When it comes to deciding when to start your Canada Pension Plan (CPP) benefits, two major factors collide:
- The Reduction Factor – If you start CPP at 60, your benefits are reduced by 36% compared to waiting until 65.
- Zero-Earning Years Impact – Delaying CPP until 65 after retiring at 60 adds five years of zero earnings to your calculation, which can slightly reduce your final payout.
So, is it better to start collecting CPP at 60 or wait until 65? Let’s break down the numbers and insights from pension consultant Doug Runchey.
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Here Are Two Ways to Maximize Your CPP in 2025 at Age 70.
1. Delay Your CPP Until 65
One effective way to increase your Canada Pension Plan (CPP) benefits is to wait until at least age 65 before starting your payments. By delaying your benefits, you avoid early reduction penalties and receive a higher monthly payout.
2. Postpone Your CPP Until 70
For even greater benefits, consider deferring your CPP until the age of 70. By waiting, you maximize your pension amount, receiving significantly higher monthly payments for the rest of your retirement. This strategy can provide long-term financial security and ensure you get the most from your CPP.
How Delaying CPP Impacts Your Benefits
Runchey’s analysis shows that delaying CPP from 60 to 65—even if you have zero income during this period—will increase your monthly benefit by 39% to 56%.
For example, if your Statement of Contributions (SOC) at age 60 estimates a benefit of $1,000 per month at 65, taking it early at 60 would reduce it to $640 per month.
If you retire at 60 but wait until 65 to claim CPP, five additional zero-earning years are factored into the calculation, slightly reducing the projected $1,000 to $893 per month. However, even with this adjustment, delaying CPP until 65 results in a much higher monthly payout than taking it early at 60.
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Understanding the Break-Even Age
A key consideration in this decision is your break-even age—the point at which the total amount received by delaying CPP surpasses what you would have received by starting earlier.
- Taking CPP at 60: $640/month for 18 years = $138,240 by age 78
- Taking CPP at 65: $893/month for 13 years = $139,308 by age 78
- Taking CPP at 70: $1,268/month for 8 years = $182,592 by age 82
If you live past your break-even age, delaying CPP is the more financially beneficial choice.
What If You Delay CPP Until 70?
If you delay even further and start CPP at 70, your benefits will increase significantly. Using the same example, Runchey calculates a monthly payout of $1,268 at 70, with a break-even age of 82.
Does Your Retirement Age Affect This Decision?
Runchey emphasizes that your retirement age—whether it’s 55, 50, or even earlier—does not change the fundamental benefits of delaying CPP. The percentage increase remains consistent at 39% to 56%, making waiting until 65 a solid financial move for most retirees.
When Taking CPP at 60 Makes Sense
Despite the advantages of waiting, starting CPP at 60 may be the right choice if:
- You have health issues that could shorten your retirement years.
- You need immediate income and cannot afford to wait.
- You have alternative investment strategies that outweigh the benefits of delaying CPP.
The Bottom Line: Should You Delay CPP?
If you have the financial flexibility to wait, delaying CPP until 65 or even 70 can significantly increase your monthly benefits and provide long-term financial security. However, if you need the funds earlier or have health concerns, taking CPP at 60 may still be a wise choice.
Key Takeaway: The longer you wait, the more you gain—but your personal financial situation and life expectancy should guide your decision.