CPP: When Should Canadians Start Taking Canada Pension Plan?
2024-05-08
Educational content only. Rules and tax laws change over time; verify official sources.
Taking CPP at 60 vs 70 means a 72% difference in monthly payments. Here's how to decide the optimal age for you.
CPP Payment Amounts (2024)
- At 60: 36% reduction = ~$830/month max
- At 65: Standard amount = ~$1,300/month max
- At 70: 42% increase = ~$1,850/month max
The difference between 60 and 70 is 72% more per month - for life!
The Math: Early vs Late
Taking CPP at 60 vs 65:
- You get 60 extra months of payments ($830 × 60 = $49,800)
- But you receive $470 less per month forever
- Break-even: age 74-75
Taking CPP at 70 vs 65:
- You miss 60 months of payments ($1,300 × 60 = $78,000)
- But you receive $550 more per month forever
- Break-even: age 81-82
When to Take CPP Early (60-64)
- Poor health: If you don't expect to live past mid-70s
- Need the income: No other sources to bridge the gap
- Can invest it: If you'd invest and earn >6%+ returns
- Spouse has strong CPP: You're the lower earner
When to Delay CPP (66-70)
- Good health: Family history of longevity
- Other income: RRSP, TFSA, pension to bridge
- Want guaranteed income: CPP is inflation-indexed for life
- Spouse with low CPP: Maximize survivor benefits
The Optimal Strategy for Most
For healthy Canadians with some savings:
- Draw down RRSP from 65-70 (while in lower tax bracket)
- Start CPP at 70 for maximum guaranteed income
- TFSA stays intact as emergency fund
This maximizes lifetime income and minimizes taxes.
Don't Forget OAS
Old Age Security is separate from CPP:
- Starts at 65 (can delay to 70 for 36% increase)
- Clawed back if income exceeds ~$87,000
- RRSP withdrawals count as income for clawback
Plan Your CPP Strategy
Use our calculator to model different CPP timing scenarios.
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