Take CPP at 60, 65, or 70 Most Canadians Choose Wrong and Lose $85,000 Over Their Lifetime!

Ajouté : 2026-06-01

[00:00:00]He took CPP at 60, retired early from a physically demanding job, needed the income to bridge the gap until his workplace pension started at 65, and figured he'd rather have the money now than wait. His monthly CPP payment at age 60 was $673.

[00:00:16]If he had waited until 65, it would have been $1,51.

[00:00:20]If he had waited until 70, it would have been $1,492.

[00:00:25]That difference, $673 versus $1,492, is $819 per month. Over 25 years, assuming he lives to 85, that's nearly $246,000 in total benefits he won't receive because he started at 60 instead of 70.

[00:00:43]He didn't know that when he applied. He thought starting early meant getting more money overall because he'd be collecting for more years. He was wrong.

[00:00:50]And he's not alone. I spent 28 years inside the Canada Revenue Agency. Most of that time working with pension and retirement income files. I've sat across from hundreds of people who made the CPP timing decision based on assumptions, gut feelings, or advice from someone who didn't run the actual numbers. The decision to take CPP at 60, 65, or 70 is one of the most important financial choices you'll make in retirement. Get it wrong and it can cost you tens of thousands of dollars over your lifetime.

[00:01:19]get it right and it's one of the most powerful tools you have to secure your income for the rest of your life. So, let me walk you through the real math, the break even points, and the five factors that should determine when you apply. Let's start with how CPP actually works because understanding the structure is the only way to see why timing matters so much. The Canada Pension Plan is a contributory pension.

[00:01:40]You pay into it while you're working, and the amount you receive in retirement is based on how much you contributed and for how many years. The maximum monthly CPP payment at age 65 for 2024 is approximately $1,364.

[00:01:55]Most people don't receive the maximum because they didn't contribute the maximum amount for the full 39 years between age 18 and 65. The average CPP payment is closer to $815 per month. You can start CPP as early as age 60 or as late as age 70. If you start before 65, your payment is reduced by 0.6% 6% for every month you take it early. If you start after 65, your payment increases by 0.7% for every month you delay. Let me show you what that looks like in real dollars. If your CPP at age 65 would be $1,000 per month, here's what you'd receive at different ages. At 60, 5 years early, your payment is reduced by 36%. You receive $640 per month. At 65, you receive the full $1,000 per month.

[00:02:44]At 70, 5 years late, your payment is increased by 42%. You receive $1,420 per month. Those percentages are permanent. If you start at 60, you receive 36% less every single month for the rest of your life. If you wait until 70, you receive 42% more every single month forever. The payment increases with inflation every year, but the percentage difference stays the same.

[00:03:09]Now, here's the question everyone asks.

[00:03:11]If I take it early, I get more years of payments. Doesn't that make up for the smaller amount? Sometimes, but not as often as people think. The break even point is the age at which the total amount you've received by starting early equals the total amount you would have received by waiting. Let me run the math for someone deciding between age 60 and age 65. At 60, you receive $640 per month. Over five years from 60 to 65, you collect $38,400 before the age 65 person gets their first payment. At 65, the person who waited starts collecting $1,000 per month. That's $360 more per month than you to make up the $38,400 you collected early. It takes them about 107 months or just under 9 years. The break even age is roughly 74. If you live past 74, the person who waited until 65 will have collected more total money than you. If you die before 74, you come out ahead by starting at 60.

[00:04:12]Now, let's compare age 65 versus age 70.

[00:04:15]At 65, you receive $1,000 per month.

[00:04:18]Over 5 years, you collect $60,000 before the age 70 person starts. At 70, the person who waited receives $1,420 per month. That's $420 more per month than you. To make up your $60,000 head start, it takes them about 143 months or just under 12 years. The break even age is roughly 82. If you live past 82, the person who waited until 70 collects more. If you die before 82, starting at 65 was better. Here's the reality.

[00:04:49]According to Statistics Canada, the average life expectancy for a 65-year-old man in Canada is about 84.

[00:04:56]For a 65year-old woman, it's about 87.

[00:05:00]That means on average waiting until 70 results in higher total lifetime benefits than starting at 65. And starting at 65 results in higher total benefits than starting at 60. But averages don't tell you what will happen to you. Your health, your family history, and your financial situation all matter. So, let me give you the five factors you should actually consider when deciding. First, your health. If you have a serious health condition that significantly shortens your life expectancy, taking CPP early makes sense. If you're unlikely to live past 75, starting at 60 or 65 means you'll collect more total money than if you wait. But be honest with yourself about this. A lot of people overestimate their health risks. Having high blood pressure or being overweight doesn't mean you'll die at 72. Unless you have a terminal diagnosis or a condition that genuinely limits your life expectancy, assume you'll live to at least the average. And if you're in good health, assume you'll live longer than the average. Waiting pays off for people who live into their 80s and beyond. Second, your other sources of income. If you're still working or if you have other income that covers your expenses, you don't need CPP at 60. Delaying it means you get a higher payment later when you might need it more. But if you retire at 60 and you have no other income, waiting until 65 or 70 might not be realistic. You need money to live. The question is whether you can cover your expenses from savings, a workplace pension, or part-time work until CPP starts.

[00:06:28]I sat with a man during my time at Service Canada who retired at 62. He had $120,000 in savings and a small workplace pension of $18,000 per year.

[00:06:40]He wanted to know whether he should start CPP at 62 or wait until 65. We ran the numbers. If he started at 62, his CPP would be about $750 per month.

[00:06:51]Combined with his pension, his total income would be $27,000 per year. If he waited until 65, he'd have to draw about $9,000 per year from his savings to make up the difference. Over three years, that's $27,000 out of his savings. But by waiting, his CPP at 65 would be $980 per month instead of $750.

[00:07:14]That's an extra $230 per month for life or $2,760 per year. The $27,000 he spent from savings would be recovered in less than 10 years. And from age 75 onward, he'd be ahead. He decided to wait. 3 years later, he told me it was the best financial decision he'd made. Third, whether you're still working. If you're working and earning income after age 60, starting CPP early might not make sense for two reasons. One, you don't need the income yet. Two, CPP is taxable. Adding CPP to your employment income could push you into a higher tax bracket. Let's say you're 62, still working part-time, earning $35,000 a year. If you start CPP, you add another $9,000 to your income. Your total is now $44,000.

[00:08:02]You're paying tax on that CPP at your marginal rate, which could be 20% to 30% depending on your province. If you wait until you stop working and your income drops, that same CPP is taxed at a lower rate or potentially not taxed at all if you stay within your personal allowance.

[00:08:18]Delaying CPP while you're still earning makes sense for most people. Fourth, your financial need. Some people genuinely need the money at 60. They don't have savings. They don't have a pension. They need CPP to pay rent and buy groceries. If that's your situation, take it. A smaller payment now is better than no payment and financial stress.

[00:08:36]But if you're taking it early because you want to travel, buy a car, or fund a lifestyle upgrade, think carefully. That decision locks you into a 36% smaller payment for the rest of your life. If you can delay, even by a few years, the increase in your payment might fund that same lifestyle later without the permanent reduction. Fifth, longevity in your family. Look at your parents, your grandparents, your siblings. How long did they live? If everyone in your family lives into their late 80s or 90s, you should be planning for the same.

[00:09:07]Waiting until 70 makes sense if longevity runs in your family. If your family has a history of early deaths, heart disease, cancer in their 60s or 70s, that's a factor. But again, be realistic. Medical advances mean you're likely to live longer than your parents did. Now, let me tell you about two people I worked with who made very different decisions and why both were right for their situations. The first, a woman who took CPP at 60. She had worked in retail for 40 years, physically demanding, on her feet all day. By 60, her knees and back were done. She couldn't work anymore. She had no workplace pension and about $40,000 in savings. She needed income immediately.

[00:09:47]Taking CPP at 60 gave her $720 per month. It wasn't much, but combined with careful budgeting and some part-time work she could do from home, it was enough. She knew she was taking a reduced payment. She knew if she lived to 85, she'd collect less total money than if she waited. But she didn't have the luxury of waiting. She needed the income at 60, and taking it gave her financial stability. That was the right call. The second, a man who waited until 70. He retired at 63 with a full workplace pension of $52,000 per year.

[00:10:20]He had savings. He had no debt. He didn't need CPP. His plan was to let CPP grow to the maximum and use it as longevity insurance. By waiting until 70, his CPP was $1,510 per month, nearly $500 more per month than if he' taken it at 63. His reasoning was simple. He was healthy.

[00:10:41]His parents both lived into their late 80s. He expected to do the same. By delaying CPP, he maximized his income for the years when his workplace pension might not keep up with inflation and when his savings might run low. At 78, he told me he was glad he waited. His CPP had become his most reliable income source, and the extra $500 per month made a real difference. That was also the right call. The point is, there's no universal answer. The right age to take CPP depends on your health, your income, your savings, and your family history.

[00:11:13]But here's what I can tell you with certainty. Taking CPP at 60 just because you're eligible, without considering the long-term cost, is almost always a mistake. If you can afford to wait even until 65, you're securing a significantly higher payment for the rest of your life. And if you can wait until 70 and you expect to live into your 80s, you're likely maximizing your total lifetime benefits. Let me show you one more scenario because this is the one that surprises people the most. A couple, both age 64, he has a workplace pension, she doesn't. They're trying to decide when each of them should start CPP. The conventional advice is that they should both start at the same time.

[00:11:52]That's wrong. The optimal strategy for many couples is to have the lower income spouse start CPP early and the higher income spouse delay as long as possible.

[00:12:02]Here's why. CPP has a survivor benefit.

[00:12:05]When one spouse dies, the surviving spouse receives a portion of the deceased spouse's CPP combined with their own up to a maximum. If the higher income spouse delays CPP until 70, their payment is 42% higher. When they die, the surviving spouse inherits that higher benefit. If the lower income spouse starts CPP early, they get income now, and when they die, the higher income spouse isn't losing much because the survivor benefit calculation favors the higher earnner. This strategy maximizes household income while both are alive and maximizes the survivor's income after the first death. It requires planning and it's not right for every couple, but it's worth running the numbers with a financial planner.

[00:12:48]So, here's what I'd suggest you do if you're approaching the CPP decision.

[00:12:53]First, request your CPP statement of contributions from Service Canada. It shows your estimated monthly payment at age 60, 65, and 70. You can get it online through my Service Canada account or by calling 1-800-277-9914.

[00:13:11]That statement gives you the real numbers for your situation, not estimates. Second, calculate your break even age for each option. If you're deciding between 60 and 65, figure out how long you'd need to live for the age 65 payment to result in more total money. Do the same for 65 versus 70.

[00:13:28]Third, look at your other income sources. Do you have a workplace pension, savings, RRSP, or RRIF? Can you cover your expenses without CPP for a few more years? If yes, delaying is almost always better. Fourth, be honest about your health and your family history. If you have serious health issues or a family history of early death, starting earlier makes sense. If you're healthy and longevity runs in your family, delay. And fifth, talk to a financial planner, not someone trying to sell you something. A fee only planner who can run the numbers for your specific situation and show you the impact of starting at different ages.

[00:14:05]The CPP timing decision is permanent.

[00:14:07]Once you start, you can't change your mind. You can't stop it and restart it later at a higher amount. The age you choose locks in your payment level for life. I should say clearly, I'm a retired civil servant, not a licensed financial planner. For your specific situation, consult a regulated adviser.

[00:14:24]What I've given you here is the framework, the math, and the factors that matter. The man I mentioned at the start, the one who took CPP at 60, is now 68. He wishes he had waited. His payment is $673 per month. If he had waited until 65, it would be over $1,000. That difference, $327 per month, is meaningful. It's groceries. It's utilities. It's financial breathing room he doesn't have. He didn't know the math when he applied. Now he does. And he can't undo it. That's why I made this