CPP – Did you know you have options regarding when to take your CPP?

February 26, 2021

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There are many factors that influence what your CPP payment will be including:

  • How old you are
  • How much per year and how many years you contributed
  • How much you earned on average during your working life

In 2021, the maximum monthly amount you can receive as a new recipient starting the pension at age 65 is $1,203.75.  As of October 2020, the average monthly CPP amount was $614.21.

Age factor

Choosing to take CPP prior to 65

  • The earliest that CPP can be taken is age 60
  • The monthly benefit is reduced by 0.6% for each month prior to age 65 that benefits begin
  • For example, taking CPP at age 60 would be 60 months prior to age 65 and would result in a decrease to the CPP benefit of 36%

Choosing to take CPP after 65

  • There is no benefit to waiting longer than age 70 to take CPP
  • The monthly benefit is increased by 0.7% for each month after age 65 that benefits begin
  • For example, taking CPP at age 70 would be 60 months after age 65 and would result in an increase to the CPP benefit of 42%

Historical contribution factor

You can log into your My Service Canada Account to get an estimate of what your monthly CPP retirement payments would be.

What if you continue to work after taking CPP?

Age 60 – 65

  • You must continue to contribute to CPP if you are working regardless of whether you are receiving a CPP pension.  These contributions will increase your CPP retirement benefit like your previous years’ earnings.

Age 65 – 70

  • You can choose whether you want to contribute to CPP if you are working.  These contributions will increase your CPP retirement benefit like your previous years’ earnings.
  • If you wish to not contribute, you must elect to stop contributing
  • If you wish to contribute to CPP after previously electing not to, the election can be revoked
  • To make and revoke these elections, Form CPT30, Election to Stop Contributing to the Canada Pension Plan or Revocation of a Prior Election must be filed

For more information, check out the Government of Canada’s CPP information page.

Or contact an advisor at Fulcrum Group to discuss what CPP choices would be best for you!

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