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Insights & advice

Should you take the CPP early, at age 60?

July 2021 – 15 min read

Key takeaways

  • You can start taking the CPP as early as age 60 or as late as age 70

  • The earlier you begin receiving the CPP, the less you’ll receive each month, but you may potentially receive it for a longer period

  • You should consider your health, life expectancy, financial situation and plans for your retirement before deciding

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Should you take the CPP early, at age 60?

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.

What’s next?

Now that you know your options for beginning to receive CPP, why not meet with your financial advisor to:

  • Get a big picture of your potential retirement income and when it will be available

  • Determine how your retirement income will compare with your possible expenses and any gap between the money you need and the money you’ll have

The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.