As Canadians approach retirement, determining the best time to start collecting the Canada Pension Plan (CPP) becomes one of the most important financial decisions they’ll make. CPP can start as early as age 60, but waiting until 65 or even delaying until 70 can have a significant impact on both monthly payments and long-term income. The challenge lies in choosing the right age—picking the wrong one could cost you tens of thousands of dollars over the course of retirement.
The stakes are high: starting CPP early might feel like getting a head start, but you might end up with substantially reduced payments for life. On the flip side, delaying could mean higher monthly income, but also risks if health issues or early death shorten the years you’ll actually benefit from those higher payments. With changing life expectancies, personal savings, and financial landscapes, the decision is not one-size-fits-all—and it requires understanding both the math and your own situation.
CPP payment amount by age: A quick comparison
| Start Age | Monthly Benefit (2024 est.) | Annual Amount | Permanent Increase/Reduction |
|---|---|---|---|
| 60 | $758 | $9,096 | Reduced by 36% |
| 65 | $1,184 | $14,208 | Standard amount |
| 70 | $1,679 | $20,148 | Increased by 42% |
Why your CPP start age matters financially
The Canada Pension Plan is designed with flexibility in mind, offering retirees the option to start receiving benefits from age 60 to age 70. But that flexibility comes with permanent financial consequences. Each month you delay from age 60 increases your future monthly benefit. Conversely, taking CPP early means receiving lower monthly payments for the rest of your life.
Start at 60, and your base benefit is reduced by 0.6% for every month before you turn 65—a total of 36% less if you start at the earliest point. Delay until 70, and you receive 0.7% more for every month after 65—adding up to a 42% boost if you wait. Because this decision impacts your monthly income for life, timing it right could mean better cash flow and stronger financial stability in retirement.
The break-even point: When waiting pays off
The main question financial planners get about CPP is: “When does it actually start paying off to wait?” The answer is the break-even point—the age at which the total amount received from starting later surpasses the total amount you would’ve gotten from starting early.
Experts usually cite the break-even point between ages 74 to 76. For example, compare starting CPP at 60 vs. 65: receiving smaller payments five years earlier might put cash in your pocket today, but by around age 75, the larger monthly payments from a delayed start will overtake the early-start total—then continue surpassing it every month after.
“Mathematically, waiting until 70 gives people the highest combined lifetime payout—as long as they live into their 80s.”
— Placeholder, Certified Financial Planner
Longevity, health, and income security all play a part
Aside from crunching the numbers, deciding when to take CPP also depends on highly personal issues: your health, expected lifespan, employment plans, and other income sources. A healthy individual with a family history of longevity might find it advantageous to wait until 70, maximizing lifetime benefit. On the other hand, poor health or lower life expectancy might push someone to start CPP earlier for security and liquidity.
Income needs also influence the timing. If you have other retirement income sources, such as RRSPs, TFSAs, or workplace pensions, delaying CPP can work in your favor by allowing deferred growth and higher guaranteed income later. But if funds are tight at age 60, starting CPP earlier can help fill the gap.
“Income smoothing in your 60s is essential. Ideally, you blend personal withdrawals with delayed government benefits.”
— Placeholder, Retirement Economist
The winners and losers of CPP age choices
| Age Choice | Best For | Potential Downsides |
|---|---|---|
| 60 | Those with shorter life expectancy, financial need, retiring early | Reduced benefit for life, lower lifetime payout if you live long |
| 65 | Average life expectancy, balanced approach, no strong need to rush or delay | Miss out on maximum lifetime CPP value |
| 70 | Healthy individuals, strong finances, planning to live into 80s/90s | Delayed income stream, risk if you die earlier |
How CPP compares at each age over time
Consider how payouts build up over time. Someone starting CPP at 60 gets five additional years of payments compared to someone starting at 65—and ten years more than starting at 70. But by age 76, the 70-year-old likely will have caught up in total dollars.
Over a 25-year retirement, here’s a rough illustration of what recipients could earn in total CPP (assuming no inflation or changes):
- Start at 60: $9,096/year × 25 years = $227,400
- Start at 65: $14,208/year × 20 years = $284,160
- Start at 70: $20,148/year × 15 years = $302,220
It’s clear that the highest payout over a full retirement lifespan usually comes from waiting longer—provided you live well into your 80s or beyond.
Psychological comfort vs. financial optimization
This debate isn’t just about data—it’s also psychological. Many retirees find comfort in starting CPP early. Knowing money is coming in regularly after age 60 can ease the financial anxiety of quitting work. There’s also perceived risk in not getting “your share” if you pass away prematurely.
In contrast, those willing to delay must be comfortable tapping into their own savings early on, and confident in living long enough to enjoy the bigger future payouts.
“There’s an emotional satisfaction tied to unlocking benefits early—even if the financial logic says wait.”
— Placeholder, Retirement Specialist
Smart strategies to make your timing work
The most effective retirement plans often balance early withdrawals from personal assets with delayed CPP collection. For example, using your RRSPs or TFSAs to cover years 60-69 might allow your CPP to grow substantially by age 70—without sacrificing cash flow in the meantime. This strategy also helps reduce overall tax burden in the early retirement years and smooth out income later.
Working part-time during early retirement years is another way to create a cash buffer until CPP kicks in, while also deferring withdrawals from investment accounts and maximizing future government benefits.
“The sweet spot is designing a drawdown plan that supports lifestyle, longevity, and asset preservation.”
— Placeholder, Financial Planner
CPP start date FAQs
Is starting CPP at age 60 always a bad idea?
No. If you’re in poor health, retiring early, or urgently need the income, starting CPP at 60 could be the best option despite the lower monthly benefit.
How much more do I get if I wait until 70?
Delaying CPP to age 70 increases your payments by approximately 42% compared to starting at 65—and nearly double compared to starting at 60.
What’s the breakeven age between starting at 60 vs. 70?
Typically, the breakeven point is reached around age 76 to 78, where the total collected from starting later overtakes what early starters have received.
Can I change my CPP start date after applying?
You can cancel your CPP within 12 months of starting it—once in a lifetime—and repay the benefits received. After that, your choice is permanent.
How does CPP income affect my taxes?
CPP payments are taxable income. Integrating CPP smartly into your broader withdrawal strategy can help reduce taxes over retirement.
Should couples stagger their start dates?
Yes, couples can benefit from staggered strategies—one spouse starts early, the other delays—balancing current cash flow with long-term security.