It’s Not a One-Size-Fits-All Answer
Deciding when to take the Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) requires careful consideration so that you can make the most of your retirement benefits.
Take Early, Late or On-Time?
You can receive your full CPP/QPP retirement benefits when you're 65. However, you may want to consider taking payments as early as age 60 or as late as age 70, depending on your lifestyle and income needs in retirement. Keep in mind that once you start receiving the benefit, you can’t change it—so it’s important to make an informed choice.
Taking CPP/QPP Before Age 65
While full CPP/QPP benefits are paid once you turn 65, you can take a reduced payment as early as age 60.
Here’s how your payments will be reduced if you take them before age 65:
| CPP (for provinces outside Quebec) | QPP (for Quebec) |
|---|---|
|
The reduction is 0.5% per month if you are receiving a very small QPP pension but is 0.6% per month if you are receiving the maximum QPP pension. Since the formula for determining the reduction percentage is complex, we recommend that you contact Retraite Quebec or view your Statement of Participation in the QPP online. |
Reasons you may want to consider taking CPP/QPP early:
- You’d like to work fewer hours or leave your job but need income to maintain your lifestyle.
- Your current health or family health history suggest you may have a shortened life expectancy.
Learn More: How Much CPP/QPP Will I Get?
Taking CPP/QPP After Age 65
If you hold off on taking CPP/QPP, you will receive a larger payment. You can wait as late as age 70 to start taking it.
Your benefit will increase by 0.7% for each month you delay receiving your CPP/QPP retirement pension, starting from the month after your 65th birthday.
This means if you begin receiving CPP/QPP in the month after your 70th birthday, your monthly benefit will be 42% higher (the maximum possible increase) than it would have been if you began it at age 65.
The average Canadian who takes CPP at age 70 could receive a benefit that’s $483.16/month1 higher than if they took it at age 60.
Reasons you may want to delay taking CPP/QPP:
- You want to increase your monthly payment.
- You have other sources of income—like a business, rental income, a company pension or investments—that can help you maintain your lifestyle until you start receiving payments.
- You want to continue working at a job that provides sufficient income.
- You are in a higher tax bracket and want to wait until you stop working and move into a lower tax bracket so that you can keep more of your benefit.
- You are healthy and have a longer life expectancy.
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. Remember that your CPP benefits are sheltered from inflation and are guaranteed for the rest of your life.
Not sure what your retirement cash flow will look like? Try our Retirement Budget Calculator.
You Don’t Have to Make the Decision On Your Own
Deciding to take CPP/QPP is a big decision and one that you don’t have to make alone. Start the conversation with an RBC Financial Planner, who can help you determine the best time to take the benefit.
Want to Know More? Get the CPP/QPP Guide
How does my age affect the amount of my payout? Will continuing to work affect my payments? What happens if I'm divorced or widowed?
For answers to these questions and more, download our helpful guide.
Get the Guide
What to Check out Next
How Much CPP/QPP Will I Get?
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Where Will My Retirement Income Come From?
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How to Create a Steady Income in Retirement
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Legal Disclaimer1
As of March 2021, the average monthly CPP benefit at age 65 for new beneficiaries was $619.44 (Canada Pension Plan, Government of Canada). According to the Government of Canada, if you take the CPP retirement pension early, it is reduced by 0.6% for each month you receive it before age 65 (7.2% per year). This means that, an individual who starts receiving their CPP retirement pension at the age of 60 will receive up to 36% less, on a monthly basis, than if they had taken it at 65.
If you take your pension late, your monthly payment amount will increase by 0.7% for each month after the age of 65 that you delay receiving it up to age 70 (8.4% per year). This means that, an individual who starts receiving their retirement pension at the age of 70 will receive up to 42% more, on a monthly basis, than if they had taken it at 65 (Canada Pension Plan, Government of Canada).
Calculations:
(Subject to change as the average monthly CPP benefit, as provided by CPP, Government of Canada, changes)
Average monthly benefit difference if CPP is taken at 60 instead of 70 = ( Average monthly CPP benefit at age 65 x fraction increased if taken at age 70 ) - ( Average monthly CPP benefit at age 65 x fraction reduced if taken at age 60 )
Average monthly benefit difference if CPP is taken at 60 instead of 70 = ($619.44 per month x 1.42 increase) - ($619.44 per month x 0.64 reduction)
Average monthly benefit difference if CPP is taken at 60 instead of 70 = $483.16 per month
