Money matters News and updates

How to decide when to start your CPP

When is the best time to start receiving your Canadian Pension Plan (CPP)? That’s a question we often receive during our free retirement planning workshops. And it might be an item on your retirement planning checklist.

The answer: it depends!

We’ve put together some information to help you consider what’s best for you.

When can I start receiving CPP payments?

Canadian residents (outside Quebec –residents of Quebec have the Quebec Pension Plan or QPP) are able to take CPP:

  • As early as age 60, with a monthly reduction of 0.6 per cent
  • At age 65, with an unreduced amount
  • As late as age 70, with a monthly bonus of 0.7 per cent

There’s no benefit to waiting longer than age 70 to start receiving the pension.

How much CPP will I get?

The amount you receive will depend on what you paid into the plan while working. Up to eight years of your lowest earnings will be automatically excluded when your payments are calculated. Learn more about situations that can affect your pension amount.

Log in to your My Service Canada Account to get an estimate of your CPP payments.

Try the CPP/QPP income calculator from Sun Life (RTOERO’s group insurance partner) to see an estimate of your monthly payments depending on when you start your CPP.

Factors to consider when deciding when to start your CPP

You’ll likely take a look at all your income sources for retirement as part of your retirement planning. Most RTOERO members’ pension plans provide a bridge benefit to supplement retirement income until age 65. At age 65 (when you’re eligible for your unreduced CPP pension), the bridge benefit ends, and your pension is adjusted. If you take CPP earlier than 65, you’ll still receive the bridge benefit.

Here are some other considerations that may help you decide what to do:

  • Do you have other income sources and savings to sustain your
  • lifestyle?
  • Do you want to take care of immediate financial needs?
  • Might you benefit from investing your CPP payments to help grow your savings?
  • Do you plan to continue to work in retirement?
  • Are you healthy and expecting to have a long life?

Deciding when to start your CPP is one part of your overall financial plan for retirement. You can work with a financial planner to investigate different scenarios and make an informed decision based on your unique situation.