When Should You Take CPP?

The Three Start Ages — What Each Means

You can start CPP any time between age 60 and 70. The standard age is 65, but starting early or late permanently changes your monthly amount.

The Break-Even Calculation

The break-even age is where the total lifetime payments from two start dates cross over — meaning one choice becomes better than the other only past that age.

Factors That Should Drive Your Decision

Frequently Asked Questions

Break-even is the wrong question for most people

Almost every article on this subject computes a break-even age — roughly the mid-70s for starting at 60 versus 65, and around 82 for deferring to 70 versus 65 — and then tells you to guess your lifespan. That framing quietly treats CPP as an investment to be maximised.

CPP is longevity insurance. It is inflation-indexed and paid for life. The risk it exists to cover is not dying early — it is living a long time and running out of money. That risk peaks at 90, not 70. Insurance is not something you "lose" by not claiming on it, and nobody regrets a larger inflation-protected income at 88.

The right question is usually: what income do I need at 85, and what is the cheapest way to guarantee it? Deferring CPP buys guaranteed indexed income at a rate no annuity on the Canadian market matches. Viewed that way, deferral is often the best-value purchase available to a retiree.

The RRSP drawdown strategy nobody explains

The most valuable move is rarely about CPP in isolation — it is the interaction with RRSPs and OAS. Retire at 65, defer CPP to 70, and spend down your RRSP in those five years. Three things happen at once:

• CPP grows 0.7% per month — a permanent 42% increase by 70.
• RRSP withdrawals happen in low-income years, taxed at a low marginal rate instead of being forced out later at a higher one.
• A smaller RRSP means smaller mandatory RRIF withdrawals after 71, which is the most common cause of triggering the OAS clawback.

The tax saving from the third point alone can exceed the CPP increase. It is also the reason "take CPP early and leave the RRSP invested" is usually backwards: it maximises the account that will be taxed hardest and forcibly withdrawn.

When taking it early is genuinely right

Deferral is not universal advice. Take CPP at or near 60 if:

• You need the income now. A reduced pension you can live on beats a larger one you cannot wait for. Drawing down savings to bridge to 70 only works if the savings exist.
• Your health or family history suggests a shorter horizon. This is the one case where break-even genuinely applies.
• You are receiving GIS or expect to. The interaction is complex and can reverse the usual advice — GIS is reduced by roughly 50 cents per dollar of other income.
• You have stopped working and have low income now but expect higher income later — for instance a pension starting at 65.

Note that taking CPP while still working before 65 means continued contributions, each year earning a Post-Retirement Benefit that permanently raises your pension. Between 65 and 70 you may opt out of contributing.

Before you decide, check three things

1. Your actual contribution record. Log into My Service Canada Account. It shows every year you contributed and gives a real estimate rather than an assumption. Very few people receive the maximum — the average new retirement pension is considerably lower.

2. The child-rearing provision. Months spent as the primary caregiver of a child under seven can be excluded from your contributory period, raising your pension. It is not automatic — you must claim it when you apply. Missing it permanently reduces the pension of many parents, most often mothers.

3. Pension sharing with a spouse. Where one partner's CPP is much larger, sharing can lower a couple's combined tax bill. Apply about six months before you want payments to start — CPP is not automatic, unlike OAS, and payments do not backdate indefinitely.