Pension from the Canada Pension Plan CPP 

When should you expect to start receiving your retirement pension payments?

The standard retirement age is 65 years old, at which point you can begin receiving your pension. The benefits can be started as early as 60 years old and as late as 70 years old, depending on your individual circumstances.

If you begin receiving your pension payments sooner rather than later, the amount you will receive each month will be less than it would otherwise be. A higher monthly payment will result as a result of the increased interest rate if you begin later in the process.

There is no advantage to delaying the receipt of the pension until after the age of seventy-five. When you reach the age of 70, the amount of money you can receive in a month is reduced to the absolute minimum.

Request payment for services that have already been performed.

After reaching the age of 65, you may be eligible for retroactive payments totaling up to 11 months if you apply for the Canada Pension Plan (CPP) retirement pension. You will receive a monthly benefit amount that is determined by the date you choose to begin receiving your benefit. It is not possible to receive a CPP retirement pension before reaching the age of 65 because there will be no retroactive payments made.

Should you put off collecting CPP benefits until later in life?

The amount of your pension is influenced by your age. For example:

It is not necessary to begin before the age of 65 to see a reduction in your monthly payments of 0.6 percent per month (or 7.2 percent per year), with a maximum reduction of 36% if you begin before the age of 60.

Starting after age 65, payments will increase by 0.7 percent per month (or by 8.4 percent per year), with a maximum increase of 42 percent if you begin at age 70. If you begin before age 65, payments will increase by 0.7 percent per month (or by 8.4 percent per year). Beginning before the age of 65, payments will increase by 0.7 percent per month (or by 8.4 percent per year) to account for inflation (or after).

Make sure to take into account your own personal circumstances.

When determining when you will begin receiving your CPP retirement pension, you should take a number of factors into consideration. You should consider your physical and mental well-being, as well as your financial situation and retirement plans.

In the event that you are in good health and anticipate living a long life, or if you have other sources of income, you may be able to postpone receiving your CPP retirement pension. Your monthly pension will increase as a result, which may help to ensure that you do not outlive your retirement income.

Receiving your pension before reaching the age of 65 may be a good option for those who would prefer to work less or who require the money now to pay off debts or fund retirement accounts. In turn, you’ll pay less money each month, which can help you meet your immediate financial obligations, especially if you have little or no other source of income.

The Canadian Retirement Income Calculator can also assist you in gaining a better understanding of your financial security in retirement by calculating your expected retirement income.

For more information please contact Bomcas Canada Accounting and Tax Services