Old Age Security, or OAS, is a taxable retirement benefit offered to Canadians. In 2024, the maximum OAS benefit for those between the ages of 65 and 74 is $727.67. This number rises to $800.44 for those over the age of 75.
The exact OAS amount a retiree may get is based on factors such as income level, residency status, and the length of time the individual has lived in Canada over the age of 18.
How to maximize the OAS benefit?
Canadians looking to maximize the OAS benefit payout should primarily aim to meet residency requirements. For example, living in Canada for at least 40 years after turning 18 is essential. For individuals unable to meet the threshold, the OAS amount will be reduced on a pro-rated basis.
Canadians can also delay OAS payments to receive a higher monthly payout in later years. Once you reach the age of 65, the OAS increases by 0.6% for every month it is deferred, which can add up to a substantial amount over time.
Now, it’s evident that even if you receive the maximum OAS benefit of $727.67, it is not sufficient for retirees to lead a comfortable life. Moreover, if we include the maximum amount received by the Canada Pension Plan, the maximum monthly retirement benefit is close to $2,100.
These retirement benefits might not cover all living expenses in high-cost regions such as Toronto and Vancouver, highlighting the need for additional investments and savings.
Supplement the OAS with dividend stocks
Supplementing the OAS and CPP retirement benefits by building a diverse investment portfolio that includes stocks, bonds, gold, real estate, and even cryptocurrency is essential. A diversified portfolio can help Canadians create additional income streams in retirement and boost cash flows over time.
One low-cost way to begin a passive-income stream is to invest in quality dividend stocks with a growing payout. One such TSX dividend stock is Brookfield Infrastructure Partners (TSX:BIP.UN). With a market cap of $22.6 billion, Brookfield pays shareholders a forward yield of 4.6%, given its annual dividend of US$1.62 per share.
Notably, Brookfield has increased its dividend per share from US$0.47 in February 2008, indicating a compounded annual growth rate of 8%. Analysts tracking BIP expect the company to end 2025 with adjusted funds from operations per share of US$2.61, up from US$2.20 per share in 2022. So, investors can expect additional dividend hikes in the next 12 months.
Brookfield Infrastructure is a diversified giant with businesses across sectors such as utilities, transportation, midstream, and data centers. In the third quarter (Q3) of 2024, Brookfield advanced its capital backlog and delivered on its capital-recycling objectives.
Its funds from operations rose by 7% year over year to US$599 million, driven by contributions from new investments completed last year and three accretive acquisitions it closed in 2024. It also benefitted from organic growth, capturing annual rate increases from inflation, stronger transportation volumes, and the commissioning of more than US$1 billion from its capital backlog.
Brookfield ended Q3 with more than US$4 billion in incremental organic growth opportunities related to the projects it is advancing. Further, it completed US$3 billion in non-recourse financings in Q3, with the goal of efficiently financing its business by extending maturities and reducing the cost of capital.
