When Should You Take Your Canada Pension? Canada 150 Recommendation #30

Saturday’s= Retirement

I have other recommendations in this series about when to take Old Age Security payments and some of the same issues apply to Canada Pension (CPP).

CPP is paid to individuals who are at least 60 years of age and have contributed to the program during their working years. Only employees are eligible to contribute to the plan and only based on their earnings. Self-employed people contribute as well, and they pay both the employee and the employer share.

The decision about when to take the CPP can be answered best if you know how long you are going to live (accounting humour).

If you wait to take your CPP you will get more money per month. You will receive these payments for every month that you are alive.

If you decide to wait until you are 65 to take the CPP and you die at age 66 you had the wrong strategy. You could have received a lower monthly payment every month from when you turned 60. You missed out on 5 years of monthly payments because you waited. The other extreme would be if you live to be 100. Waiting until you are 70 to take your CPP would result in larger monthly payments for 30 years. You were wise to wait.

The decision about when to take CPP should be made as a part of your overall retirement strategy. You should be talking to your financial advisors.

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