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Some things to consider PART II: when to draw CPP!

Canada’s retirement system includes three pillars:

  1. Publicly funded plans administered by the government such as the Canada Pension Plan (CPP), the Quebec Pension Plan (QPP), and Old Age Security (OAS);
  2. Employment-based retirement plans, which are registered plans offered by employers, and can come in the form of Defined Benefit (DB) Pension Plans, Defined Contribution (DC) Pension Plans, Group Registered Retirement Savings Plans (RRSPs) and Deferred Profit Sharing Plans (DPSPs). The Canadian Baptist Pension Plan is one of those plans, and is a DC pension plan; and  
  3. Personal retirement savings in the form of RRPSs and Tax-Free Savings Accounts (TFSAs), or other non-registered accounts.

In addition, for retirees there are also other sources of income, such as income from part-time work, and property income. In this Blog we consider the first pillar and drawing from the Canada Pension Plan. 

First, the basics

You can choose to withdraw your pension from CPP at any time after the first month following your 60th birthday, and before the first month after your 70th birthday. 

  • If you start before age 65, payments will decrease by 0.6% for every month up to a maximum of 36% if you started at age 60.
  • If you start after age 65, payments will increase by 0.7% for every month up to a maximum of 42% if you start at age 70.

Consider taking CPP early (before age 65) if the following applies to you:

  • You need the funds to support your daily living expenses;
  • If you anticipate a shorter life expectancy due to genetics or a serious illness.

Consider delaying CPP past age 65 if the following applies to you:

  • You have alternate sources of retirement income, or plan to work longer than age 65;
  • You are healthy and have a longer life expectancy.

Did you know: 9 out of 10 Canadians take their CPP early?

Club Vita research shows Canadians on average underestimate their life expectancy by four years. With average life expectancy for Canadians being almost 82 years, why do only 5% of Canadians defer to age 65 and fewer than 2% delay until age 70?

Bonnie-Jeanne MacDonald introduced the term Lifetime Loss, in her research paper on how Canadians can get the most from CPP. The Lifetime Loss calculates the total amount of CPP that an individual gives up by starting their payments too early. These forfeited benefits could be the difference between having more options and control over the quality of health care you receive in your elder years. Having more money to decide what type of care you receive, who can provide it and where it can be delivered will drastically improve your quality of life.

While it is certainly difficult to generalize—everyone has their own unique financial situation and circumstances, as well as financial retirement goals—you may want to consider whether delaying your CPP benefits could be beneficial for you.

If you’re not sure where to start...

It’s always a good idea to request your CPP estimate and statement of contributions from Service Canada.

We are here to help, too! Contact us at

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