Increase government pension benefits - 36% more !

The federal government lets seniors aged 65 or older delay the start of their Old Age Security pension (OAS) until they reach age 70.  If you do you could get 36% more OAS pension!

The Canada Pension Plan allows for a delayed start with a higher pension as well although not many people take advantage of this - 40% of CPP contributors started their pensions at age 60 and another 35% at age 65. Less than 1% of seniors start their CPP pensions at age 70.

Many retirees fear they will outlive their retirement savings.  One approach is to tap into your riskiest retirement savings first (i.e. your RRSPs), delay your CPP and OAS payments to maximize those government benefits for life - these are also inflation-protected to boot!

Withdrawing from your RRSP and delaying OAS payments will help avoid clawback in OAS benefits.  For every dollar of income you earn over a certain threshold ($70,954 in 2013), 15% is “clawed back” by the government. Earn more than $114,793 and you don’t get to keep any of your OAS pension at all!

Another way to avoid clawbacks is to lower your income by investing in products that distribute monthly payments as 'return of capital'.  Many private REITs distribute this tax advantaged income that will not count toward your income until all your investment is payed back (reducing the adjusted cost base of the investment) - this strategy could work for about 10 years.

We currently invest in Centurion Apartment REIT, Skyline Apartment REIT and Skyline Commercial REIT, all which pay monthly distributions as tax-advantaged return of capital.  If you want to reduce income but don't need the cash flow, you can participate in the REIT distribution reinvestment plan (DRIP).