Planning for retirement is a significant financial decision, and one of the most important choices you'll face is when to start your Canada Pension Plan (CPP) benefits. Whether you decide to take benefits early, wait until the traditional retirement age, or delay them further, each choice has its own implications.
Starting Benefits Before Age 65
If you begin receiving your CPP/QPP benefits before age 65, you’ll receive a smaller monthly amount but for a longer period. The government reduces the benefit by 0.6% for each month you start benefits before age 65—equating to a 7.2% reduction per year. For example, if you start at age 60, your benefit will be around 36% lower than if you had waited until age 65.
While your monthly payments will be smaller, this may be a good option if you need the funds to cover living expenses or have a health condition that could impact your life expectancy. For many, the security of starting benefits sooner outweighs the potential financial advantage of delaying.
Taking Benefits at 65
The age of 65 is traditionally the standard age for beginning CPP benefits. The monthly payment at this age is seen as the baseline, with no reductions or increases applied. For those who have structured their retirement planning around receiving these payments at 65, this option may align with their needs and expectations. In 2024, the maximum monthly CPP benefit at age 65 is $1,364.60, and the average benefit is $816.52.
Delaying Benefits Beyond 65
Delaying CPP benefits past age 65 can significantly increase your monthly income in retirement. For each month you delay beyond age 65, your payment increases by 0.7%, or 8.4% per year. If you wait until age 70, your monthly benefit will be 42% higher than if you had started receiving payments at 65.
The key advantage to delaying is that the longer you wait, the higher your monthly payments will be for the rest of your life. While delaying might not be ideal if you need income sooner, it can be an effective strategy if you continue working past age 65 or have other income sources to rely on.
Which Option Is Right for You?
When deciding when to start your CPP benefits, there are multiple factors to consider, including your health, financial needs, and life expectancy. If you're unsure which option best suits your retirement income strategy, it may be helpful to consult us to get personalized advice.
Here’s a breakdown of the estimated monthly benefits based on when you start your CPP/QPP:
Monthly payment starting before 65:
Age | 60 | 61 | 62 | 63 | 64 | 65 |
$ | $640 | $712 | $784 | $856 | $928 | $1,000 |
Monthly payment if deferred to later age:
Age | 65 | 66 | 67 | 68 | 69 | 70 |
$ | $1,000 | $1,084 | $1,168 | $1,252 | $1,336 | $1,420 |
When it’s time to decide when to start your CPP benefits, reach out to us. The timing often depends on your overall retirement income strategy.
How can you find out what your CPP payment will be at age 65?
You can easily access your pension and retirement information through your My Service Canada Account (MSCA): My Service Canada Account.
If you haven’t logged in before, you’ll first need to register and create your account. Once you’re signed in, select "Canada Pension Plan/Old Age Security" from the MSCA welcome page. Under "View My Payments," you’ll be able to see the estimated CPP amounts you are eligible to receive at ages 60, 65, and 70.
We look forward to discussing this with you when the time is right.
Your Creed Capital Management Team
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