Best age to take CPP in Canada (60 vs 65 vs 70)

If you’re approaching retirement, one of the most important financial decisions you’ll make is when to start your Canada Pension Plan (CPP).

You can begin receiving CPP as early as age 60 or delay payments until age 70. The timing affects your monthly income for life, so it’s important to understand how the decision works.

How CPP Payments Change by Age

Your CPP benefit is adjusted depending on when you start:

• Age 60: 36% lower than your full benefit
• Age 65: Full benefit
• Age 70: 42% higher than your full benefit

For example, if your CPP at age 65 would be $1,000 per month:

• Age 60: about $640/month
• Age 65: $1,000/month
• Age 70: about $1,420/month

These increases are permanent and indexed to inflation.

When Taking CPP at 60 May Make Sense

Starting early may be appropriate if:

• You need income right away
• You have stopped working and have limited savings
• You have health concerns or a shorter life expectancy
• You want to reduce withdrawals from investments during market downturns

The trade-off is permanently lower lifetime income.

When Delaying CPP to 70 May Be Better

Delaying CPP often makes sense if:

• You expect to live into your late 80s or longer
• You have other income sources (work, savings, or a pension)
• You want higher guaranteed income later in retirement
• You are concerned about outliving your savings

For many Canadians, the break-even point between starting at 65 and delaying to 70 is around age 82 to 84.

Working While Receiving CPP

You can work and receive CPP at the same time.

If you are under 65 and working:

• You must continue contributing to CPP
• These contributions increase your benefit through the Post-Retirement Benefit (PRB)

After age 65, contributions become optional.

How CPP Fits Into Your Retirement Income Plan

CPP timing should be coordinated with your overall retirement strategy, including:

• Old Age Security (OAS) eligibility and potential clawback
• RRSP or RRIF withdrawals
• Your tax bracket in your 60s versus your 70s
• Other pensions or investment income

Some retirees choose to draw down RRSP savings earlier while delaying CPP to increase guaranteed lifetime income.

Next Step

If you’re unsure when to start CPP, it can help to see how the decision fits into your full retirement income plan.

Speaking with a licensed Canadian retirement professional can help you evaluate your options based on your personal situation.

Disclaimer

This article is for educational purposes only and does not provide financial advice. Please consult a qualified professional for personalized guidance.