Choosing when to begin your Canada Pension Plan (CPP) benefits is one of the most important retirement decisions you’ll make. The choice affects how much monthly income you’ll receive — and for how long. While the standard age to start CPP is 65, many Canadians wonder if it’s smarter to begin earlier at 60, or wait as long as age 70. The answer depends on your health, financial needs, life expectancy, and other income sources.
Here’s a detailed breakdown to help you decide what’s right for your situation in 2025 and beyond.
Table of Contents
Starting CPP at Age 60
Pros:
- You start receiving monthly payments earlier, providing immediate financial support.
- Useful if you retire early or have health issues.
- Helpful if you have a shorter life expectancy or limited income sources.
Cons:
- Permanent reduction in benefits: your monthly payment is reduced by 0.6% for every month you take CPP before age 65.
- That’s a total 36% reduction if you start at 60.
- Lower monthly income for life.
Example: If your CPP at 65 would be $1,000/month, starting at 60 would give you about $640/month — permanently.
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Starting CPP at Age 65 (Standard Age)
Pros:
- You receive the full, unreduced CPP benefit based on your contributions.
- A good middle ground if you’re unsure about life expectancy or want to avoid penalties.
Cons:
- You miss out on the increased payments available by delaying beyond age 65.
- If you die earlier than expected, you may not get the most value from the plan.
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Starting CPP at Age 70
Pros:
- Your monthly payments increase by 0.7% per month after age 65, up to 42% more if you delay until 70.
- Ideal for those with longevity in their family, other sources of retirement income, or those working past 65.
Cons:
- You delay income for five years.
- If your life expectancy is below average, you may collect fewer total dollars overall.
Example: That $1,000/month benefit at 65 would become $1,420/month if you wait until 70.
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Factors to Consider When Choosing Your CPP Start Age
- Life Expectancy
- If you expect to live well into your 80s or 90s, delaying CPP can increase your total lifetime benefit.
- Health
- If your health is poor or you have a reduced life expectancy, taking CPP early might make sense.
- Income Needs
- If you need cash flow at 60 and have limited savings, early CPP provides a critical source of income.
- Other Retirement Income Sources
- If you have RRSPs, workplace pensions, or investments, you might delay CPP to maximize lifetime value.
- Work Plans
- If you’re still earning income, starting CPP early may not be tax-efficient and could reduce your OAS due to clawbacks.
- Post-Retirement Benefits (PRB)
- If you keep working while receiving CPP before age 70, you can continue contributing and earn extra benefits.
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Conclusion: The Best Age to Take CPP Depends on You
There is no one-size-fits-all answer. Deciding whether to take CPP at 60, 65, or 70 depends on your personal health, finances, and lifestyle. For those who live long and don’t need immediate income, waiting can significantly increase monthly payments. For others, starting earlier may be necessary or more practical.
Tip: Before deciding, consult with a certified financial planner. They can help you model different scenarios and guide you toward the most financially sound choice based on your retirement goals.
If you’re nearing retirement in 2025, it’s time to think strategically about your CPP and how to make it work best for your future.