3 Reasons To Take CPP At Age 60

3 Reasons To Take CPP At Age 60

It’s generally not wise to voluntarily take up to a 36 percent reduction in income, especially if that income is paid for life. But that’s exactly what happens to retirees who elect to take CPP at age 60.

I’m a big proponent of delaying CPP up to age 70 to help protect against longevity risk and enhance your monthly pension benefit in retirement. Only a small percentage of retirees do so, however, as many prefer to take CPP as soon as they’re eligible.

Why Take CPP at Age 60?

Taking CPP early may not be the most optimal financial decision but there are a few cases where it can make sense. Here are three reasons to take CPP at age 60:

1). You Need to Eat and Pay the Bills

Maybe you were laid off in the latter stages of your career and struggled to return to the workforce, or you had to retire early due to poor physical health. Whatever the case, you’re about to turn 60 and need to build an income stream.

Simply put, without sufficient income or personal savings to carry you through your 60s you may have no choice but to take CPP as early as possible.

The earliest you can take your CPP benefits is one month after your 60th birthday. Doing so means a 36 percent permanent reduction in your monthly benefit, but that’s still money in your pocket today.

The maximum payment amount for taking CPP at age 65 is $14,455 per year (2021). That amount would be reduced to $9,244.80 per year if you elect to take CPP at 60.

Taking that extra $9,200 at age 60 could mean the difference between meeting your retirement income goals or not, and that needs to be weighed against having to wait five years for an extra $5,000 (or so) a year.

Finally, if you’re sure that you will be eligible for the Guaranteed Income Supplement (GIS) once you reach 65, it’s generally a good idea to take CPP at age 60.

2). You Have a Reduced Life Expectancy

The biggest mystery in retirement planning is that we don’t know how long our money needs to last because we don’t know when we’ll die.

By age 60 you may have some idea. Whether it’s genetics, poor health, or the results from your 23andMe test, if you have any reason to suspect a shortened life expectancy then taking CPP at 60 can make good financial sense.

Understand your breakeven point for taking CPP early. For instance, you’ll be ahead financially if you take CPP at age 60 and don’t live past age 69. If you make it to 85, then the optimal age to take CPP is 69.

For context, a 60-year-old Canadian, on average, can expect to live another 25 years. So if you’re playing the averages then it’s best to delay CPP.

Lastly, if you’re thinking about taking CPP early because of poor health, you should apply for a CPP disability pension instead. If approved, the CPP disability amount will always be higher than a retirement pension and it will convert to a full retirement pension at 65.

3.) You Have No Contributions from age 55 to 60

Did you retire at age 55? Or maybe leave your career as a salaried employee to start a business in your fifties? Business owners can choose to pay themselves dividends rather than a salary, and therefore would not have to make CPP contributions. How do those years of zero contributions affect your CPP retirement benefit?

When you take CPP at 60, your benefits are based on your best 35 years of earnings, rather than your best 39 years of earnings if you were to take it at 65. Depending on your earnings from age 18 to 54, your CPP payments might still be close to the maximum if you take it at age 60, but it will definitely be reduced if you wait until age 65.

Two reasons not to take CPP at age 60

Forget the notion of taking CPP early and investing. This idea, likely brought to you by your friendly neighbourhood financial sales person advisor, sounds compelling in theory but can be a disaster in practice.

Remember, the CPP is taxable income so you won’t be able to invest the full amount unless it’s in an RRSP. Then take investment fees into account and consider how much will you need to earn to beat the guaranteed 7.2 percent return that comes with delaying CPP by a year?

No, it’s better to defer and receive a larger pension that’s guaranteed and inflation protected for life.

Finally, if you’re concerned about whether CPP will be around when it’s time to collect, or whether the government of the day will raid the fund to pay its debts, let’s put that idea to rest.

The Canada Pension Plan Investment Board (CPPIB) is independent of the CPP and run at arms length of federal and provincial governments. The fund has been audited by an independent actuary and found to be sustainable for at least the next 75 years (using conservative projections).

CPP will be there for you in retirement. The question is when do you plan to collect your benefits?

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  1. Dale Roberts on June 7, 2019 at 4:42 am

    Great post Robb. I am right in the target age decision zone, and my personal scenario crosses the situations you outline. Some good food for thought and insights in this post.

    “Semi-retired” at 56, turning 57 soon. Thing is I have no idea what my life at age 60 will look like. I would imagine though that I will still be in a lower to modest income stage, and I’ll likely take early CPP.

    Also there’s that value of money (and the experiences it will bring) with respect to age. I’d like those experiences with family and friends while I am still hopefully healthy.

    Thanks again for the additional input.

    • Dave Berswick on March 6, 2020 at 11:07 am

      I am currently getting 2000
      00 a month on WSIB. IF I don’t qualify for CAN Pension Disability should I take my CPP early at 60 or hold off till 65. My rent is subsided.

    • Stephen Moir on October 2, 2020 at 8:36 am

      great article. Excellent comments!

    • Phil on April 24, 2021 at 12:12 pm

      I’m thinking the same
      And same age

      Want to have holidays etc
      Seen relatives with money in their seventies
      Do nothing with it

  2. Sandy Fry on June 7, 2019 at 5:21 am

    Hi! In my case, I receive a survivors pension. My pension plus his would place me at the maxium by the age of 62 as they combine both only up to the max. So if someone has lost their spouse they should look into when this amount will be reached.

    • Alexander on June 25, 2019 at 5:58 pm

      I need more info about reductions to Cpp because of not contributing after age 55.

      • Sandy Fry on January 27, 2021 at 8:36 pm

        Thank you Christine. Definitely not the answer I received from Service Canada. I will definitely look into it further.

    • Christine Williston - Money Coach on June 26, 2019 at 12:37 am

      Hi Sandy,

      CPP with a survivors pension can be very complex. I’d recommend that you get some very good advice before you elect to take your own pension.

      Be warned that you are unlikely to get that good advice from Service Canada. I have seen the information that they have sent people and it is definitely not enough to give them guidance on when they should take their pension.

      The maximum combined CPP and Survivors Pension is based on when you take your own pension. Currently the maximum that a person can receive at 65 is $1154.58. This is also the maximum a person could receive as a combined CPP and Survivor rate. If the same person decided to take their CPP at 60 the maximum they could receive combined would be $738.93 but if they waited till age 70 they would receive $1,639.50.

      While most people who wait until 70 to take CPP receive nothing until that point, people receiving a Survivors Pension will get that smaller pension (which will increase at the survivors age 65) right up to age 70 and then they can start to receive the maximum benefit available.

      If you are thinking of taking your own CPP at 62, I would definitely revisit your decision.

      • David D on September 13, 2019 at 11:06 am

        Christine Williston, In most cases the recalculation of Survivor Benefit (while not taking your own CPP) results in a DECREASE at age 65, but if the deceased was nearly a maximum contributor, there can be a small increase.
        Nevertheless, your advice to get a proper calculation is very wise.
        Doug Runchey is a kind and generous blogger who will, for a small fee, do your scenario calculations for you.

        • Christine Williston on September 13, 2019 at 7:00 pm

          Thanks David D – good to know.

          In the limited number of cases I’ve dealt with I’ve only seen it increase – but this may reflect the types of client I tend to work with.

          When I come across people with survivors pensions who are wondering about collecting their own CPP, I send them to Doug.

          Having DR Pensions give you an actual answer to a very complex question could very well be the BEST MONEY YOU EVER SPENT!

      • Sandra Fry on June 25, 2020 at 8:52 am

        Thank you so much for taking the time to explain how this works. Definitely not the answer I received from Service Canada. Sorry, just came upon this now.

    • May Loo on May 9, 2020 at 6:33 pm

      I am on provincial social assistance. I recently turned 60, and now the government is forcing me to look at taking CPP (early retirement). What do I do?

    • Shelley Morrish-Paradis on January 27, 2021 at 11:23 am

      I was in the same boat and made perfect sense for me to take it at 60

  3. Michael James on June 7, 2019 at 6:24 am

    I think your point #3 is the same no matter when you had years of zero contribution. However, when I’ve worked out the numbers, it’s usually still better to delay CPP if you’ve had several zero-contribution years, even if it means somewhat of a reduction in benefits. In some cases, what tips the scale is that before you take CPP, it rises with the average industrial wage, which is usually a little faster than inflation. So, taking CPP early leads to a more than 36% reduction.

    • Pierre on January 13, 2021 at 2:21 pm

      I am on ODSP and 57. I make just over $1100 per month and want to know if I can get OAS and a supplement, or am I stuck on ODSP until I turn 60, as it’s tough just floating my head above water now. I am single, so can I get both to get myself better with oas and the supplement or am I stuck until then?

      • lorna Anne ward on March 28, 2021 at 4:33 pm

        Hi Pierre
        OAS and GIS are not payable till you are 65

      • Darren Theoret on April 23, 2021 at 12:12 pm

        You should check with ODSP about collecting CPP at 60. I think they may deduct it from your monthly ODSP check and you’d be no further ahead.

        • Kim Peterson on May 4, 2021 at 8:28 pm

          ODSP you can have a small income, just have to fill out the paper on it, anyone on ODSP would benefit from grabbing whate

      • Kim Peterson on May 4, 2021 at 8:30 pm

        Go ahead and collect at 60 ,just call your ODSP support agent and declare the CPP as income, since you are allowed to earn a small income

  4. John on June 7, 2019 at 6:28 am

    Is there a risk calculation for a couple where both have contributed near 40 years to CPP? One a few years more, and one a few years less. That can’t be too uncommon anymore. We’re approaching the 65 mark, haven’t taken CPP, but when one dies (no chronic illness at this time) those forced savings default to the GoC. There is no survivor benefit for those that draw a single full CPP. Otherwise, we are financially secure, where we had hoped to be at this time.

    • John on June 7, 2019 at 6:31 am

      Michael James. Your insight into the rate of increase for CPP is news to me. Thank you.

  5. Cheryl on June 7, 2019 at 9:29 am

    I’m single and will be 60 next year. For the past 10 years I’ve been looking unsuccessfully for a full time job but it’s really hard for older people to find work. I have to take whatever comes along for some income, which is usually maternity leave coverage or other shorter term contracts. I had a really good job for a year’s contract. They asked me to stay another 6 months, and I would have stayed forever if they’d asked me, but unfortunately their restructuring was complete and the work was drying up. Again I’m on EI while looking for work. My CPP benefits at age 60 will be $375/month but that could be the difference between eating and rent. If I happen to find a job I could see delaying it, and if I wait till 65 CPP will be $200/month more. I’m pretty sure I will qualify for GIS. Every little bit helps! I do have savings and monthly dividend income which I’m not sure will push me out of the GIS qualification.

    • Don on June 26, 2019 at 1:21 pm

      My layman’s 2 cents: Take it at 60. At 65 you will qualify, including CPP + OAS, for a monthly payment of approx. $ 1600 per month. Make sure your savings and possibly the source of dividends are in Tax Free savings accounts, that way they don’t count in the GIC calculation. Mind you the dividends may reduce your payment. I think $1 for every $ 2 earned/dividend.

      • Jeanette on May 28, 2020 at 3:17 pm

        I would like to part time retire how many hours can I work without it effecting my CPP?

        • DMAN on June 26, 2020 at 5:25 am

          I am 63. I am a full time employee with a good salary. I took my CPP at age 60.
          Your CPP will not be affected if you still work. I took my CPP early because the amount of money to be made up from age 65 cpp amount will take time to catch up to what I have already made. Spend it while you can. You can’t take it with you if you go bye bye.

    • Deb on February 2, 2020 at 6:58 pm

      My concern is if my spouse who has worked for 40 years dies before he applies for cpp. Will I get a portion of what would have been his cpp pension. Or as people have told me if he hasn’t applied and receiving I would get nothing. Thanks

      • Rose on February 28, 2020 at 2:59 pm

        If your husband passes you would contact service canada and they will process your widows pension. The amount depends on how much he paid into and your age. You would receive approximately 60% of his.

        • Sandy on June 11, 2021 at 2:09 pm

          Incorrect Rose, unless the husband has started to collect his own cpp, there is only a $2500 lump sum survivor benefit Payable!

          • gru on June 27, 2021 at 7:47 am

            Sandy that would only be correct IF the surviving partner was already eligible for max CPP which is unlikely as few people do. You don’t have to be collecting for the other person to be eligible for some survivor benefit. If I die at 58, my wife will still receive some of my CPP. The maximum anyone can receive is one full regular or disability CPP.

  6. Frank Castelano on June 7, 2019 at 12:18 pm

    I just took my C.P.P. last month which is $855.24 per month. My wife and I retired as she is 2 years younger than me and can’t get early C.P.P. yet.

    We were taught at a young age to have good work ethic and save, keep saving. This helped over the years as we have spousal and regular RRSP’s balance of $800,000. The interest rates are not bad 3.2% to 3.65% for 7 and 10 years at our credit unions.

    We have other laddered GIC’s from non-registered accounts in $10,000 amounts 1-6 years as well. All this brings in $38,000 a year but we easily live off of $20,000 a year. This extra $18,000 a year will tie us over and increase our savings until my wife gets her early C.P.P. which is $767.34 a month in 2 years.

    The biggest factor I would say that help us besides saving and compound interest, tax refunds from RRSP’s is us being debt free since 1999. Avoiding the temptation buying now and paying later with paying interest for the rest of your lives is a huge impact why Canadians have much less to not much savings. This is a good article about early C.P.P. which many Canadians may not even know exists.

    • cg on June 13, 2020 at 12:28 pm

      RRSP’s of $800,000 it will take you 16 years by withdrawing $50,000 per year. Better get going withdrawing money and enjoying life

  7. Bob Lin on June 7, 2019 at 9:51 pm

    For me and my wife, our CPP is icing on the cake. We’ll be taking it at age 60 to help fund our extensive travel plans, instead of using savings/investments of the same amount. Using conservative estimates our crossover point is around age 84. Meaning that in every year between age 60 and 84 we expect to be better off starting CCP at 60 vs any time later. That’s up to 24 years better off vs probably no more than 5 to 10 years better off if we start CPP it at age 65.

    • Steve Bridge on June 26, 2019 at 7:32 am

      Bob Lin, I would seriously reconsider your decision.

      The crossover point is much lower than 84 (not sure who told you that, but it depends on the individual and your lifetime contributions).

      Very likely, the best financial outcome for your situation would be for you both to delay CPP until 70 and draw down your taxable accounts in the meantime (RRSPs/LIRAs/etc.). This is something that most commission-based advisors (i.e. salespeople) will not recommend you do, but it allows you to withdraw these monies at a lower tax rate (because you don’t have CPP or OAS adding to taxable income).

      Delaying also helps with estate tax planning (less in taxable accounts).

      If you have health issues and a reduced life expectancy, as Robb pointed out, that is a different matter, but otherwise, do the research, run all the numbers (or get advice from a non-commissioned/no sales/advice-only/fee-only/fiduciary financial advisor.

      Good luck.


      • Mike Abraham on June 26, 2019 at 9:12 am

        the crossover point should be age 74. Using the numbers provided, one is getting $5000 less (taking CPP at 60) but for 5 more years. That’s $45000. If taking at 65 you get $5000 more per year but will then take 9 years to make up that $45000. This has been the simple calculation I’ve observed (unless I am making some error) since I was in my 20’s. I plan to retire from my FT job at 52, collect $40 k in company pension and take CPP at 60. I will have many years of non-contribution to CPP hence much better to have the accrual based on the lower contributory period. Plus CPP and company pension CPI increases are stabl and secure and MUCH better than actual wage increase. Retire early and live life, stop saving money for your funeral !!

        • Bob Lin on June 30, 2019 at 10:27 am

          @Mike Abraham:
          “the crossover point should be age 74”

          Regardless of when you intend starting your CPP, I think it would be worth looking at the crossover point again. If you will have to draw from investments between age 60 and when you commence CPP, then you should include in your calculations the lost gains on your investments (even if that’s just 3% on GICs), and don’t forget that the gains or income from those investments will continue even after you start your CPP. You will find that the crossover point moves further into the future as your expected returns increase. This more comprehensive analysis MAY have some bearing on the decision you ultimately make.

        • Mark B. on December 25, 2019 at 11:53 am

          Re: Bob Lin and other situations for “cross over” or break even. It’s a bit more complicated. While the basic concepts are covered, your tax bracket can be a big factor, as can your investment opportunities. I am approaching the magic ’60’ and have built my own model. If you are in a max tax bracket at 60 and it might be lower when you receive CPP, you may be better off waiting. If you have other investment income, this also factors in to the after-tax calculation. A model that takes into account your tax bracket after triggering CPP and your other needs (ie will you use the money or invest it, CPP index projections, investment options to generate income from early CPP (after tax), etc in a full model). That said, for the average person, 75’ish is probably a good cross-over estimate.

          As a final comment, I built a really complex model that takes all the details into account, BUT you can never fully account for job loss, market ‘melt downs’, death of yourself or a loved one, etc. So at the end of the day, do what will enrich your life and really matters to you – don’t get too caught up in the details…. :-).

      • Marche T on October 28, 2020 at 8:06 pm

        I don’t agree. What if you take them (say husband and wife) at 70 years of age and BOOM you both die one after the other. That money is down the tube. SO TAKE IT AT 60!!!!1 JUST DO IT.. Like person said in here, it’s ICING on the cake but for SOME IT’S THE WHOLE CAKE! 🙂

  8. tonyperry on June 8, 2019 at 6:33 am

    I have been told that my GIS will arrive automatically. i find that hard to believe. Where and when do I apply for that. Any help would be appreciated. Thanks

    • Mike Abraham on June 26, 2019 at 9:15 am

      oops, I had a typo in my comment. |It would be $9000 for the first 5 years at age 60, then $5000 more per year at 65. The $45000 differential is correct still and crossover should be age 74.

    • Don on June 26, 2019 at 1:31 pm

      Hi Tony, You apply for GIC on the same form that you submit when you apply for OAS.
      There is a question ” do you want to apply for GIC’ ? You will have to sign that you agree that they check your income tax each year with Rev. Canada.
      Note: You also have to file income tax each year.

  9. Norm Robidoux on June 8, 2019 at 12:00 pm

    Hi Robb.
    Your sarcasm about the sales person (crossed out, followed by advisor misses the point. Why confuse the issue.
    An advisor would confirm the very points you make through a thoughtful conversation.
    Sounds kind of seld-righteous and paints all advisors with a brush which is all too common I’m the media today. Toi can do better here.
    For the raft, you do bring some very good points.
    As an advisor, I take great pains to get to know my clients and to help them better understand their situation and options.
    A sales person pushes a biased opinion. A financial advisor confirms the situations and desires goals , the educated and makes a recommendation with the possible outcomes clearly stated.
    All the best!

  10. Alice on June 8, 2019 at 1:58 pm

    Didn’t know that when you take CPP at age 60 it is based on your best 35 years of earnings rather than 39.
    What if you take CPP between 60 & 65, such as at 61 or 62?

    • Mike Abraham on June 26, 2019 at 9:25 am

      yup – that is key….reducing your contributory amortization period. For those of us who stop contributing to CPP at age 55 or earlier, it is often better to take the benefit at 60 due to the reduced contribution period used in the benefit calculation. Same applies to any age between 60-65…just interpolate the values.

  11. Earl Kanokeve on June 10, 2019 at 12:45 pm

    People that at 60 or over that can be eligible for C.P.P. benefits should be voluntarily given a choice of taking the pension or getting it’s lump sum value.

    For example, my cousin is a CA and he has been contributing for 45 years at top, maximum pay. He figured out that his C.P.P. is worth about $213,644.26. If this is actually true, early C.P.P. maximum is only $738 a month. Yes, there is an actual annual increase of 1.6%, 2% etc. but even in conservative GIC’s such as 3.3% 10 year at Westoba interest is $7,050 or $588 a month. For only a loss of $150 a month, Canadian government/CPP gets to keep $213,644.26.

    If a C.P.P. eligible benefit person does not need that money to live on having more than enough other financial resources and can actually compound that for 10 years and take it out at 70 years old, it would be worth $295,593.20 and at 3.3% annual interest get $9,754.57 or $812.88 a month and keep the almost $296,000 capital or principal.

    If C.P.P. were to give a 2.0% annual increase for 10 years, it would be $917.41 per month which is only $104.53 compared to $812.88 per month more but have no capital of almost $296,000 at the same age of 70. I just want to emphasize this should be voluntary and people should make their own choice. I think people should know that this all or nothing choice by C.P.P. may not be the best choice for all Canadians. I have a feeling that many people did not think about this with C.P.P.

    • Mike Abraham on December 26, 2019 at 3:06 pm

      Ya then what happens when the guy taking the lump sum blows it all and has to live another 20 years??? Welfare? Crime? Back to find a job at 75 years old? The purpose of cpp is forced savings to pay a pension for life so as not to put undue strain on public resources.

    • andrew corbett on March 29, 2020 at 8:51 pm

      I agree. It’s pretty much mandatory insurance, not a pension. Whatever we put in, we should get out plus the interest. Why not a mandatory LIRA instead?

  12. Doug Patrizeau on June 10, 2019 at 6:02 pm

    This is a great article to inform people that C.P.P. has to be very carefully considering of when it makes sense to take it. We are much better off than most Canadians as we have $1.32 million RRIF that will last us decades. We are in our mid 60’s.

    The income from our RRIF pays all our expenses, taxes, cost of living and we still are able to save $2,500 a month to put towards our TFSA’s and non-registered ETF’s, index funds, GIC’s, REIT’s etc.

    We will for sure take our C.P.P at age 70 unless something drastic happens in our lives.

  13. Cindy Taylor on June 12, 2019 at 2:40 pm

    I am going to have to take my C.P.P. at 60 or just after 60. The reason is I could never own a house because I could never afford it.

    I could not save alot but I tired my best every week from 1980 when I got my first job at $8.35 an hour 39 years ago. The good news I have $400,000 in RRSP’s and $75,000 in TFSA’s and reach 60 in 4 months. The bad news I will be moving to a cheaper place to save rent paying $500 less a month in Nova Scotia.

    The early C.P.P. of $702.44 a month will help me alot as a single gal.

    • jim on May 21, 2020 at 5:05 pm

      Congrats Cindy for your planning. I have some acquaintances in your situation and decided to “retire” early and use up their nest egg well before 60 and then rely on CPP, OAS, GIS etc to live. Deciding to maximise their draw from the government. Not something I support. I read in Australia a game is to withdraw your money from the national plan and then be “poor” and get the maximum assistance possible. Loopholes that get exploited and shouldn’t be.

  14. Fred on June 17, 2019 at 2:55 pm

    I will not be delaying my CPP to 70 as my wife and will be receiving Max CPP at age 65. There has been a lot of talk about deferring to 70. How would you feel about depleting your Rifs, then the day after you take CPP your wife dies, That inflated Cpp for delaying is gone and so is OAS. That $2000 a month you were counting on. No one knows your end date . CPP main focus is to keep the plan sustainable not necessarily keep you happy in retirement.

    • Steve Bridge on June 26, 2019 at 7:38 am

      Fred, you’ve minimized tax and made the best decision based on the information at hand (i.e. expecting to live until a normal age).

      What if your wife doesn’t die the day after she turns 70? Then you’ve made a decision that impacts your income (and gives you less money) the rest of your life.

      Make your decision based on the most likely scenario (and also based on your individual situation. If you meet Robb’s points of #1 and #2 above then that is a different situation).

      Good luck.


      • Fred on June 26, 2019 at 8:55 am

        Hi Steve
        Your decision when to take CPP is not so simple to simply to say that most people should delay CPP to age 70 when half the population will not reach the age 80. I do not like those odds. Depending at what tax bracket you are in could dictate how much to remove from my RIF annually to keep in the lowest tax bracket.

        • Mike Abraham on June 26, 2019 at 9:22 am

          Plus the reality is that for the few extra $$$ you get later in life, you could be enjoying $$ right now. Why some people ant to die with a million $ in the bank is beyond me !!

          • May on October 22, 2020 at 2:02 pm

            I agree. ! I am going to be 62 next month and have considered early retirement. Some people say don’t and others say do. I have a musical pension plan that wants to buy me out. I’m 22,000 dollars in debt which acccounts for 575. Of my income now. I want to take the payment so I can clear any debt. It will still leave me with a pension of 2400. Which I think is pretty decent. My health is not the greatest and I would be surprised if I were to live past 70. But for five of those years I will still be able to eat and have a roof over my head . That’s about it. But what more will I need. ?i want to live my life now. Enjoy it. Paying my debts would actually free me to have a bit of fun in this life as I would only drop 200 until I’m 65 then a decrease due to taking the bridge early. I struggling to not feel like a failure if I take it early. It will pay debts . Get some things needed and leave 10,000 savings which is not much left but I would lock it in.

  15. Robert on June 21, 2019 at 10:42 am

    I am 66 but started my CPP at 62. I have a long life expectancy.
    My only regret is not taking it at 60. If you do a lot of number crunching it is hard not to go this route. Any lesser income later on is easily made up by the increase in your investments early on. At best, waiting is a wash.
    What tips the scales in favour of early withdrawal is the fact that you are going to burn money with your retirement goals in your 60s. Get the extra income when you actually need it.

  16. Nancy on June 25, 2019 at 5:39 pm

    there is one other scenario for taking CPP early – and that’s for the many of us Americans up here. If you are eligible for Social Security, they will deduct half your CPP benefit from your SS payment. They call it the “Windfall Elimination Provision”, though where the windfall is to be found, after working a full career on both sides of the border, beats me. So if your CPP is as small as possible, and you delay SS payments until 70 so they are as large as possible, the clawback is minimized and overall payments maximized.

    Yes, this is a bit obscure, but there are a lot of people in this situation that don’t know about the WEP.

    • Sue on April 20, 2021 at 11:32 am

      Hi Nancy, was most of your earning in the States. I am trying to figure all this out. I worker 11 years in the States and they rest here in Canada. I was thinking the other way around to take the Social Security payment early at 62, work until 65 in Canada and take my CPP at 70. So hard to figure out!!

      • Nancy on April 21, 2021 at 1:40 am

        I worked 10 years in the US before moving to Canada. Precisely 40 quarters as it happens, which is the minimum amount to qualify for Social Security. (Sheer dumb luck, I wasn’t thinking about that at age 29.) the reason I chose to take CPP early and defer SS is that SS payments are higher than CPP Payments. The SS amount I could get today is about 2.5 times the CPP payment I’m getting today. (And the years I worked in the US were my low earning, start of career years.) Thus the deferral makes the eventual SS payment even higher, so that will yield greater total dollars at the end. Also, they will pay spousal benefits to my husband, who never worked in the US. Sure, there are risks. The US system is not as well funded as ours. And they argue more about future eligibility rules and amounts. Yes I could die before collecting any or much of it. But if not, it will be a bigger mitigation of longevity risk than if I had done it the other way around.

        • Nancy on April 21, 2021 at 2:05 am

          Adding: not only is the eventual US payout bigger by deferring Social Security but you would minimize the WEP clawback. If you take SS now, at the lower rate, and defer CPP so it is higher later, the US will reduce SS payments by 50% of the now-higher CPP amount when you start taking it. The clawback is bigger. I cannot see any scenarios where it is better to take SS earlier than CPP

          • Susan on April 21, 2021 at 2:25 pm

            Thank You Nancy for the response. A lot to figure out for sure! I am waiting for my SS Statement. I’m still working at age 61 but want to get all my things figured out. Appreciate the help as a lot of Advisors don’t know about this WEP.

  17. James on June 25, 2019 at 6:16 pm

    I have never met anyone who regrets taking CPP at age 60. It is a no brainer, its cash in hand for the present, when you are fit enough to actually enjoy spending it, travel, hobbies, etc. They don’t break down retirement into Go Go, Slow Go and No Go years for nothing. The only people who want you to delay is the government and financial advisors so they can either save money off you or make money off you. If you do happen to have a long healthy life and pass our break even point, who cares, you are living, the alternative is to have not reached that point because you are dead. Take the money and enjoy! OAS will kick in at 65 and if you think you have health problems in your future that will require more money in your 70s and 80s then delay OAS until 70. Again I would still take OAS at 65 because the younger you are the more you will enjoy the money.

    • Steve Bridge on June 26, 2019 at 7:54 am

      James, they may not have regretted it, but they may not have done the math, either. Delaying CPP and OAS saves you a LOT in taxes, and gives you a LOT more money over the course of your lifetime. It also helps immensely with estate planning, because if you’ve left a lot in your RRSP/RRIF and die early, as you suggest might happen, when the last spouse passess ALL of this money is taxable as income. This is likely a greater cost to you and your estate than losing out on OAS and survivor CPP.

      As far as financial advisors go, you need to look behind the curtain a little bit and learn the differences between different advice models in Canada. Usually, commission-based advisors will agree with you and want you to take CPP at 60. Why is that? Because they collect commissions from you for longer. Do you know why an advice-only/fee-only planner would run the numbers (taking into consideration tax brackets, pensions, RRSP/RRIF/TFSA/Non-registered investment account balances, life expectancy/health concerns) and in the end probably advise you take it at 70? Because that’s what would be better for that person’s situation.

      Not all advisors are created equal or work under a sales/commission model.


      • Mike Abraham on June 26, 2019 at 9:32 am

        But Steve, not all of life is math, and yes while the math may say (in a given context) that one will get more overall with a delay…there are too many intangibles that MUST be factored (and cannot) into your tangible math equation. Plus there is NO IMPACT to “you” when you are dead…you are dead. Estate?? Why do people want to kill themselves (figuratively) to leave money behind to those that did not earn it? Don’t we already have enough bratty people in this generation who feel entitled to something they did not earn since the dawn of getting trophies for “showing up”?!

      • James on June 26, 2019 at 10:18 am

        Agree to a point. I am using my RRSP up before I collect CPP and putting any savings into my TFSA which will not effect my CPP or More importantly OAS. I had great difficulty finding an advisor to help with that. They wanted me to get an Annuity!

        • Steve Bridge on June 26, 2019 at 12:42 pm

          That sounds like a pretty solid plan, James. Delaying CPP/OAS and drawing down all of your registered investments can help avoid OAS clawback as well. Depending on the couple, they could collect $50-60k guaranteed per year from CPP and OAS the rest of their lives. They could have literally $0 in the bank and live a pretty nice life (Pensions, potential inheritances, TFSAs and non-registered on top of that would help as well).

          And yes, I can understand your frustration with finding an advisor to give you the best advice. Advice-only/fee-only planners are less than 1% of all advisors in Canada and we don’t always have the marketing or exposure of the others.

          Best of luck.

    • Mike Abraham on June 26, 2019 at 9:27 am

      James, my thinking exactly and has been so for my whole career. Plan to retire early and live !

  18. Claire on June 26, 2019 at 8:48 am

    I took CPP at 60 and put it all in an RRSP every month. I am still working and paying CPP and the last 2 years they have increased the amount I get, I guess as a thank you of sorts. I worked for 40 years but had several out of the work force raising kids and then never made a great deal of money until my last 5 or 6 years. I use the RRSP tax deduction to get a large refund of my federal/provincial tax back and reinvest that as well. I have a large contribution room and plan to retire early in the next 18 months with a defined pension plan I’ve paid into for the past 20 years plus savings and investments from an inheritance. I’m making it all work to further fund my retirement after years of inability to save so I think I made a good move in taking mine early?

    • James Dean on February 22, 2021 at 7:18 pm

      Hi Clare ,
      I almost gave up looking for an answer to the same question you had but couldn’t find an answer. Did you ever get one? I’m 59 and retired in my early 50’s. I’m happy where I am financually and still put in $1,000 a month in RRSP’s . The plan was to not use my CCP until the age of 65 and if I was still financially good, age 70. But lately I was thinking it would make better sense to collect my CCP at 60 and just keep on re-investing into my RRSP’s . Thought it would be better making interest rather than not..

      • Darren Theoret on April 23, 2021 at 1:02 pm

        Thanks for your post James,
        I’m still unsure what I should do. I retired from a job with full pension when I was 55 but went right back to work at another job. I’ve been putting money into my RRSP. My husband is also retired and has a disability so isn’t working now. Our house is paid off and I will be turning 60 next year and will qualify for CPP but I’m not sure if that is a good plan yet. I have been reading all the posts here and I’m more confused than ever.
        I enjoy my job and don’t have any plans to quit any time soon and the CPP might put me in a higher tax bracket.

  19. John on June 26, 2019 at 6:32 pm

    Great site, and I agree to wait as long as possible, I am 55 and will retire at 56. I now have 39 years of contribution all at the max or handy to it, I will burn my registered and non registered accounts to receive 50 k to age 60 and take a DB pension at age 60 supplementing it with RRSP and TFSA until I take CPP. Question I have is if a CPP pension is taken at 60 they look at the best 35 years but does it still require 39 years for maximum. One piece not mentioned is if you take CPP and continue to work (as so many do) it is being taxed at the maximum rate.

  20. JR on July 28, 2019 at 8:03 am

    Those with defined benefit pension plans need to do their math very carefully. Many with defined benefit pension plans have very little RRSP contribution room and have to do much of their retirement saving in a combination of TFSA accounts (which did not exist when I was saving for retirement) and taxable investment accounts. Note that every penny of dividend income in a taxable account gets “grossed up” (i.e., multiplied by 1.38) and it is the grossed up amount that is included as taxable income.
    By the time you reach the point of taking Old Age Security, between your “grossed up” retirement income from taxable accounts, your “enhanced” CPP income (from waiting to take CPP), and your defined benefit pension plan, it is very easy to exceed the OAS clawback/recovery tax level, and you end up losing much of the “enhanced” CPP/OAS amounts to the OAS recovery/clawback tax.

    As time goes on, if you live a very long life, you can continue to shelter some income through judicious use of a TFSA, but you really need to do the math carefully to ensure that you know whether waiting to take CPP/OAS is, in fact, a good idea when you have a defined benefit pension plan.

  21. David D on September 9, 2019 at 11:25 am

    Guys, one of the best sites for understanding and calculating your CPP is https://retirehappy.ca/how-to-calculate-your-cpp-retirement-pension/
    Doug Runchey is a kind and generous blogger who will, for a small fee, also do your scenario calculations for you. This should be compulsory reading for all.

    John, regarding “Question I have is if a CPP pension is taken at 60 they look at the best 35 years but does it still require 39 years for maximum?”
    In standard cases, ones ‘contributory period’ starts the month after they turn 18 and runs to earlier of month they opt to take their CPP or month they turn 65 (assuming not working/contributing longer). If full 18-65, this is 564mo or 47y.
    The standard CPP calculation drops out the worst 17% of earnings months (other rules for child rearing and other cases). 17%*564=96mo or 8y. This is where the 47-8=39 best years comes from. If your best 39y all beat maximum CPP earnings, then you qualify for maximum CPP at 65, which for 2019 is $1154.50 monthly. http://www.drpensions.ca/cpp-rate-table.html

    If you take CPP earlier, then on top of the harmful 0.6% per month decrease from your 65 calculated pension (i.e. 36% if you take at 60), you have to consider the helpful 17% dropouts. So at 60, for example, the contributory period is 504mo or 42y. The dropout is 17%*504=86mo or a bit over 7 worst years. If your best 42-7=35y all beat maximum CPP earnings, then you get the most you can for 60.

    If you only contribute to say 60 (or earlier, or some point before 65), by opting to take CPP before 65, you can avoid having to drop extra zero-earning months/years. But no matter, there is NO scenario where taking CPP before 65 is as high as at 65 because of the 0.06% per month early reduction. And it is always 0.07% per month higher yet after 65 to 70.

    To quote Doug Runchey, whether or not you have too many low or $0 earning years between 18 and when you opt to take CPP, by waiting to 65 (or beyond), “you get a larger slice of a smaller pie”, but you do get more pie if you wait”.

  22. David D on September 14, 2019 at 12:15 am

    Apologies, I meant 0.6% and 0.7% per month (not 0.06, 0.07%).

    And for those who think they could do better than waiting by investing their early CPP (thus not spending it), you would have to earn better than 12*0.6%=7.2% guaranteed above inflation and fees between 60-65 and 8.4% between 65-70. Remember, CPP is indexed to CPI inflation and the last 5 year average YMPE.

    • Ed Middleton on November 1, 2019 at 7:03 pm


      Agree with your return #’s. When you say they are above that of inflation and YMPE are you saying that both are added on top? I noticed that the YMPE will increase each year (looks like based on inflation) which would increase the CPP amount. Are you also saying that CPP is also increased with an inflation amount on top of that?



      • David D on November 5, 2019 at 4:06 pm

        No, not really. CPP benefit payments are indexed to previous year inflation (as is max CPP amount). YMPE is a 5-year average calculation; each new year’s YMPE is indexed based on average wage increases in the Canadian industrial sector, which is often a bit above inflation. The latter is used in your CPP calculation; the former is applied once you are receiving benefit.
        Quote from Doug regarding someone born in November: “…starting your CPP retirement pension in January would result in a higher pension as a result of the higher average YMPE, but starting the pension in December gives you the full yearly CPI increase for the cost-of-living. It’s usually fairly close which gets you the higher net benefit, but there have been a few years when one alternative was clearly better than the other”.
        See also http://www.drpensions.ca/cpp-rate-table.html

  23. Susan R. on November 3, 2019 at 3:13 pm

    I marked a question wrong on my application and received a payment end of Oct. 2019..I was wanting to wait until 65 and should have gotten first payment end of Jan. 2020, so 4 months early…I plan to keep working and paying into CPP as long as possible. How will this mistake affect future payments? will they stay the same forever or will they increase over time?

  24. Kayt on November 28, 2019 at 11:47 am

    If I take my CPP at age 61, while still working and contributing the maximum until age 65, would the post retirement benefit amount received for contributions between age 61 and 65 equal the amount I would have received had I waited to collect the CPP? I could use the money now, but I don’t want to make a mistake that can’t be corrected. I already know I’m giving up so much by collecting before age 65, but I’m having a hard time understanding the difference between what I’d get if I didn’t collect the CPP retirement benefit before 65 and if I collect now, at 61, keep working, and receive the post retirement benefit on top of any CPP benefit that I would already be receiving.

  25. James Heidebrecht on January 15, 2020 at 9:25 am

    I am just starting to consider all of this retirement always seemed so far away. After turning 50 it all seems too real. Hey, where did the time go?

    Love that you assuage people’s fears that the CPP will be gone by the time they get to their benefits. It’s something we should all be proud of as Canadians. Great article.

  26. fbgcai on January 19, 2020 at 7:42 pm

    No one ever factors in non-contribution years, the assumption being everyone works/contributes until age 65- in my case I had more than 15 years of no CPP contributions due to how I was compensated (dividends from a private corporation and retiring very early ) so delaying CPP would have (in my case) actually resulted in a reduced payment. I took CPP at the earliest opportunity – age 60.
    ps. would have preferred not paying CPP premiums in the first place – I would have had a better return – especially since I wa paying both employer’s and employee’s premiums

  27. Randy Spencer on February 6, 2020 at 1:22 pm

    I am 63 just sold my business last year but i have not payed cpp since 2002 and now live off rrsps investments when is a good time to start for me. I have a statement of contributions that shows estimated benefits of 550.00 if started today 753.00 at 65 and 1069.00 at 70 what are my best options going forward

  28. Zafar Khan on February 6, 2020 at 1:46 pm

    It’s a good read Robb
    I moved to Canada over ten years ago.
    Never worked as my sons were working never contributed in CPP. Now I’m sixty, will I get any pension?
    Thank you

  29. Joan Hing King on February 21, 2020 at 6:38 am

    I left my job when I was 55 (as I could back then) I took my CPP at 55 which was about $900 per month and invested it since that time. I am now 71 this year. If you multiply 900 x 12 x 16 = $172,800. I also took my company pension which was $600 x 12 x 16 = $115,200. The rationale is I could die soon after I retire so I decided to play for what I could see. I beg the question would I have know back then that I would live 16 more years after I retire? My advice is taking it and do something meaningful with it.

    Most people die 1-5 years after they retire so why wait just to get a few bucks more. I am glad I took my pensions early as over the years I accumulated $403,200 and that is real numbers.

    • Mare T on October 28, 2020 at 9:37 pm

      Hi Joan! How did you manage to collect your CPP @ 55 years of age? I don’t understand?

  30. Sandy N on May 7, 2020 at 4:47 pm

    I understand that the combined CPP benefit and survivor benefit cannot exceed the maximum CPP benefit. So if I opt to take CPP at age 65 and receive the full benefit of $1175/month and my spouse dies I wouldn’t receive any additional benefit.
    What would happen if I had opted to receive the reduced CPP at age 60 of $752/month and my spouse dies would I then be eligible to receive some of the survivor benefit up to the max of $1175?

  31. BeenThere on May 25, 2020 at 3:28 pm

    I’m a financial “sales person” who quite often tells people to take their CPP later, that I will make up the difference in the meantime and they will get more $$. So there, don’t be so rude. Usually they don’t want to wait regardless so it’s all a moot point, but your smart advice isn’t the only smart advice out there been given.

  32. Bill on September 13, 2020 at 11:24 am

    What’s your thoughts on taken my CPP at 60 which will be $753 and putting it into a spousal RRSP as my wife has no pension and doesn’t work and has only worked a 5-6 years in total, I know that I must stop contributing to the spousal for 24 months or it will be added back onto my income.

  33. Fred on September 17, 2020 at 4:20 pm

    Just one more comments on delaying CPP

    If a couple that are the same age and have the same contributions to CPP stop working at 65 and are entitled to 50% of the Maximum CPP delay their CPP till 70 The survivor amount is based on 65, nobody gets that intended increase by waiting to 70.
    Nobody discloses this, CPP web site certainly does not, they just dangle a carrot you will have so much more money for waiting.

  34. Tom on October 3, 2020 at 9:50 am

    This is a good thread, I hope it can stay online forever to help future Cdians turning age 60, like myself.

    The dictohomy of false choices, this either / or choice dilemma…. often the answer maybe somewhere down the middle?

    My mother passed away at age 60 of a car accident, 30 years later, we still regret she worked so hard trying to make it and never could enjoy her retirement and hard work. Anything can happen, and sadly sometimes it does.

    I feel after working 35 – 40 years like most of us, pay down mortgage, raise kids, budget their U education, family vacations, soccer tournaments , by time I reach 60 I feel tapped out, a little of me time now feels very appropriate.

    The Math is about trying to optimizing the CPP payout. But i have seen many people who dont make it to the breakeven age of 74 75. So for me taking early CPP is a hedge against my not making it to age 75. Again life is unpredictable.

    I can draw down my taxable pools like RRSP + CPP + future OAS and have decent retirement income to age 90 for myself and spouse. This way I can preserve my tax free pools like savings + tfsa + etc which i can bequeth to my adult children tax free or maybe help them along the way w their own home + pay down some debt + what ever help I can provide …while alive etc.

    So taking early CPP is a way of bridging my retirement income now that I am retired. I draw down my taxable pool 1st. Early CPP means I don’t need to draw down from my existing savings, so i can preserve more of my non taxable pool to help my adult children. I rather help them + give them some help money while I am alive and see them enjoy it rather as bequest when i am dead.

    So this what I mean between two competing retirement goals, a good retirement for myself after so many years of hard work and effort, and secondly provide some bequest or financial help for my adult children which I feel is a continuing life purpose thing.

    Just my to bits.

    • Robb Engen on October 3, 2020 at 10:06 am

      Hi Tom, thanks for your balanced comments and for sharing your thoughts on when to take CPP.

      Have you heard of the availability heuristic or availability bias? It’s a mental shortcut we use to make decisions by recalling some immediate examples that come to mind (i.e. a parent or friend died early). https://en.wikipedia.org/wiki/Availability_heuristic

      I hear this argument a lot when it comes to taking CPP early. I get it, but I also think we underestimate the very real possibility that we’ll live a long life. A 60-year old male has a 50% chance of living to age 89, and a 25% chance of living to age 94. Deferring CPP (or at least not taking it earlier than 65) protects against longevity risk.

  35. Jeannette Hargraves on October 7, 2020 at 12:08 pm

    Great conversations! I will soon be 65 and my current subsidy of a bridge that my pension provides will be gone. Most of my last working years was part time (I retired at 57 to care for senior family members). MY pension will not be enough to live on. I did contribute to RSPs & inherited some. My husband has a good pension & will retire from his ‘other career’ soon as well. We have been Income splitting which has made a difference for him. He contributes much more to the bills. Should I start pulling out some of my investments? —-I did plan on drawing my CCP/ OAS soon

  36. Michael Benson on October 15, 2020 at 12:56 pm

    I am currently receiving ODSP I have turned 60 years old I like questions about my Canada pension plan and if it’s worth to apply

  37. Lawrence Huff on October 18, 2020 at 10:57 pm

    I asked this question on another site and did not get an answer, so i will try you. I am 60yrs old and have been working since i was 18. I have never made max. contributions to CCP. My best years were approx. 37k in earnings. I am having difficulty making ends meet and want to collect CCP now. I will be working for as long as I can. How can I calculate what I would receive as a monthly payment.
    And what happens as I will continue to make CCP contributions

    • Evelyn on January 7, 2021 at 6:02 am

      If you log onto the Service Canada site, you will find a link that will provide the amount
      a-if you retire now,
      b-if you retire at age 65 and
      c- if you retire at age 70.

  38. Gord on November 4, 2020 at 7:43 pm

    People seem so hung up on 60 vs. 65 …. my advice is to approach this decision in 6 month chunks. For example 6 months before you reach 60 you should know if you plan to collect at cpp at 60. Then every 6 months re-examine your situation- financial and health . This will remove a lot of stress because we all know life can change at any time .

    • Jeannine Sonnenberg on January 11, 2021 at 12:19 pm

      I like your post Gord….,

      I am a healthy 62 year old who receives a CPP Survivors pension. I have been semi-retired now for about 15 years.

      I took my CPP pension early at age 60 based on my accountant’s advice that no one knows when we are going to die.

      First thing they did was take away $98.00 from my survivor’s pension because my combined pension, with the 36% early drawing penalty, was over the maximum monthly amount allowed.

      Many do not know that Revenue Canada allows you six months to change your mind in regards to taking your pension. However, to stop receiving it you must return any pension amounts received in those months.

      Within two months of receiving my pension I had done enough research to realize that getting my CPP at age 60 was not good advice in my case.

      I contacted Revenue Canada, stopped my CPP payments, and returned the pension money I received for those two months back to them.

      Further research now tells me that continuing to work part-time to age 70 and deferring both CPP & OAS benefits are probably my best options as I have no savings, no investments and will only have $375.00 income per month in a company pension plan when I do retire.

      I like the idea of an every “Six months review period” to re-run the numbers in the event that my circumstances change.

      This is great advice for anyone, working or not, whether receiving pension or not, as it can really be difficult, or even impossible in some cases, to predict the future in 5 to 10 years let alone in 6 months.

      Thanks…, Jeannine

  39. jimmy s on December 11, 2020 at 8:14 pm

    Very informative and helpful information. Thank you Robb and other contributors. Now at least I feel I have some tangibles to help with decision making.

  40. J Powell on December 13, 2020 at 12:04 pm

    Good article, a few people at my work are taking it at 60 while still working, I don’t plan to. I went to the retirement seminar and don’t recall hearing that it was based on your best 35 years if you go at 60 instead of the best 39 years at age 65 so maybe I will take it at 60 instead of trying to wait until 69. Definitely something else to consider
    One thing you didn’t mention was that women get that 39 years reduced by another 7 years for each child they had (no carry overs)

    • Jeannine Sonnenberg on January 11, 2021 at 12:40 pm

      You are correct in that a woman drops 7 years off of her CPP calculation years for having a child but any cumulative yearly amounts for having subsequent children is based on when she has her children.

      Eg: If a woman’s second child is born seven years or more after the first then a total of 14 years are dropped from her CPP calculations. However, if a woman’s second child is born only three years after the first then only 10 years, (7 + 3) is dropped from her CPP calculations. Overlapping years are not combined as 7 years per child but from the age of birth to 7 years old.

  41. Ted on January 8, 2021 at 11:02 am

    Im 59 and was planning on taking my CPP at 60 for the mere fact that I need the money to pay my mortgage payment. My wife is working for another 3 yrs and doesn’t want to sell and downsize till then so for 3 yrs we will be behind the 8 ball so to speak. I need to maximise my income for a few more yrs before we do sell. I do have a few dollars in a LIRA and only ten grand in TFSA so chump change really. Also I am a Debbie downer about life and death so I don’t COUNT on living into my 90s so money up front makes more sense to me. Question , at 65 OAP kicks in , does every Canadian get it or are there hoops to jump?

  42. Paul E on January 18, 2021 at 7:14 pm

    Just a bit confused on calculation. I’m 60 years old and still working. Should I decide to stop working at 61 and decide to collect CPP at 65, do the years that I am not working from 62-65 have a negative impact on the amount I will collect?
    Thank you!

    • Rosanne Bond on September 16, 2021 at 9:42 am

      I would like an answer to this question as well , that Paul asked. I am thinking of retiring at 63 or shortly after and using RRSP for an income and not drawing from my CPP until I’m 65, will the 2 years not working and not paying into CPP have a negative impact?

  43. Grace on April 17, 2021 at 1:21 pm

    I took my CPP last year just before my 62nd b’day. I am still working and I have work pension which is indexd. I am planning to work till 67 and I wish to continue to contribute to CPP. It’s nice to be getting the extra money now and I will know exactly how much it will be getting when I am 65 and 67.

    But I am wondering now if I should pay back and cancel CPP for now and move it until I am 65 or 70. I will have CPP, OAS, Pension, RRSP and rental income at 65 and older.

  44. Doug Butler on July 2, 2021 at 12:26 am

    Please pick this argument apart:

    Talking (in para 2) about a “7.2% rate of return” that comes from delaying the benefit is misleading. It’s not actually a “rate of return”, it’s just a 7.2% annual growth in the future benefit (i.e. a benefit of ~$770 if started today, would be ~$1102 if started in 5 years) — which needs to be offset against the return that would come from modestly investing the benefit versus getting nothing while waiting.

    For example: If someone starts drawing at 60 instead of 65 (and assuming simple 0% under-the-mattress saving with no other beneficial use of the cash) it’s not until your roughly 77.5 years old before the total benefit paid from waiting 5 years surpasses the early draw.

    Clearly, each situation must be evaluated independently. But I’m all for putting that cash to work now rather than waiting >17 years to catch up (potentially much longer if the funds are put to good use).

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