CPP: Options & Considerations

If you contribute into the Canada Pension Plan (CPP), if eligible the standard age to start receiving CPP is age 65. CPP is adjusted for inflation and guaranteed for life.

Options:

  • Taking CPP Early - The benefit is reduced by 0.6% each month CPP is taken before age 65
  • Deferring CPP - The benefit is increased by 0.7% for each month deferred

Considerations:

  • Cash Flow & Longevity - If you need the income or have health concerns such as shortened life expectancy, some Canadians choose to receive CPP early
  • Taxation & OAS Claw Back - CPP is considered taxable income. If you are age 65, have strong income and are in a high tax bracket, some Canadians choose to defer CPP until a later time which may help avoid OAS claw back