CPP retirement pension: When to start your pension (2024)

FAQs

CPP retirement pension: When to start your pension? ›

The standard age to start the pension is 65. However, you can start receiving it as early as age 60 or as late as age 70. If you start receiving your pension earlier, the monthly amount you'll receive will be smaller. If you decide to start later, you'll receive a larger monthly amount.

Taking CPP/QPP at 65

If you need the money, there's no penalty to start CPP/QPP payments when you turn 65. Your payments can't be reduced based on your income level, and you may even share CPP/QPP income with your spouse or common-law partner to help reduce your family's tax bill.

You can start your retirement benefit at any point from age 62 up until age 70. Your benefit will be higher the longer you delay your start date. This adjustment is usually permanent. It sets the base for the benefits you'll get for the rest of your life.

If you lived and worked in Canada and in another country, you may qualify to receive both a CPP retirement pension and a pension from the other country. Canada has international social security agreements with a number of countries.

For 2024, the maximum monthly amount you could receive if you start your pension at age 65 is $1,364.60. The average monthly amount paid for a new retirement pension (at age 65) in April 2024 was $816.52. Your situation will determine how much you'll receive up to the maximum.

You can't “withdraw” from CPP either. No to both. If you ever return to Canada in the future and retire, you can get a retirement benefit based on the amount you contributed to CPP.

The Canada Pension Plan (CPP) survivor's pension is a monthly payment paid to the legal spouse or common-law partner of the deceased contributor.

Required beginning dates are set by Congress and enforced under Internal Revenue Service (IRS) rules. Your required beginning date depends on the year you were born. You must start your benefit by April 1 of the year following the year when you reach age: 70 ½, if you were born on or before June 30, 1949.

When should you start saving into a pension? It's best to start saving into a pension as early as you can, to maximise your retirement fund. Someone who starts in their 20s will have to put aside a much smaller proportion of their earnings to build the same pot as someone who starts saving in their 40s.

It's often 60 or 65. If you have a personal pension, you usually choose the date when you think you'll want to start taking benefits when you set it up. This is usually referred to as your selected retirement date. You don't have to access your pension when you reach this age.

Do I have to declare my Canada-Canada pension on my US taxes? ›

According to the IRS, special tax treatment applies to payments received from the Canadian pension, the Quebec pension plan, and the Old Age Security plan. If you are a resident of the United States, these retirement benefits are treated as US social security payments for tax purposes.

You can apply for Canadian benefits (OAS, CPP or QPP) at any U.S. Social Security office by completing application form CDN-USA 1 (for OAS and CPP benefits) or QUE/USA-1 (for QPP benefits). Contact any Canadian or Quebec Social Security office.

Year's Maximum Pensionable Earnings under CPP for 2024 increases to $68,500 from $66,600 in 2023. The Canada Revenue Agency has announced that the Year's Maximum Pensionable Earnings under the Canada Pension Plan (CPP) for 2024 will be $68,500 – up 2.9% from $66,600 in 2023.

Receiving CPP at 60 means giving up 36% of your standard retirement pension. On the other hand, there's an incentive to defer past age 65 to the tune of 0.7% per month, or 8.4% annually. If you wait until age 70 to collect, you can raise your payment by 42%.

The $1,200 extra income for low-income seniors is part of the government's program. This program provides monthly assistance to eligible seniors with low incomes. These benefits are tax-free. They are available to those who qualify for the CPP and OAS.

CPP payments are indexed to inflation, with the latest increase going up by 4.8% in 2024.

Taking Social Security early reduces your benefits, but you'll also receive monthly payments for a longer period of time. On the other hand, taking Social Security later results in fewer checks during your lifetime, but delaying means each check will be larger.

To qualify for the maximum CPP payment, you would need to have made CPP contributions for at least 39 years between ages 18 and 65. You would also need to maximize contributions for the majority of your working years by earning the maximum pensionable earnings amount ($58,700 in 2020).

Employee and employer CPP contribution rates for 2024 remain at 5.95%, and the maximum contribution will be $3,867.50 each—up from $3,754.45 in 2023. The self-employed CPP contribution rate remains at 11.90%, and the maximum contribution will be $7,735.00—up from $7,508.90 in 2023.

The easiest way to boost your CPP pension is to simply delay taking benefits. Each year you go without taking CPP benefits increases your annual amount when you finally take them. For example, each year you delay past age 65 increases your annual CPP by 8.4%.