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March 2013



When should I start receiving CPP?

That really is the “64-Thousand-Dollar” question. The recent changes to the Canada Pension Plan may make the decision a bit more difficult. There’s more to consider:

Early CPP
-You can start collecting a CPP retirement benefit as early as age 60. For each month early, you will give up .6% of the age 65 benefit (starting in 2016, .56% in 2014). So, if you start receiving the benefit in the month you turn age 60, you will only receive 64% of the amount you would have received if you were 65. Additionally, if you are still working, you will have to continue making CPP contributions which are matched by your employer (or double the individual amount if you are self-employed). The contribution rate is 9.9% (4.95% each) of income over $3,500 to a maximum, for 2014, of $4,851.

Late CPP
- Delaying your CPP benefits beyond age 65 gets you .7% more for each month delayed up to age 70. Contributions are optional until age 70 if still working after age 65 and receiving a retirement benefit. This contributes to the Post-Retirement Benefit (PRB). Contributions to the PRB are mandatory between age 60 and 65 if working and receiving a CPP retirement benefit.

Okay, so you will have to give something up to receive CPP retirement benefits early and you will gain something if you delay the benefits until up to age 70. On the surface, it may look like a bad deal to take CPP early because you have to continue contributions Spacer if you are still working. Because each situation is unique, serious thought should be put into the decision of when to start receiving CPP. You may want to consider:

  • Debt - Recent news items indicate that personal debt in Canada is at an all time high. A significant percentage of Canadians approaching retirement expect to still be servicing debt in their retirement years. It may make sense to take CPP early and apply the payments toward the debt in order to significantly reduce it, better yet eliminate it, before leaving the workforce.

  • Early Retirement - Taking the retirement benefit early may allow you to retire sooner than originally planned. Take a close look at your income needs to see if this is possible.

  • Health - If there are any life shortening health issues, it may be beneficial to take CPP income early and put it into other savings. If death occurs much sooner than average life expectancy, at least the income was received.

Plan for retirement – because it’s the right thing to do.

Call Hans Mathisen today at (306)242-7042.
or email -


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