It’s one of the biggest decisions Canadian retirees face — and getting it wrong can cost you tens of thousands of dollars over your lifetime.
If you’ve spent any time thinking about retirement, you’ve probably wondered when to start taking your Canada Pension Plan benefits. It should be a simple question. You worked, you contributed, the money is there, so why not take it as soon as you can?
The truth is, the timing of your CPP decision is one of the most consequential choices in your entire retirement plan. Take it too early, and you lock in a permanently reduced payment for the rest of your life. Wait too long, and you may leave years of income on the table. The right answer depends on factors that are unique to you — and it’s worth understanding them before you decide.
How CPP timing actually works
First, the mechanics. CPP can be started as early as age 60 or as late as age 70. The standard age most people think of is 65, but that’s simply the midpoint — not necessarily the optimal choice for anyone.
Here’s what the adjustments look like:
- If you take CPP before age 65, your benefit is reduced by 0.6% for every month you collect early. That works out to 7.2% per year. Start at 60, and you’re looking at a permanent 36% reduction from what you would have received at 65.
- If you delay past 65, your benefit increases by 0.7% per month — 8.4% per year. Hold out until 70, and your monthly payment is 42% higher than it would have been at 65.
The difference between taking CPP at 60 versus 70 can be substantial. On a maximum CPP benefit, we’re talking about a gap of nearly $1,000 per month — every month, for the rest of your life.
Source: The Globe and Mail, CPP Benefits at 60 vs 65 Calculator
The breakeven question
The most common way people think about this decision is the breakeven calculation. Simply put: at what age do the higher future payments from delaying outweigh the payments you missed by waiting?
For the comparison between taking CPP at 65 versus 70, the breakeven point typically falls between ages 83 and 85, depending on your specific benefit amount — if you live past that age, which a significant number of Canadians do, delaying to 70 puts more total money in your pocket over your lifetime.
For the comparison between 60 and 65, the math is less favourable for early collection. You receive more payments, but each one is permanently smaller. Breakeven on that decision typically arrives in your mid-70s.
Of course, none of us knows exactly how long we’ll live. That uncertainty is precisely what makes this decision feel so difficult — and why the breakeven calculation alone is never the full story.
When taking CPP early makes sense
There are genuine situations where collecting CPP at 60 or before 65 is the right call — and no one should feel pressured into waiting simply because the math theoretically favours it.
If your health is compromised and your life expectancy is realistically shorter than average, collecting early maximizes the total amount you’re likely to receive. There’s no award for leaving CPP on the table.
If you’ve stopped working and have no other income sources to bridge you through your 60s, CPP may be the most practical option to avoid drawing down your investment portfolio prematurely — especially in the early years of retirement when sequence-of-returns risk is highest.
If your RRSP balance is significant and you’re facing a large RRIF conversion and mandatory withdrawals at 71, collecting CPP early in combination with strategic RRSP melt-down withdrawals can actually reduce your lifetime tax bill — even if the CPP amount is lower.
When delaying to 70 makes sense
For many of our clients — particularly those with strong health, a family history of longevity, and a well-funded portfolio — delaying CPP to 70 is one of the most powerful risk-management tools available.
Here’s a way to think about it: CPP is an inflation-indexed, government-guaranteed income that lasts for the rest of your life, no matter how long that turns out to be. In that sense, it functions like a longevity insurance policy. The later you start, the larger the guaranteed floor becomes.
For clients who are worried about outliving their money — a concern we hear constantly — maximizing CPP provides a larger base of income that never runs out, never depends on market performance, and adjusts with inflation every year. That peace of mind has real value beyond the raw numbers.
If you have sufficient assets to fund your lifestyle in your 60s through portfolio withdrawals or other income sources, delaying CPP while drawing down RRSPs can also create a more tax-efficient retirement overall.
The OAS connection
Your CPP decision doesn’t exist in isolation. Old Age Security adds another layer to consider. OAS begins at 65 by default, but like CPP, it can be deferred — up to age 70 — with a 0.6% monthly increase for every month past 65 you wait, for a maximum boost of 36%.
For higher-income retirees, OAS also comes with a clawback. In 2026, OAS begins to be recovered once individual net income exceeds roughly $95,323, and is fully clawed back around $148,000. If your income in early retirement is elevated — due to RRSP withdrawals, rental income, or other sources — your OAS may be partially or fully clawed back anyway. In that case, deferring OAS while your income is high and collecting it later when your income has settled can make considerable sense.
Source: Government of Canada, Old Age Security pension recovery tax
It’s not a one-size-fits-all decision
One of the most frustrating things about the CPP timing debate is how often it gets reduced to a single universal recommendation. “Always wait until 70.” “Take it as soon as you can.” Neither of these is universally true.
The right answer for you depends on:
- Your health and family longevity history
- Your other income sources and how they’re structured
- Your tax situation today and projected through your 70s and 80s
- Your spouse’s income and CPP entitlements
- Whether you’re still working or fully retired
A proper retirement income plan models all of these variables together. It doesn’t just ask when to take CPP — it asks how CPP timing interacts with RRSP drawdowns, OAS deferral, spousal income splitting, and estate goals to produce the most efficient outcome over your lifetime.
The bottom line
The CPP decision is permanent. Once you start collecting, you can’t go back and change it. That alone is reason enough to think it through carefully before you commit.
If you’re approaching 60 or 65 and haven’t yet had a detailed conversation about CPP timing as part of your broader retirement income strategy, now is the time. The difference between a well-timed decision and a hasty one can be significant — not just in dollars, but in the confidence and security you carry into retirement.
Our team at TMFG works through exactly these kinds of decisions with our clients every day. If you’d like to model out what CPP timing looks like in the context of your full financial picture, we’d be glad to sit down and walk through it with you.
Disclaimer: John Iaconetti is a Financial Advisor with CI Assante Wealth Management Ltd. The opinions expressed are those of the author and not necessarily those of CI Assante Wealth Management Ltd. Please visit www.tmfg.ca to discuss your circumstances prior to acting on the information above. CI Assante Wealth Management Ltd. is a Member of the Canadian Investor Protection Fund and the Canadian Investment Regulatory Organization. Insurance products and services are provided through Assante Estate and Insurance Services Inc.
The case study mentioned in this presentation is provided for illustrative purposes only and does not represent an actual client or an actual client’s experience but rather is meant to provide an example of our process and methodology. The results portrayed are not representative of all of our clients’ experiences.
