Canadians will have to work two years longer before they can expect to collect their Old Age Security

Are you among the unlucky one who have to wait longer for their date to collecting Old Age Security ? Should you worry, and what does it mean to you retirement planning? As recently announced in
Economic Action Plan 2012 released last month which calls for the eligibility age of OAS
and the Guaranteed Income Supplement to increase from the age of 65 to 67, starting in April 2023. with full implementation by 2029. That’s the plan today. A lot could happen between now and then.

Canadians currently collecting benefits will not be affected. These changes will also not affect the Canada Pension Plan. If you are 54 or younger, You do need to save a bit more. You could probably put away another $50 to $60 a month and be covered for the difference.

Even before the changes, the maximum OAS benefit of $540.12 plus the maximum Canada Pension Plan of $986.67 per month could hardly support anything other than a very meagre retirement.

The maximum amount you can get per month from OAS is $540.12 but if individual net income is above $69,562, you must repay some of the OAS pension amount. The full pension is eliminated if you make more than $112,772.

As the table below demonstrates, average monthly benefits offer bare subsistence levels of income:

Recipient(s) OAS per month GIS per month Total OAS/GIS average benefits
Single Person $540.12 $732.36 $1,272.48 per month
$15,269.76 per year
Each Spouse $540.12 $485.61 $1,025.73 per month
$12,308.76 per year
(Source: Service Canada: Old Age Security Benefit Payment Rates, Jan-Mar 2012)



With shortage in the labour force and the latest changes to OAS, further enforce the hard reality that most Canadians working today will be still be in the labour force well past the old retirement age of 65.
 
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