defer OAS to 70.
Residency
Full OAS requires 40 years of residency in Canada after age 18. If you have fewer, OAS is prorated:
OAS factor = years of residency ÷ 40
For example, 30 years of residency pays 75% of the full amount. Set this on your Profile under Years lived in Canada after age 18. Leave it blank if you've lived in Canada 40 or more years (full OAS).
The OAS Clawback (Recovery Tax)
OAS is income-tested. If your net income in retirement is high, part or all of your OAS is "clawed back" through the OAS recovery tax:
- 15% of net income above the annual threshold (~$90,997 in 2025, indexed to inflation each year) is recovered.
- The clawback is capped at 100% of the OAS you received — once net income reaches roughly $148,000 (in 2025 terms), your entire OAS is recovered.
Net income includes everything taxable — CPP, OAS, pensions, and your RRSP/RRIF withdrawals. Large RRSP/RRIF withdrawals can therefore push you over the threshold and trigger a clawback.
WealthPath includes the clawback in each year's Tax Cost and shows it as a distinct line item:
- On the Projection → After-Tax Income tab, a banner marks the age where the clawback begins, and the Total Tax Paid card notes how much of the total is OAS clawback.
Planning tip: drawing down RRSPs before OAS starts (an "RRSP meltdown") can lower your taxable income in later years and keep you under the clawback threshold. WealthPath surfaces this guidance in the start-age what-if card.
The Start-Age What-If Tool
On the Income page, once you've added a CPP or OAS source, a Start-age what-if card compares your annual benefit at each start age and shows a break-even age — the age at which choosing to defer pays off in cumulative dollars (ignoring inflation and any returns earned on benefits taken earlier):
- CPP: deferring from 65 to 70 breaks even at about age 82.
- OAS: deferring from 65 to 70 breaks even at about age 84.
If you expect to live well past the break-even age, deferring generally pays more over your lifetime; if not, starting earlier may be better. The card also explains the clawback in plain language.
Where CPP & OAS Show Up in the App
| Page | What you see |
|---|---|
| Income | Add/edit CPP and OAS as distinct income types; the Start-age what-if card. |
| Profile | "Years lived in Canada after age 18" field (OAS residency proration). |
| Projection | CPP/OAS included in Retirement Income; OAS clawback banner and Total Tax Paid breakdown on the After-Tax Income tab. |
| Dashboard | Retirement Income metric reflects the adjusted CPP/OAS amounts. |
What the Model Does NOT Cover
WealthPath's CPP/OAS model is built for planning, not for benefit applications. It makes several simplifications:
- GIS (Guaranteed Income Supplement) and its interaction with RRSP/RRIF withdrawals are not modeled.
- CPP post-retirement benefits from continuing to contribute after starting CPP are not modeled.
- Quebec Pension Plan (QPP) rule differences are not modeled (CPP rules are used).
- The Allowance / Allowance for the Survivor (ages 60–64) is not modeled.
- CPP survivor's pension and combined-benefit maximums are not yet modeled (planned alongside household/spousal modeling).
- Start ages are treated as whole years.
- The clawback uses net income approximated as retirement income plus RRSP/RRIF withdrawals, computed in a single pass (it does not iteratively re-solve withdrawals to account for the clawback's effect on net income).
These simplifications are appropriate for a planning tool. For decisions about when to actually start your benefits, consult Service Canada or a financial planner.