Should you take the CPP early?
Most people start to receive the CPP at age 65, but that doesn’t always have to be the case. Depending on your financial situation, it may make sense to take it at 60 or 70 or some time in between.
You can apply for the CPP anytime after your 60th birthday.
How much less you’ll get if take the CPP early
Your payments will decrease by 0.6% each month (7.2% per year) if you start getting the CPP before age 65. If you start at age 60, that means a maximum reduction of 36%. For an average monthly CPP payment at age 65 of $619.75, that means the average monthly amount at age 60 would be reduced to $396.64.
How much more you’ll get if you take the CPP later
Your payments will increase by 0.7% each month (8.4% per year) if you start getting the CPP after age 65. If you start at age 70, that means maximum increase of 42%. If the average monthly CPP payment at age 65 is $619.75, that means the average monthly amount at age 70 would increase to $880.04.
Why you’d consider taking the CPP at 60
- A forced retirement or similar situation that leaves you with no choice but to collect CPP to pay bills.
- If you believe you’ll have a shorter life expectancy because of illness or genetics, taking the CPP at age 60 may make good financial sense.
Why you’d consider taking the CPP at 70
If you’re still working from age 65 to 70, that’s really the only reason to wait until age 70. CPP earnings are taxable, so you’ll want to delay taking them while you have a full-time job to decrease your income and potential income tax.