Life Expectancy and the OAS Postponement Issue

According to a Canadian Institute of Actuaries (CIA) study published by advisor.ca, the life expectancy of a 60-year-old male today has increased by 2.9 years (from 24.4 to 27.3 years), while the life expectancy of a 60-year-old female has increased by 2.7 years (from 26.7 years to 29.4 years).

Does this affect the OAS postponement decision? Knowledge Bureau’s research team went to work to interpret this: when you consider that a retiring male should expect to live to 87 (60 + 27.3) and a female should expect to live to 89 (60 + 29.4) and the recovery period for deferred OAS is 14 years, it would then appear that on average both males and females will benefit from deferring OAS to age 70.

Check it out with a free trial of Knowledge Bureau’s Tax Efficient Retirement Income Planner, and the case studies in the Tax Efficient Retirement Income Planning course.