When a client approaches 60 we review their situation and determine whether taking CPP early or not makes sense. Here are some of the items we discuss:

 

If we take CPP at 60 the amount collected will be 36% less than if it was taken at 65.  Assuming they are eligible for the maximum amount at 65 ($1114.17) that would mean at 60 they would instead receive $713.06 (36% less than $1114.17).

 

Crossover point

We then look so see at what point the taking CPP at 65 scenario would have resulted in more money being collected. That crossover point usually occurs around age 77.

 

Health

If you choose the CPP at 65 years of age option and you live past 77 you will have collected more CPP than the CPP at 60 option.  However will you be healthy enough to enjoy the extra money? Or would you rather receive the money now when you might be healthier and better able to enjoy it?

 

Estate value

If a Canadian were to wait until 65 to collect CPP and passed away before the first cheque arrives then what happens?

 

A $2500 death benefit is paid out to the estate.  If there is no surviving spouse then the CPP payments cease.

 

If the surviving spouse is already collecting the max CPP then there is no further payments from CPP.

 

If the spouse has no CPP then the survivor would receive 60% of the CPP of the deceased but the combined CPP cannot be more than the max CPP benefit for one individual ($1114.17).

 

Everyone’s situation is different and we will review each case to help you decide what is best for your unique situation. 

 

For more on CPP visit:

https://www.canada.ca/en/services/benefits/publicpensions/cpp.html