When Should You Start Your CPP?

Deciding when to take your Canada Pension Plan (CPP) is a key piece of your retirement puzzle. You can start collecting CPP as early as age 60 or delay it until as late as age 70. The standard age to begin is 65—but the government allows flexibility to suit your personal financial situation. Starting earlier means a reduced benefit, while delaying increases your monthly income.

Specifically, your CPP is adjusted by 0.6% for every month you take it early (before age 65) and increased by 0.7% for every month you delay (after age 65). That works out to a 7.2% reduction per year if you begin before 65, or an 8.4% increase per year if you wait past 65. Over five years, that’s a 36% reduction if you begin at age 60, or a 42% boost if you wait until 70.

Whether earlier or later is better depends on your health, lifestyle, and income needs.

Here’s what to consider when deciding the right time for you:

Financial Needs: Do you need the income to cover everyday expenses? If your savings are limited or you’re retiring without a workplace pension, starting CPP early might help you maintain your lifestyle. If you’re financially comfortable without CPP income for now, delaying may be more beneficial in the long run.

Income Sources
: Look at your full retirement income picture—this includes RRSPs, pensions, investment income, and even rental income. If you have other steady sources, you might not need CPP right away. Delaying could mean a larger, inflation-adjusted benefit down the road.

Taxes
: CPP is taxable. Adding it on top of other income might bump you into a higher tax bracket. If you’re still working or drawing RRIF income, consider whether it makes sense to wait. On the flip side, starting CPP early could reduce how much you draw from other taxable sources.

Old Age Security (OAS) Clawback
: CPP counts toward your total income for tax purposes—including for Old Age Security (OAS). If your overall income exceeds the OAS clawback threshold, you’ll begin to repay a portion of your OAS—15 cents on every dollar above the limit. Taking CPP later, once your income drops, may help preserve your full OAS.

Life Expectancy
: This is one of the biggest factors. If you expect to live well into your 80s or 90s, delaying CPP may mean more income over time. But if you have health concerns or a shorter life expectancy, taking CPP earlier ensures you receive more payments overall.

Future Earnings (including inheritance, OAS)
: Consider any expected windfalls, such as an inheritance or benefits like OAS. If your income will rise later in retirement, starting CPP early could help you smooth out your income and possibly reduce OAS clawbacks.

What to Consider for Each Start Age

Starting CPP Early (Age 60–64)

You plan to retire early and have no other pension
You want financial freedom for travel or hobbies
You have health concerns or a shorter life expectancy
You need the income now to support retirement
You expect other income later (e.g., inheritance or home sale)
You want to delay RRSP withdrawals to allow more growth

Taking CPP at Age 65

You’re retiring fully and ready for consistent income
You’ve maxed out contributions and see no benefit in delaying
You want the simplicity of the standard age
You’re unsure about your longevity
Your tax situation is stable and fits well with CPP
You’re coordinating benefits with a spouse

Delaying CPP (Age 66–70)

You’re still working and don’t need the extra taxable income
You’re in good health and expect a long retirement
You want to lock in a larger monthly benefit
You want to reduce OAS clawback or smooth taxable income
You want a higher guaranteed income in later years
You’re protecting against outliving your savings

There’s no one-size-fits-all answer. Your decision should reflect your health, lifestyle, financial goals, and peace of mind. Whether you start CPP early, wait until 65, or delay until 70—make sure it aligns with your retirement vision.

Have questions? Let’s talk.

Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Always consult a qualified professional regarding your specific situation. We are not responsible for any actions taken based on this content.

Sources:

Government of Canada. Canada Pension Plan (CPP) – Payment Amounts. https://www.canada.ca/en/services/benefits/publicpensions/cpp/payment-amounts.html

Government of Canada. Old Age Security (OAS) pension. https://www.canada.ca/en/services/benefits/publicpensions/old-age-security/recovery-tax.html