Many people realize that they have been contributing to CPP for a good portion of their lives but may not be sure when or how much they’ll receive at retirement. Here are some facts: 1 (Manulife Sep. ’21)
#1 Take CPP early and continue working
- You can collect CPP as early as age 60. However, at age 60, there is a 36% reduction of your CPP
- If you choose to receive your CPP early and continue to work, you are required to contribute to CPP between the ages of 60 and 65. These additional contributions will result in an increased annual pension benefit (known as the post-retirement benefit) equal to 1/40 of the year’s maximum retirement benefit subject to your level of working income
#2 Delay taking CPP and receive more
- If you were to start receiving your CPP retirement pension after age 65, it would be increased by 0.7% per month that you delay taking your CPP pension.
- If you continue to work, between the ages 65 and 70 you will be subject to CPP premiums by default. If you’re currently receiving a CPP retirement pension, you may elect out of paying CPP premiums.
#3 Compare CPP amounts at different ages
- If you’re turning 60 and plan on retiring early, you’ll want to know which option is better: Taking a reduced CPP pension at age 60 or waiting until age 65 to get the full amount
#4 CPP death and survivor benefits
- The CPP death benefit consists of a lump-sum payment up to $2,500 and a survivor’s benefit.
- If a spouse is already receiving a CPP retirement benefit, the maximum monthly amount (retirement plus survivor benefit) can’t exceed the maximum retirement benefit and is adjusted based on the surviving spouse’s age.
Considerations for taking early retirement
1) Have you stopped working?
2) Are you currently receiving a survivor’s benefit?
3) Are you single?
4) Do you have health concerns?
5) Are you healthy and continuing to work?
Please let us know if you require further assistance.
Sincerely,
Mike Busby (1-Jun-23)
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