3 Reasons To Take CPP At Age 70

3 Reasons To Take CPP At Age 70

It might seem counterintuitive to spend down your own retirement savings while deferring government benefits such as CPP and OAS past age 65. But that’s exactly the type of strategy that can increase your income, save on taxes, and protect against outliving your money. Indeed, the key to more lifetime income for many retirees is to defer CPP until age 70.

Why Take CPP at age 70?

Here are three reasons to take CPP at age 70:

1. Enhanced Benefit – Take CPP at 70 and get up to 42% more!

The typical age to take your CPP benefits is at 65, but you can take your retirement pension as early as 60 or as late as age 70. It might sound like a good idea to take CPP as soon as you’re eligible but you should know that by doing so you’ll forfeit 7.2% each year you receive it before age 65.

That’s right, you’ll get up to 36% less CPP if you take it immediately at age 60 rather than waiting until age 65. That alone should give you pause before deciding to take CPP early. What about taking it later?

There’s a strong incentive for deferring your CPP benefits past age 65. You’ll receive 8.4% more each year that you delay taking CPP (up to a maximum of 42% more if you take CPP at age 70). Note there is no incentive to delay taking CPP after age 70.

Let’s show a quick example. The maximum monthly CPP payment one could receive at age 65 (in 2022) is $1,253.59. Most people don’t receive the CPP maximum, however, so we’ll use the average amount for new beneficiaries, which is $702.77 per month. Now let’s convert that to an annual amount for this example = $8,433.

Suppose our retiree decides to take her CPP benefits at the earliest possible time (age 60). That annual amount will get reduced by 36%, from $8,433 to $5,397 – a loss of $3,036 per year.

Now suppose she waits until age 70 to take her CPP benefits. Her annual benefits will increase by 42%, giving her a total of $11,975. That’s an increase of $3,542 per year for her lifetime (indexed to inflation).

2. Save on taxes from mandatory RRSP withdrawals and OAS clawbacks

Mandatory minimum withdrawal schedules are a big bone of contention for retirees when they convert their RRSP to an RRIF. For larger RRIFs, the mandatory withdrawals can trigger OAS clawbacks and give the retiree more income than he or she needs in a given year.

The gradual increase in the percentage withdrawn also does not jive with our belief in the 4 percent rule that will help our money last a lifetime.

You can withdraw from an RRSP at anytime, however, and doing so may come in handy for those who retire early (say between age 55-64). That’s because you can begin modest drawdowns of your retirement savings to augment a workplace pension or other savings to tide you over until age 65 or older.

Related: When Should Early Retirees Take CPP?

Tax problems and OAS clawbacks occur when all of your retirement income streams collide simultaneously. But with a delayed CPP approach your RRSP will be much smaller by the time you’re forced to convert it to a RRIF and make minimum mandatory withdrawals.

With careful planning (and appropriate savings) your retirement income streams by age 70 could consist of CPP and OAS benefits, small RRIF withdrawals, plus – the holy grail – TFSA withdrawals, which do not count as income and won’t affect means-tested benefits like OAS.

3. Take CPP at age 70 to protect against longevity risk

Here’s where the counter-intuitiveness comes into play. Most default retirement projections will have you taking CPP at age 65 (or earlier) while delaying withdrawals from your RRSP and/or LIRA until age 71.

As I suggested above, the idea is to spend down some of your RRSP before age 70 to fill the gap left by deferring your CPP benefits. Good luck getting your commission-paid advisor to buy into this approach. I doubt many advisors would like the idea of spending down your savings early in order to maximize retirement benefits from CPP.

“Spend your risky dollars first because they may not be there for you in your 80s, depending on how your investments do. A bigger CPP cheque, however, will definitely be there for you.” – Fred Vettese

Spending down your RRSP in your 60s while deferring CPP until age 70 is like converting your risky assets (personal savings in the stock market) into a guaranteed income stream for life.

Related: 5 ways to save your retirement

Think about it. Will you still have the required mental faculties at age 80 or 90 to continue managing your own retirement assets? Or would you prefer to enjoy spending those assets in your 60s and 70s, knowing you still have an enhanced (and guaranteed) income stream to last a lifetime?

If your biggest fear in retirement is outliving your money then why not design your retirement income streams to protect against that very fear? Instead, most retirees take their CPP benefits the first chance they get – leaving additional money on the table and giving up a portion of that longevity risk protection.

Let’s hear it: Retirees, when did you take CPP? Soon-to-be retirees, have I given you a compelling argument to take CPP at age 70?

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  1. R Winklar on February 18, 2019 at 5:29 pm

    What if you retire at 60..then you have 10 yrs of 0 income. Is it still worth it to wait until 70?

    • Darren on February 18, 2019 at 6:03 pm

      Obviously not. In fact if you have no income you should not be retiring at 60

      • Stan on February 19, 2019 at 10:03 am

        He/she is asking if the 10 years of no CPP contributory income would reduce the CPP more that deferring until 70 would increase the CPP.

        To answer, the time between 65 and 70 does not reduce your CPP. The years from 60-65 may reduce your CPP unless you already have 40 years of maximum or close to max contributions. If you have that 40 years, you can drop out the 60-65 years without losing anything.

        • David K on February 19, 2019 at 10:28 am

          Ok, Stan, that makes sense. However, if all 5 years have to count (I.e., not dropped out), can you give an estimate of the impact? That is, is it better to take CPP at 60 or 70?

        • Olamim on February 19, 2019 at 11:01 am

          Not exactly. Some of those 40 years may have been low, ie. during university years or when bumming around Europe in your 20s. 17% of the lowest contributory years are dropped out for everyone, more for the primary caregiver of children during the years the children were under 7 if those years were below the adjusted average.

          So maybe 5 zeroes get dropped from 60-65, maybe 8 til 68, but not 10; and the use of the dropout at this time nay keep other low years included. The benefit will erode without contributions, but will still be higher at 70, just not necessarily the 42% higher it would be if contributory average is maintained.

          • Stan on February 19, 2019 at 12:39 pm

            I did say that it would not affect you if you had 40 years of maximum or close to maximum contributions. 17% of the 47 years between 16 and 65 is 8 years. If you only had 3 other low years the 5 between 60 and 65 would be dropped out without penalty. The years after 65 do not count in the drop out if you are not working.

            If you have lots of low or no income years, I don’t know how much the reduction would be if you added 5 more no income years from 60-65. Robb mentions Fred Vettese. You could Google his name to get his thoughts on this and he may address the issue.

          • Les Robson on September 27, 2020 at 9:50 am

            Took cpp at 60 worked till 67 does your cpp go up at 70

        • Robert Lalancette on July 19, 2021 at 1:32 pm

          Good points. I am 64 and I am planning to take my RRSP/RRIF from years 65 to 70 in order to delay the CPP and maximize it. My question though, I do plan to take the OAS at 65, can I get the OAS at 65 and still be allowed to delay the CPP to 70 or do I have to take both at the same time? What is the rule on that?
          Thank you.

          • Robb Engen on July 19, 2021 at 1:54 pm

            Hi Robert, OAS and CPP are two separate benefits and you do not have to take them at the same time. You just can’t start OAS before age 65.

            It’s a perfectly sensible solution to take OAS at age 65 and defer CPP to age 70.

      • Kevin on December 5, 2020 at 10:42 pm

        Agreed. I am 64 and don’t plan on drawing till age 70. Social security will be double cpp. Purchasing 1.09 years of HOOP buy back.

    • Kevin Bougie on February 19, 2019 at 3:03 am

      You sure make a lot of sense

      • Ken Elder on October 24, 2020 at 7:03 pm

        If you die before the age of 82 then you should take CPP at 65

    • Brad Messmer on May 4, 2020 at 10:13 am

      But what about the compounded growth inherent in leaving your investments untouched? Would this be equal to or surpass the interest amt per year for not collecting cpp?

    • Charles on December 7, 2020 at 9:53 am

      I took it at 60 and am investing it in RRSP for my spouse while I continue to work and contribute to CPP until age 65

  2. Greg on February 18, 2019 at 5:31 pm

    Totally bought into taking CPP and OAS at 70 to obtain longevity risk protection and minimize tax as a retiree, especially OAS claw back. If we are unlucky and die before the breakeven date, well, we are dead.

    • Bruce McK on February 19, 2019 at 1:13 pm

      “If we are unlucky and die before the breakeven date, well, we are dead.”

      That’s a great point. If you defer CPP and pass away young then your heirs and beneficiaries will get somewhat less. You won’t be around to care. But if you take it early and live a long time you will have less indexed, government guaranteed lifetime income, making you vulnerable to running out of money when you have the least ability to recover from it.

  3. Kathryn on February 18, 2019 at 5:34 pm

    A great strategy, except as a couple who will have drawn down most of our RRSP savings by the time we reach 70, the financial hit we’ll take when one of us dies is quite drastic. Complete loss of one person’s CPP and OAS, with perhaps the chance of a small top-up on the survivor’s CPP.
    I still haven’t found a clear answer regarding survivor top-up when the CPP is past the maximum, ie 42% higher due to waiting until 70 to claim.
    If the remaining CPP and OAS isn’t enough for one person to live on we’ll have to take that into account when calculating maximum drawdown of RRSP.

  4. Tom on February 18, 2019 at 5:35 pm

    I wish i did this for my cpp when i retired. I am though deferring my oas at least, and the money i would have withdrew from the rrsp/riff i am rolling it into a tsfa, so once 70 rolls in, i would reduce riff withdrawls, and income tax drops . Too many of my friends are taking out CPP and OAS early and complaining of how little it is.

  5. Brien on February 18, 2019 at 5:46 pm

    My wife & I both took CPP at 60 and used it as a travel fund – had a lot of good trips. Good decision – she past away before she reached 70. You never know what your health will be. Cancer took her in 4 years!

    • Claude on February 19, 2019 at 1:33 pm

      Hi No my thoughts exactly! Take it as early as you can, no one knows how long we have!so Sorry about your Loss!

      • William Stewart on February 23, 2019 at 7:57 pm

        Thanks Claude. We had a great life togther with many great trips. I have a girlfriend now and we have the philosophy of travel while we can – so at least one really good trip a year.

        • Claude on February 24, 2019 at 3:57 am

          Hi William, I am so happy, you have a girlfriend, things have turned around for you! LIFE is a precious gift, and we are only given one shot at it! WISHING You and your sweetheart, ALL the best! Take Care!

        • Liliane Dunham on November 10, 2020 at 5:37 am

          This is one of the best articles I have read in a while. I have saved it to read regularly. As someone with a defined pension starting at 56, I will definitely benefit from not withdrawing my CPP until 70 and using my RRSP to supplement my income. Thanks for the great read.

  6. Sandra on February 18, 2019 at 5:53 pm

    I have a defined pension which will be reduced when I turn 65. What should I do? Defer? I had considered taking CPP at 60 and holding off on emptying RRSPs. I’ve been retired for 4 years now.

    • Scott on February 18, 2019 at 9:16 pm

      I look forward to this answer also as I will be in the same situation where my DB “bridge” stops at 65. To maintain my current pension income should I take 1 – OAS, 2 – CPP, 3 – RRSP or some combination.

    • David on February 18, 2019 at 10:14 pm

      I would never consider taking the CPP early if you are getting a defined benefit pension with a reduction at 65 to account for CPP normally starting at 65. You first of all get a permanent reduction in CPP for each month you take it before 65 and then get a reduction in your DB pension at 65. I would much rather take out of my RRSP to make up the difference if needed or to get to the upper limit of your current tax bracket. This has the potential to give you a lower average tax rate throughout your entire retirement as minimum RRIf withdrawals after 71 can put you into a higher tax bracket or result in OAS clawback. So many factors and circumstances to consider as to whether further deferral to 70 makes sense for someone.

    • Victor Souza on October 6, 2021 at 9:45 am

      Thank you so much ! You make a very compelling arguement. I will be 65 yrs in 6 months. I have an RRSP just under 100K Cdn which I hope to turn into a RRIF at age 70. I am working now and hope to work till age 70 as I have steady employment with my employer . If i were to collect my CPP now I would be taxed in addition to my gross annual salary putting me in a higher tax bracket. So waiting till age 70 makes sense! I dont need the money now, i will certainly need it in my 80’s . In the meantime if I should ever need the money due to job loss or sickness I could dip into my RRSP to carry me till age 70. Thereafter, my CPP would be 43% higher indexed for life and whatever is left in my RRSP turns into a RRIF for additional income spread over.my lifetime.

      Besides I have a company Pension plan that should keep me going in addition to the above. So yes it makes sense to delay my CPP till age 70. I could use extra CPP and OAS, Gis whatever else that is coming my way! Maybe a lottory ticket too! Cheers for the article Vic

  7. Stan on February 18, 2019 at 5:55 pm

    My wife will be getting a small CPP benefit, so she will be able to use the entire 60% survivor benefit if I die first. She will get almost the maximum benefit and I believe that that maximum will be increased by 42% if we both defer until 70.

    I worked until 66 and I expect to receive about $27,000 in CPP and OAS at 70, so I have set aside $100,00 in my RRSP to withdraw to replace the deferred government income for my years 67 – 70.

    I look at it as buying an CPI indexed annuity with 60% survivor benefit that pays $8400 per $100,000. You cannot buy an annuity anywhere near that good!

    • Dianne on September 28, 2022 at 2:21 pm

      Sorry, but you are incorrect. My husband waited 6 months past age 65 before taking his cpp and oas. This was so he wouldn’t have any of his Oas clawbacked. So he has a slightly enhanced
      Cpp. When I turn 65 my cpp will be close to the maximum cpp amount. If I start my cpp at age 65 and my husband passes away before me my CPP will Not be bumped up any more than what the NORMAL maximum CPP is at the time of his death. In other words…in my position, the enhanced portion of a person’s CPP cannot be used to bump up the remaining partner’s cpp. The surviving spouse will never get more than the regular maximum cpp. Our financial adviser explained this to us. I also checked with my service canada and was told the same thing


  8. Retired@60 on February 18, 2019 at 5:55 pm

    I can see how the benefit exists if you are single. I retired at age 60 and have been using RRSP withdrawals to fund the gap until I collect CPP at age 65. I will collect maximum CPP, while my spouse is currently collecting about 75%. Delaying my CPP to age 70 will result in an increase of $6K/year, but I will have to fund the foregone payments from our retirement assets, including RRSPs. If I should die before my spouse, she will only collect a survivor CPP to top up her CPP to the max single CPP benefit as at age 65. How does the delay work for couples who are both eligible to collect, especially if one spouse dies before mid-80’s?

  9. JM on February 18, 2019 at 5:56 pm

    Took my CPP at 65. No regrets. Will definitely discuss with my wife any benefits of her waiting to 70. She is younger than I and loves her job.

  10. Bruce McK on February 18, 2019 at 6:00 pm

    Good article Robb. It’s always a very contentious subject. I plan on taking CPP at 70, but I don’t know anyone else that plans to. Most people’s attitude is take the government money as soon as you can.

    For people that do not have a well funded indexed DB pension deferring to 70 makes a lot of sense. Many people say they will take it early and invest the money. As the article said, deferring increases it 7.2% annually to 65, then 8.4% annually to 70, and those numbers are inflation indexed, so more like 9-10% after inflation. How many people could get that kind of guaranteed investment return?

    Deferring government guaranteed indexed benefits protect against running out of money in three ways. 1) Protection against longevity. 2) Protection against bad market returns, especially later in life. 3) Protection against high inflation which can erode purchasing power, especially if you live a long time.

  11. Smitti on February 18, 2019 at 6:08 pm

    I just retired at 62 and took CPP ! I don’t think you can generalize about the best time to take it. My income is relatively low at this time / will live off of non-registered investment capital and income until age 71. So for me CPP of $1,000 / month covers a lot of my overhead ….pty taxes / insurance / utilities / car insurance…plus I like the idea of receiving a monthly CPP payment deposited to my bank account ….after having worked for 35 years.
    My break even year is ~ age 76….think I’ll enjoy the income now….have sufficient funds for later retirment years.

  12. Alexandra Unruh on February 18, 2019 at 6:42 pm

    I am on Long Term Disability which is gone in 4 years when I am 65.*.I went to a financial planner to assess where I was at in my finances. * WELL, my CPP is small, OAS average, and if I want to make under 45,000.00 a year, my money will run out (except OAS and CPP when I am 73. If I invest it, then 78. * The ADVISOR didn’t mention anything about taking out CPP when I am 70. She just said to use up RRSP before using my TFSA.

    • Mo on February 19, 2019 at 6:16 pm

      If you receive a CPP disability pension, it automatically converts to a retirement CPP pension at 65. No choice unless that has changed recently.

  13. Stan on February 18, 2019 at 9:29 pm

    I think that it’s worth adding to any advice that advocates making RRSP withdrawals between the ages of 65 and 71 that if the $2,000 pension income credit is available, the RRSP withdrawal amount should first be rolled into a RRIF (at least the first $2,000 of the intended withdrawal for that year), and then withdrawn.

    • Brian on February 19, 2019 at 10:01 am

      Is it a requirement to roll $2000 of RRSP into a RRIF to take advantage of the Pension Income Credit? If I were to withdraw $10,000 from my RRSP at age 65, could I not claim the Pension Income Credit?

      • Stan on February 19, 2019 at 12:09 pm

        Unfortunately, the $2,000 pension income credit is not triggered by RRSP withdrawals.

        • Denis on January 18, 2020 at 8:59 am

          TD adviser also stated that is a trick to trigger that 2000 credit. To take out 10K into a RRIF and withdraw 2K a year. Just have to remember to do it.

          • Stan on January 18, 2020 at 9:10 am

            You don’t have to remember. You can set up an automatic withdrawal from your RRIF. Since I am deferring my CPP\OAS, I move $24k into my RRIF each year and have $2k automatically withdrawn every month. I put the $24k into a high interest savings account in the RRIF which is actually a mutual fund, so I do have to remember to seel 4@k of that fund 2 days before the withdrawal.

  14. Jan on February 18, 2019 at 10:34 pm

    Single female, retired at 57, took CPP at 60 (now 65). I’m glad I started collecting it early as it’s helped fund (over $8,000 annually) of my travel expenses. Being single, when I depart from the planet, no one will receive any of the money I paid into CPP. So I couldn’t justify waiting, as none of us know our expiration date!

    My brother was waiting until 65 to start collecting his CPP, but passed away at 62 from a sudden illness (our parents lived into their 80’s). His wife received a survivor benefit but then she died 3 years later. So they didn’t benefit much from their lifetime contributions to CPP.

    All things considered, it made the most sense for me to take CPP early. We all have different circumstances. But for most single people, I personally think taking it at age 60 is the way to go, because we never know what’s around the corner. Enjoy it while you can! Take some nice trips, if travel interests you. Life’s way too short for many people!

    • david j on February 19, 2019 at 1:21 pm

      Hope your brothers executor applied retroactive for 11 months of CPP if he wasn’t collecting at time of death. Benefit would have been considered a rights and things and taxed on a separate tax return

      • Mo on February 19, 2019 at 6:22 pm

        Good advice.

      • Stef on February 6, 2022 at 4:48 pm

        according to CPP website: There are no retroactive payments for a CPP retirement pension taken before age 65.

    • Rob in Germany on June 29, 2019 at 1:10 pm

      @jan What were you living on? Employment, investments?

  15. Connie on February 19, 2019 at 5:11 am

    I intend to retire at 55 and collect CPP at 60 (my husband will be 65 at that time). There are no guarantees in life, even if you are healthy. It looks like the break even age would be around 80 to benefit from delaying until 70. If you really think you’re going to live past 80, then sure go ahead. But you would also have to account for any interest you may have made if you were able to invest some of that money as well into a TFSA. I say take it when you can (unless you have a DB pension), too many people paid into it their whole life and barely got any benefit from it (or none at all).

  16. sara on February 19, 2019 at 6:12 am

    Seems break even is 81 to 83 years where upon it would pay-off. Since life expectancy is more than that, it is a good strategy. It is also a good strategy with positive inflation every year,

  17. rikk2 on February 19, 2019 at 8:10 am

    Hmmm … in the example, the CPP amount at age 65 is $7,973 which totals $39,865 over 5 years. Waiting till 70 forfeits that $39,865 so that at age 70 the CPP amount will be $11,322/yr … $3,349/yr more than if taken at age 65. It would take $39,865/$3,349 which is 11.9 years to recoup that $39,865 … that’s age 81.9 … thats’ gambling, my opinion 🙂

    • nic on February 19, 2019 at 9:30 am

      Accountant David Trahair, who is also a Canadian financial consultant and has authored books on financial planning, makes a very good and calculated argument for taking CPP early in his books.

    • Robb Engen on February 19, 2019 at 12:20 pm

      Hi rikk2 – pension expert Doug Runchey shared a break-even analysis with me a few years ago to help with this post: https://boomerandecho.com/when-to-take-cpp-early-late-or-somewhere-in-between/

      In it he shows that the only optimal time to take CPP at age 60 is if you happen to die before age 70. If you think you’ll live past 85 then you’re better off delaying CPP until age 70.

      If you live to age 90 you’ll have collected $117,000 more by taking CPP at age 70 then you would if you started collecting at age 60.

      Also important to note that you can take CPP benefits anytime between age 60-70. If you want to follow the averages and the current life expectancy for a male is 80 then you should take CPP at age 67 to get the most from the program.

      • rikk2 on February 19, 2019 at 12:39 pm

        I started collecting at 65, so far so good … and the indexing e.g. 2.2% for 2019 doesn’t kick in if you’re not collecting … enjoy the day 🙂

        • rikk2 on February 19, 2019 at 1:44 pm

          To clarify, contributing vs collecting … and going forward a new wrinkle/topic for the still working, the enhanced CPP, e.g. … “For each year of contributions at the higher rate (5.1 percent starting in 2019; increasing again to 5.25 percent in 2020 … “

  18. Des Faria on February 19, 2019 at 9:26 am

    I agree wholeheartedly with the article. If you are able to live or better yet work until 70 without taking OAS and CPP, this makes sense from a risk perspective as if you have enough to live on until then why worry about not getting something you are entitled to if you die early (greed?. Taking early retirement might actually increase the risk of running out of money if you live longer and live in a miserably poor financial condition; if you die early you’re gone, just the non-material afterlife to contend with.

    Note that this has been my plan and working towards it but of course individual circumstances or illness could result in a different decision. The future is unsure, make the best decision based on current known circumstances.

  19. KC on February 19, 2019 at 9:27 am

    The wildcard here is your health. All I have to do is look at my father, who was the picture of health all his life suddenly have his health reduced significantly over past few years. Now, it’s minimal activities for him. He took CPP at 65. He’s now 67. Not much use of his money nowadays since he can’t do much. My mother has opted to take CPP at 65 as it’s small already and the impact of taking it at 60 was significant to her cashflow. Her family history shows many family members not living beyond 70 if they even made it there. She’s now 64. She’s definitely not going to wait till 70. If one has sufficient funds to have a tidy sum of RRSP, you can weather through anything. If one has a spouse and is already receiving a high CPP amount, they won’t receive much in the way of survivor’s benefit but their income has been essentially chopped in half.

    I think for me personally, I would take CPP at 65 simply because life is too short and I’d much rather have a little too much in the early years to enjoy my retirement then to have all this money in my 70s and can’t do much with it. If you’re being taxed too much in your retirement years, it just means that you have a good income.

    I also wouldn’t count on TFSA not being income-tested by the time I reach retirement when the government realizes how much taxes they’ll be missing out. If the current status remains this way by then, it’ll be a bonus.

    • Robb Engen on February 19, 2019 at 12:11 pm

      Hi KC, thanks for sharing. You might find this article interesting as it addresses the fear of dying early. Some key quotes:

      “the probability of premature death is small. Between ages 65 and 80, there is only a 13 per cent chance of dying if you are female and 20 per cent if you are male.”

      “If you are concerned about your spouse’s welfare if you die young and think that starting CPP early will improve the financial situation, you should think again.”

      “Early commencement of CPP does not help your surviving spouse after all.”


      • KC on February 19, 2019 at 12:57 pm

        Thanks for the links Robb. I’m still on the fence honestly. I would have to re-evaluate as I get closer to 60. Still got lots of time ahead of me to decide and of course, things can change between now and then!

  20. Wes on February 19, 2019 at 9:51 am

    Great topic. My wife and I retired at the same time, she at 60 and I at 62. She had a defined benefit retirement plan while I had my own self-directed retirement plan. We started collecting our CPP payments as soon as we retired. We use the proceeds from the CPP and retirement benefit payments to help us with our daily expenses and invest the left over funds. We just don’t know how long we’ll live, we’re both cancer survivors and still paying taxes.

  21. David K on February 19, 2019 at 10:16 am

    Hi Robb,

    Another interesting post! I’m wondering if you or one of your readers can help clarify my question…

    In my situation, I will have many years of zero contributions, likely exceeding 11 years by the time I turn 60. I know that one can drop out 9 years of zeroes, but if I wait until 65 or 70, there will be at least 5 more years of zero contribution. I think that this skews my decision to take CPP at 60, but I can’t figure out the exact impact on my CPP benefits…

    If you can help me on this, it would be greatly appreciated…

    My guess is that this might be a Doug Dahmer question.

    Thanks, David

    • Robb Engen on February 19, 2019 at 12:08 pm

      Hi David, pension expert Doug Runchey explains this here:

      “You will always get more CPP by waiting, even if you’re not working.

      Your “calculated (age-65) retirement pension” may decrease if you’re not working between age 60 and 65, but the age-adjustment factor will always make up for that decrease, and then some.

      “In that situation I use the expression that you will receive a larger piece of a smaller pie if you wait, but you will always get more pie,” he said.

      Here’s an article I wrote a few years ago with Doug’s help that may be useful in your decision: https://boomerandecho.com/when-to-take-cpp-early-late-or-somewhere-in-between/

  22. Rick on February 19, 2019 at 10:23 am

    One thing to consider is what impact the additional CPP payment will have on your OAS clawback. If you have been lucky in your RRSP and other investments you might be better off starting CPP early, not delaying OAS and drawdown your RRSP savings before reaching 71 so that the mandatory withdrawal from your RRIF does not put you in a tax bracket that negatively impacts your OAS. (reference Ed Rempel blog)

  23. Wendy Lai on February 19, 2019 at 10:28 am

    Is it possible to delay CPP to 70 but apply for OAS at age 65?

    • Robb Engen on February 19, 2019 at 12:00 pm

      Hi Wendy, yes it is. Two separate programs. In fact, what Fred Vettese, actuary and author of Retirement Income for Life, suggests is that if you delay CPP until age 70 that you should still take OAS at 65.

  24. C. Lanthier on February 19, 2019 at 1:26 pm

    Uh! Sorry, I have NO RRSP’S, No nothing, so I’m still working, probably till I die, I took my CPP at 60, because I’m probably not live till 75,and even if I DO live passed that, I will be much further ahead, by collecting it earlier,and ACTUALLY getting more, in the END! Thank You!

  25. Alicia on February 19, 2019 at 2:50 pm

    How many of us won’t live until 70 years of age? My mom died at 63 years of age, what happened to all of her contributions?
    The least they could have done is pay for her funeral.

  26. Sidd Cairn on February 20, 2019 at 2:42 pm

    Great thought provoking articles, it make sense if you have money in RRSP to drawdown and wait till 70 to collect the bigger CPP pie. I think that’s what I will do and take OAS at 65. Thanks boomer&echo.

  27. Steve on February 20, 2019 at 5:26 pm

    What would you rather have, $100 now, or $200 in ten years?
    Did I mention I’m a politician?
    I might not be around in 10 years.
    I might change my mind.
    I might not have the money to pay you.
    Burn through my savings and hope that the gov’t will feed me,
    20 or 30 years from now?
    Is that Socialism?

  28. Larry Acchione on February 21, 2019 at 6:29 pm

    I am working until 70 yrs old and deferring my cpp and oas until then. My date of birth is 10/10/53. I have called service canada trying to find out how to stop paying into Cpp but they keep referring to form cpt 30. The problem is that when I go to fill out the eligibility part it states that if you are not collecting cpp you cannot opt out. I have more than the max cpp required and any cpp contributions have no value to myself so my guestion to you is how do I stop paying into cpp. My mpp, finance minister and numerous service Canada employees have been unable to help. Thankyou

    • J. Mackey on January 8, 2020 at 5:00 pm

      The form is still faulty. You DO NOT not have to be collecting CPP to opt out paying. Just leave that part of the form blank and submit it. I was told this by a CRA rep. a couple of months ago – they may have fixed the form by now.

  29. Bryan on February 23, 2019 at 3:55 pm

    Hoping someone can help answer this for my mom who is 63 and on the verge of taking CPP or delaying. How does she find out how much she will be getting each month/what she contributed during her working years? Thanks!

    • Bryan on February 23, 2019 at 4:16 pm

      Turns out I found the answer in the article Alexandra Mcqueen mentioned in the comments earlier. Thanks Alexandra!
      It is the Statement of Contributions to the Canada Pension Plan and info can be found here in case anyone else had the same question: https://www.canada.ca/en/services/benefits/publicpensions/cpp/statement-contributions.html

      Now my next question is, does anyone know of a good calculator for retirement planning that can factor in pension income, RRSP/RRIF withdrawals, CPP and OAS? Mainly looking to find that balance of maximizing everything while avoiding OAS clawback.

    • Gruff403 on February 23, 2019 at 4:59 pm

      Hi Bryan;
      Go to Gov of Canada Website and Find the My Service Canada Account (MSCA). Sign up or use the Sign In Partners if she uses one of the Financial Institutions Listed. You can find your Record of Contributions and estimated pension amounts. Remember these amounts are estimates assuming you work until 65.
      You can also write to receive a written copy of Record of Contributions but that takes time. Good place to start.

  30. Dave on May 23, 2019 at 2:52 pm

    Average life expectancy as you get to 65 is 85 – the breakeven on the CPP question living to 85 is to take it at age 68

  31. TPR on May 23, 2019 at 10:29 pm

    I came to Canada at 36. I have always worked making average 90K every year except 3 years when I did consulting. That time I took 25k / year to save taxes. I have no plan to retire. I love my work. My current age is 58. Should I take CPP at 60 and keep contributing? or wait till 65?

  32. Robert on January 13, 2020 at 9:24 am

    I retired while still 60 and have a regret about waiting for 2 years to take my CPP. No matter how you slice and dice the numbers, there is no reason to wait to take CPP unless you have very special circumstances, which are hard to imagine.
    I agonized over this decision and which I hadn’t. The arguments for taking it late completely dissolve when you consider the fact that you will spend far less on leisure and discretionary purchases as you age. Hedging against longevity is a red herring. Old age hedges against itself. Why save the money for when you are traveling less and have lost interest in new fashions and new technologies?

    Let your tax-sheltered nest egg stay that way until they force you to eat it. 10 years is a heck of a lot of tax-sheltered income, which you will be delighted at at 71. It is pretty sweet to be worried about high taxes at 71 because you are hauling in so much.

    If you don’t actually need the injection of CPP at 60, reinvest it and use it to index against inflation.

    • Denis on January 18, 2020 at 9:03 am

      This is a complete – no answer fits all. Your point IS a great one though.

      I am also agonizing to take it now and have it as fun money or wait for 70 as a great hedge, a great insurance, …

      For me, my parents are still alive at 86 and 85 so apparently I will get more out of it waiting to 70 AND I don’t need the money.

    • Dave on May 23, 2021 at 10:50 am

      I love your line “ Old age hedges against itself.”. So true…!

  33. AdvisorGuy on February 13, 2020 at 12:25 am

    Commission based advisor here, who advises clients to do the very thing. Why? Because I actually care about my clients’ well being, and when you put your client’s interests first, you have no shortage of them and don’t need to milk them for every penny you can squeeze from them.

    Wait till 70 to draw your CPP.

  34. Ron on December 11, 2020 at 10:31 pm

    Does the CPP survivor benefit increase as well if CPP is started at age 70? That is, the survivor benefit is 60% of the CPP amount. If my wife has no CPP of her own, and I start my CPP at age 70, if I then die at 75, will my wife receive a larger survivor benefit then if I started my CPP at age 65? Or is her survivor benefit amount calculated based the amount I would have received at age 65, even if I started the pension at age 70?

  35. Myles Liddel on April 15, 2021 at 6:36 pm

    Very nicely presented. Thank you.

    However, I am curious about what happens when either spouse dies prematurely (or earlier than planned).

    To simplify the scenario, both spouses are more or less the same age. Both decide to defer taking their CPP and consequently forego receiving their CPP at the lower rates.

    At age 71, they begin to receive their CPP at the higher rates.

    However, at age 73, one of the spouses dies unexpectedly.

    Questions #1:
    Going forward, what happens to the surviving spouse’s monthly pension?

    Question #2:
    How is the CPP loss in deferred pension income from the spouse’s early death recovered?

    Question #3: Is this possibility of “early death” adequately explained, complete with an example, so that an informed decision can be made concerning CPP deferral (i.e. the nil effect or negative impact this will have on total CPP collected over time)?

    It will be helpful if an example can be provided for questions #1 and #2, as well as a link to the answer to “question #3.

    Thank you

    • Macgyver on August 6, 2021 at 2:53 pm

      Hello Myles, CPP has a bunch of quirky rules, but the one rule that applies no matter when you take it is that one person can never get more than the maximum allowed yearly benefit. So if your spouse goes early you may receive additional funds to your CPP (as a survivor benefit) but only to the maximum of what one person can receive (max CPP in 2021 is $14445)
      So Question #1 , The surviving spouse’s pension if started continues at the same rate plus a survivor pension which is calculated to increase the pension based on the lost ones pension as if it were started at the age of 65 (so not the enhanced benefit value that was being received)

      Question #2 When the spouse passes, their pension is stopped, there is no recovery of that “full” pension value ever, it will be reduced to a survivor pension (see below)

      Qusetion #3 Is hard to answer, it is relative to each individual, if you have history of health issues or know that your family health history shows early passing, then taking CPP at 60 my make more sense, but in most cases waiting until 70 pays off.

      We need to look at CPP as an insurance plan, where the benefit to you is greater the longer you live, it is guaranteed and is indexed, so you can trade it off as a fixed asset against any savings you have (RRSP, TFSA or other savings) it will always payout and increase as you age. If either one of you pass early the CPP/government is the one who wins, all future CPP money is put back into the pool of funds for present and future recipients.

      So an example of a survivor benefit calculation is as follows: Joe gets a Basic Retirement Pension BRP of $14,000 and Jane has a basic retirement pension of $9,600 (BRP is calculated as if they were 65)
      Rule 1 A single person cannot receive more than the maximum CPP allowed which is $14,445 So to get the actual survivor pension, we need to determine the following A,B and C calculations and take the lesser of them.
      A= (60% of Joe’s-BRP) – (40% of 60% of Joe’s BRP) = $5040
      B= (60% of Joe’s-BRP) – (40% of Jane’s BRP) = $4560
      take the lesser of the above to and compare to C below,
      C= (Joe’s-BRP – Jane’s-BRP) = $4400
      C is lower, so the survivor benefit is $4400.
      Basically the survivor get’s no more than the spouses enhanced benefit which again is not the Max possible CPP in the above scenario.
      Now if the difference between spouses pensions were larger the A and B calculations would be the smaller values and they would be chosen to become the survivor benefit again reducing the pension to no more that Max CPP.

      • Myles on August 9, 2021 at 4:44 pm

        Thank you Macgyver.

        But does CPP make it clear, before a decision is made to defer taking the pension, the consequences of a spouse’s premature, unexpected or sudden death – specially the unrecoverable loss of income?.

        If this is explained, perhaps yiy can provide the link?

        Thank you

  36. MacGyver on August 13, 2021 at 12:37 pm
    • Davey Boy on May 11, 2022 at 11:34 pm

      The enhanced CPP starts to kick in at 2024-2025 so the max in 2030 is estimated at $1,600 a month vs 1,200 in 2021. So, if you turn 70 in 2030, is it correct that your benefit could be 1.42% time the est $1,600? Also for married couples worried about drawing down RRSP while waiting for CPP at age 70, you can keep paying into a life insurance policy for your spouse in case you die and your RRSP is drawn down and the CPP survivor benefit is not enough. A life insurance policy can make up the shortfall.

  37. RJ67 on June 6, 2022 at 9:31 am

    My wife passed away age 61 recently, very suddenly, no previous history of what happened to her, so it does happen. The percentages may be with us but there are no guarantees. Aging is a funny thing too, this sunny life of vacations and leisure that people like me are supposed to be getting is a myth. Lots of food for thought on your site, just discovered it.

  38. Garth on September 11, 2022 at 12:11 pm

    I think that many are focused on the “probability” of living to a certain age, but instead should be looking at the “possibility” of living to a ripe old age. Even if that possibility is relatively small, it needs to be planned for and is where deferring CPP & OAS really shines.

    • Garth on September 11, 2022 at 12:17 pm

      The other concept that took me a long time to fully appreciate is…

      Deferring CPP & OAS allows one to “SAFELY SPEND MORE” in retirement for as long as you live no matter at what age you begin to decumulate. The caveat is that you need enough of a nest egg to bridge the deferral period.

  39. John Copp on September 12, 2022 at 9:01 am

    I turn 70 November 6th of this year. Should I start receiving CPP and OAS in November or December to recieve maximum benefit?

  40. kevin on September 25, 2022 at 8:34 am

    I just found out about the WEP affecting my social security. Therefore I will start drawing social security in January when I am 66 and 4 months and draw my CPP at age 70 and thus not be affected by the WEP for the first four years. Question: is there a proposal before the government to extend the age from 70 to a later age so that I can maximize my CPP? My social security will be enough to live on and I would like to maximize my CPP as it will be under $1,000.00 Canadian.

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