Thinking about retirement? Chances are you’ve started considering how your Canadian Pension Plan (CPP) can help you achieve your retirement goals. But when should you start collecting your CPP payments? Does it really make a difference if you apply to collect at 60 or 65? Which option makes the most sense for your unique situation?

Read on for an overview of the CPP program, collection options, and how to determine the best choice for your finances, lifestyle, and wellbeing.

What is CPP?

The Canadian Pension Plan (CPP) is a plan that you pay into every time you receive income from employed or self-employed work. If you look at your paystubs, you’ll see a deduction come off of your paycheck each pay period, which contributes to your CPP.

This means if you’ve ever worked in Canada—for yourself or someone else—you have a CPP.

When you turn 60, you can apply to start receiving payments from your CPP, which provides you with a source of income during your retirement years.

There are three options for collecting your CPP:

  • You can start collecting at the minimum age of 60. Your monthly payments will be smaller than if you wait until a later age.
  • The standard age to start collecting is 65. If you wait until that time, your monthly payments will be larger than if you started early.
  • You can defer collecting until as late as age 70. Your monthly payments will be larger still if you wait longer.

How much will my CPP payments be?

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The amount you have in your CPP when you retire is dependent on your earnings throughout your life. Unlike the Old Age Security program, CPP payments are not set amounts paid to each person. The higher your earnings, the more will be in your CPP.

You can get a better idea of how much your payments will be by using the Canadian Retirement Income Calculator.

When should you start collecting your CPP?

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When deciding when to start collecting your CPP payments, you should consider a variety of factors. Here are the most important questions to ask yourself when making this decision:

Do I need the income?

If you’ve turned 60 and are considering collecting your CPP, think about whether you need it right at this moment. If you’ve already retired and don’t have enough income from other sources (spousal income, investments, other pensions etc.) to maintain your current lifestyle, then collecting your CPP early is a good way to make ends meet.

If you can wait another five years, it’s probably a good idea to do so.

Am I still working? When will I retire?

If you’re still working at an age where you’re eligible to receive CPP payments, you should note that you won’t stop contributing to your CPP until you stop working—even if you have started collecting it. You can elect to stop paying into it, but not until after you turn 65.

If you’re self-employed through your own company, you can elect to stop receiving a “wage” from your business and start receiving “dividends” instead. That way you can collect your CPP and income from your business simultaneously. If you’re considering this, we’d be happy to help you get set up. Contact us any time.

Otherwise, it’s best to wait until you’ve stopped working to start collecting CPP.

How long am I likely to live?

For most people, this is nearly impossible to know, and is the most difficult factor in retirement planning.

If you know that you have genetic predispositions to certain illnesses or conditions in old age, it’s important to take that into consideration. If your priority is making the most of the time you have, and taking your CPP early can help you retire earlier and spend more time doing the things you love, then by all means, start collecting at age 60!

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How to collect your CPP payments

Regardless of when you choose to collect your CPP payments, you’ll need to apply in advance of the date you’d like to start collecting. CPP payments are not automatic.

Apply to receive your CPP payments.


If you have questions about your CPP income or other pension plans, or need advice on retirement planning, we’re here to help.

Contact us today.

This post has been prepared for general information purposes. It is not advice. The information presented may not fit your unique situation, please consult one of our trusted business advisors at RHN CPA for further clarification and interpretation of your circumstances.