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CPP Payments: How Much Will You Receive From Canada Pension Plan

Canada Pension Plan (CPP) benefits can make up a key portion of your income in retirement. Individuals receiving the maximum CPP payments at age 65 can expect to collect nearly $14,000 per year in benefits.

The amount of your CPP payments depends on two factors: how much you contributed, and how long you made contributions. Most don’t receive the maximum benefit. In fact, the average amount for new beneficiaries is just over $8,000 per year (as of March 2019).

CPP Payments 2019

The table below shows the monthly maximum CPP payment amounts for 2019, along with the average amount for new beneficiaries:

Type of pension or benefit Average amount for new beneficiaries (March 2019) Maximum payment amount (2019)
Retirement pension (at age 65) $679.16 $1,154.58
Disability benefit $980.24 $1,362.30
Survivor’s pension – younger than 65 $439.37 $626.63
Survivor’s pension – 65 and older $311.99 $692.75
Death benefit (one-time payment) $2,394.67 $2,500.00
Combined benefits
Combined survivor’s and retirement pension (at age 65) $869.86 $1,154.58
Combined survivor’s pension and disability benefit $1,096.12 $1,362.30

Now, you may not have a hot clue how much CPP you will receive in retirement, and that’s okay.

The good news is that the government does this calculation for you on an ongoing basis. This means that you can find out how much money the government would give you today, if you were already eligible to receive CPP. This information is available on your Canada Pension Plan Statement of Contribution. You can get your Statement of Contribution by logging into your My Service Canada Account, which – if you bank online with any of the major banks – is immediate.

Related: CRA My Account – How to check your tax information online

If you’d prefer to send your personal information by mail you can request a paper copy of your Statement of Contribution sent to you by calling 1.877.454.4051, or by printing out an Application for a Statement of Contributions from the Service Canada Website.

Note that the information available to you on your CPP Statement of Contribution may not reflect your actual CPP payments. That’s because it doesn’t factor in several variables that might affect the amount you’re entitled to receive (such as the child-rearing drop-out provision). The statement also assumes that you’re 65 today, which means that later years of higher or lower income that will affect the average lifetime earnings upon which your pension is based aren’t taken into consideration.

CPP is Indexed to Inflation

Canada Pension Plan (CPP) rate increases are calculated once a year using the Consumer Price Index (CPI). The increases come into effect each January, and are legislated so that benefits keep up with the cost of living. The rate increase is the percentage change from one 12-month period to the previous 12-month period.

CPP payments were increased by 2.3 percent in 2019, based on the average CPI from November 2017 to October 2018, divided by the average CPI from November 2016 to October 2017.

Note that if cost of living decreased over the 12-month period, the CPP payment amounts would not decrease, they’d stay at the same level as the previous year.

CPP Payment Dates

CPP payment dates are scheduled on a recurring basis a few days before the end of the month. This includes the CPP retirement pension and disability, children’s and survivor benefits. If you have signed up for direct deposit, payments will be automatically deposited in your bank account on these dates:

All CPP payment dates 2019

  • December 20, 2018
  • January 29, 2019
  • February 26, 2019
  • March 27, 2019
  • April 26, 2019
  • May 29, 2019
  • June 26, 2019
  • July 29, 2019
  • August 28, 2019
  • September 26, 2019
  • October 29, 2019
  • November 27, 2019
  • December 20, 2019

Why Don’t I Receive The CPP Maximum?

Only 6 percent of CPP recipients receive the maximum payment amount, according to Employment and Social Development Canada. The average recipient receives just 59 percent of the CPP maximum. With that in mind, it’s best to lower your CPP expectations when calculating your potential retirement income.

Why don’t more people receive the maximum? Well, because it requires 39 years of CPP contributions at the maximum level to get the biggest possible benefit in retirement. That means you need a salary that meets or exceeds the yearly maximum annual pensionable earnings threshold, which in 2019 is $57,400.

  • Year       YMPE
  • 2019      $57,400
  • 2018      $55,900
  • 2017      $55,300
  • 2016      $54,900
  • 2015      $53,600
  • 2014      $52,500
  • 2013      $51,100
  • 2012      $50,100
  • 2011      $48,300
  • 2010      $47,200

Plenty of variables affect your ability to earn the maximum CPP benefits. Maybe you joined the work force late, dropped out for a period of time, or retired early. Low income earners may not hit the YMPE level often enough to get the highest possible CPP retirement benefit. Business owners who choose to pay themselves dividends don’t need to contribute to CPP, but that means they won’t be eligible to receive benefits either.

When To Take CPP?

Perhaps the most common question about CPP is when to take it. The standard age to take CPP is at age 65. Indeed, Service Canada will proactively send out a notice a few months before your 65th birthday advising you to apply for CPP and giving you an estimate of your expected CPP payments.

But you can take a reduced CPP payment starting as early as age 60. If you do elect to take CPP early, you’ll receive 0.6 percent less for every month you receive it before age 65. That means, for those taking CPP at age 60, a reduction in their CPP payments by 36 percent. Reductions aside, there could be good reasons to take CPP early – namely if you need the income sooner than 65, or if you expect to have a reduced life expectancy.

Conversely, you can enhance your CPP payments by deferring your pension up until age 70. The advantage of waiting is you’ll receive a 0.7 percent increase for every month you defer CPP past age 65. Taking CPP at age 70 results in a 42 percent enhancement to your pension. The biggest reason to defer CPP is to protect against longevity risk – the risk of outliving your money. The trade-off is using your own personal savings to tide you over until the enhanced CPP payments kick-in later in life.

Note there is no benefit to defer CPP beyond age 70, so get your CPP application in on time to avoid delays.

Final Summary

CPP is a complicated system but one that is crucial to retirement planning for many Canadians. It’s important to understand how much CPP you will receive in retirement, and to know how difficult it is to receive the maximum CPP payments. Most CPP beneficiaries receive much less than the maximum, with the average being around 60 percent – so that’s good to know going into your retirement income planning.

You can find out an estimate of your CPP benefits by looking at your Statement of Contribution online at your My Service Canada Account, or request a paper copy by calling Service Canada.

CPP payments are indexed to inflation, with the latest increase going up by 2.3 percent. CPP payment dates are scheduled toward the end of every month and automatically deposited into your bank.

Finally, a big consideration is when to take CPP and how the payments fit into your retirement plan. Do you expect to live a long life? Will you work until age 65? Do you have sufficient personal savings to last until your CPP payments kick-in? Will you take CPP at age 65, or elect to take your pension earlier or later?

Readers: How does CPP fit into your retirement income plan?

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22 Comments

  1. sam on August 22, 2019 at 1:32 pm

    This is the most mind spinning article, why these important issues needs to be so complex for common person to understand.

  2. Frito on August 22, 2019 at 4:40 pm

    I read somewhere recently that if you don’t apply by 70 you can’t get ANY benefits at all. Is that correct?

    • Aaron on August 22, 2019 at 10:08 pm

      No that is not true. But you may forego benefits if you wait too long. For example, if you apply at 75 you won’t get 5 years of back payments. But nothing would prevent you from applying at 75.

      • Frito on August 23, 2019 at 8:52 am

        Thanks! Maybe it was articles posted when the changes were announced earlier this year that made comments about past problems they were trying to address that stuck in my head. It’s a constant battle trying to keep on top of everything!

  3. Frito on August 22, 2019 at 11:06 pm

    The thing that bothers me most is that at any moment any government can decide to change all the rules (ie change retirement age to 67) and people have to scramble to adjust their retirement calculations/expectations. I’m 59 and have pretty much decided to take CPP at 70 but who knows what the rules will be in 10 years?

    • Robb Engen on August 24, 2019 at 12:12 pm

      Hi Frito, typically these changes would be phased-in so it would not go into effect for 10 years or so. That’s what the Harper government did in the 2012 budget when it proposed that OAS benefits start at 67 instead of 65. This proposal wouldn’t go into effect until 2023 – although moot now because the federal liberals cancelled it.

      I can’t imagine a government alienating seniors by making immediate and sweeping changes to CPP or OAS.

  4. Monica on August 23, 2019 at 6:52 am

    Wondering if anyone has insight into the CPP survivor benefits? My husband & I are both 61, and plan to wait at least 2-3 more years before applying for CPP however, I have heard that if a person has not applied and God forbid, one spouse dies, it greatly affects the benefits for the surviving spouse?
    Thoughts??

    • Robb Engen on August 24, 2019 at 12:17 pm

      Hi Monica, that is not true. According to Service Canada:

      The amount you receive as a surviving spouse or common-law partner will depend on:

      -Whether you (the survivor) are younger or older than age 65
      -How much, and for how long, the deceased contributor has paid into the CPP

      If the survivor is under age 65 then he/she will receive a flat rate portion plus 37.5% of the contributor’s retirement pension.

      Another item of note is that you should apply as soon as possible after the contributor’s death. If you delay, you may lose benefits. The Canada Pension Plan can only make back payments for up to 12 months.

  5. Mike on August 23, 2019 at 9:38 am

    I tried to get through to Service Canada, gave up after 25 minutes on hold. Their website is also not incredibly user-friendly

    • Robb Engen on August 24, 2019 at 12:19 pm

      Hi Mike, yes – the complicated CPP system is further complicated by the lack of help on the phone and online.

  6. Diane on August 24, 2019 at 10:59 am

    Am I understanding this correctly? If one spouse passes away the other spouse gets the survivor’s pension plus their own CPP, but the maximum stays the same as the maximum for a single person. Example – Spouse 1 gets $950 CPP and spouse 2 gets $800 CPP, but if one of the spouses passes away, the other spouse can only get $1154.58 (2019 dollars), when I would think they should be entitled to the survivor’s pension (roughly $500+) and there own CPP ($800) for a total of $1,300.00+. Please tell me they would still get the $1,300+.

    • Robb Engen on August 24, 2019 at 12:23 pm

      Hi Diane, you are understanding it correctly – your benefit, even with a survivor’s pension, cannot exceed the CPP maximum for one individual. A baffling rule, but a rule nonetheless.

      Let’s say there’s a 3-4 year age difference between spouses and the older spouse dies at 65. In a situation like this, it could make sense for the surviving spouse to hold off on collecting his/her own CPP until 70 (thus getting more) and collecting the full survivor benefit up until then.

      • Diane on August 24, 2019 at 12:36 pm

        Thank you for the clarification. Wow! So if the first spouse waited until 70 to take their CPP (in an effort to leave more income for the other spouse), will the maximum be adjusted to reflect the 42% increase associated with waiting until 70 to start collecting CPP?

        • Robb Engen on August 24, 2019 at 1:46 pm

          Hi Diane, unfortunately – no.

          The 60% calculation for survivor benefits is done without regard to the adjustment for early or late start of CPP.

          So if someone is 65 with a CPP of $1,000 a month, the survivor benefit is $600/month. Now if the person waited until 70 for CPP, their benefit rises to $1,420 a month. But the survivor benefit is still $600/month.

          I asked Feed Vettese about this and he said:

          “This rule makes it a little less appealing to defer CPP since it doesn’t increase the survivor benefit, but it certainly isn’t a showstopper.”

          and,

          “There are a few more wrinkles but basically the survivor benefit is not an important reason to either defer CPP to 70 or to take it as early as possible. Besides the chances of dying between 60 and 70 are surprisingly small.”

  7. David on August 24, 2019 at 5:03 pm

    If someone decides to retire early, what effect will that have on their CPP? Will it be still advantageous to wait till 70 to collect if you are not creating a taxable income during the years 60-70? It seems CPP penalizes the early retired as they lose high earning years which reduces their pension amount. Do you know if the years 65 to 70 count towards your CPP earnings?

  8. christina on August 26, 2019 at 4:47 pm

    I had asked Dogger this (he is a past cpp employee/expert who hosts a thread on redflag deals and canadian money forum) and he has said it is still beneficial to defer as you are getting an extra percentage per year by deferring which offsets the amount taken off for drop out years. I imagine it would be highly individual though. I would post on his thread http://forums.redflagdeals.com/im-canada-pension-plan-cpp-expert-any-questions-1295017/

  9. Douglas Badger on August 28, 2019 at 8:34 am

    It’s good that this thread touches on the maximum survivor’s CPP pension. The ‘cap’ is not even known to most couples. Calculating the surviving spouse’s income becomes even more critical when you consider the departed spouse’s OAS stops and their private/employer pension is likely reduced by 40-50% for the survivor. We need a fuller discussion on the impact of being a surviving spouse!

  10. Christine Comrie on September 29, 2019 at 9:09 pm

    Is the September 26 CPP payment for the month of September or October?

  11. Sandy on September 30, 2019 at 10:32 am

    My husband retired at 55 and has not made any further payments to the CPP Plan – we are living and working abroad now (as non-residents). He was planning to wait to 65 to take the CPP because we don’t need the income right now. I’m interested in your comment about calculating CPP based on the best 39 vs. 35 years – what about the penalty for taking it 5 years early? How can we calculate the difference?

  12. Linda Isber on November 7, 2019 at 11:57 am

    Hi, I am 56 and have been living and working in the US since I was 30, therefor not contributing to CCP. (Still CDN, just a US resident, paying all taxes here) I was once told that I will not qualify to receive any CCP benefits as you need so many working years after turning 18, and I only have 12 at the max. If this is true, do I qualify to get my contributions returned at least?

  13. maria on November 13, 2019 at 10:22 pm

    Hi just want to know when the wife is retire at 66 and don’t get the full cpp payment because her husband still working and what is going to happen if husband retire at the age of 60 is wife gets full pension and husband will get what kind of cpp payment. husband has been contributes the maximum cpp deductions .

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