Deciding when to start collecting your Canada Pension Plan (CPP) benefits is one of the most important financial decisions you’ll make as you approach retirement. The choice between starting at age 60, waiting until the standard age of 65, or deferring all the way to 70 can significantly impact how much monthly income you receive—and for how long. Each option comes with advantages and trade-offs that will affect your lifestyle, tax liability, and long-term financial security.
With Canadians living longer and healthier lives, the decision to delay or accelerate CPP payments isn’t just about dollars—it’s about matching your financial choices to your personal goals, health status, and vision for retirement. Whether you’re planning to travel, start a passion project, or simply ensure you don’t outlive your savings, understanding how CPP calculation works and what the numbers look like at different claim ages can help you maximize benefits in alignment with your retirement strategy.
CPP Timing at a Glance: Overview of Benefits by Age
| Age You Start CPP | Monthly Benefit Adjustment | Pros | Cons |
|---|---|---|---|
| 60 | -36% (early reduction of 0.6% per month) | Access cash flow earlier; may help if retiring early or in poor health | Permanently reduced benefits; lower lifetime payout if you live long |
| 65 | Base amount | Standard full benefit; default retirement age for most | Misses boost from delaying; may not optimize lifetime income |
| 70 | +42% (increase of 0.7% per month) | Maximum monthly benefit; best for longevity and strong financial security | No payments until 70; requires other income sources until then |
How the CPP calculation really works
The Canada Pension Plan benefit is based primarily on how much you’ve contributed over your working life and at what age you decide to begin collecting. The **maximum monthly amount** for someone starting benefits at age 65 in 2024 is $1,364.60, but the average recipient gets significantly less—around $758.32—because most people don’t contribute the maximum amount for decades.
If you take CPP early at 60, your monthly benefit is permanently reduced by 0.6% for each month before your 65th birthday. That totals a 36% reduction. On the other hand, if you wait until age 70, your benefit increases by 0.7% per month, or 42% more than taking it at 65. That means waiting five years can yield thousands more in annual income—but also delays when you actually start receiving anything.
When early CPP could make sense
Starting CPP at age 60 can make financial sense for certain groups of Canadians. Those with shorter life expectancy due to health conditions or family history may benefit more from earlier access. It can also be a smart move if you plan to reduce work hours or fully retire early and need the income boost now. In these cases, a lower monthly benefit for a longer period might outweigh a slightly higher benefit accrued by waiting.
“If you need CPP to make ends meet or are concerned about your health, it’s absolutely valid to start earlier to enjoy those funds while you can.”
— Jane Foster, Certified Retirement Planner
Additionally, some Canadians may purposefully front-load their retirement income by combining early CPP with investments or RRSP withdrawals, aiming to reduce the *tax bite* from drawing everything at once later in life.
Why waiting until 70 can be a big win
Most Canadians continue to take CPP at 60 or 65, but that may be a missed opportunity. Deferring until 70 is often the optimal strategy for Canadians in good health with enough savings to bridge the five-year gap. The *guaranteed 42% increase* in monthly benefits is equivalent to outperforming most investment returns, tax-free and risk-free. Plus, the longer you live, the more that deferred claim pays off.
“The numbers clearly favour delaying CPP if you have the means. It acts like a low-risk annuity, which is incredibly valuable in volatile markets.”
— Michael Lam, Wealth Management Advisor
It’s also ideal for Canadians without employer pensions, who might otherwise exhaust their investments early. By holding out until 70, you secure a higher base of predictable, inflation-adjusted income that lasts for life.
Balancing CPP with other income sources
Your decision should also take into account your other income assets—like RRSPs, TFSAs, investment properties, or employer pensions. Ideally, CPP should be viewed as just one pillar in a diversified retirement strategy. Those with flexible income sources may choose to delay CPP to maximize its longevity insurance benefits, while drawing from taxable or liquid savings in the interim.
A key consideration is the required minimum withdrawal age for RRIFs (age 72), which could push you into a higher tax bracket later. Strategic planning around income layering, especially between ages 60–70, can lead to substantial tax savings and a smoother retirement cash flow.
Key scenarios of winners and losers by CPP age
| Scenario | Best CPP Age | Why |
|---|---|---|
| Excellent health, strong savings | 70 | Maximizes guaranteed lifetime income and delays tax exposure |
| Poor health, no other income | 60 | Access money when it’s needed and most useful |
| Adequate savings, retiring at 65 | 65 | Simplifies planning with full benefit at retirement milestone |
| No employer pension, longevity in family | 70 | Builds inflation-protected income base for life longevity hedge |
| Working part-time after 60 | Depends | May want to delay CPP if you still earn enough through employment |
The break-even point: how long do you have to live?
One useful way to think about CPP timing is calculating the break-even age—the point where the total benefits from delaying surpass the cumulative payments you’d receive by starting early.
Roughly speaking, if you start CPP at 60 instead of 65, you’ll come out ahead only if you pass away before age 74. After that, the higher monthly payments from starting at 65 yield more overall income. Waiting until 70 pushes that break-even age further—to around age 81 or 82. If you live well into your 80s or beyond, delaying is a clear winner.
How inflation links to your CPP payment
CPP payments are indexed to the Consumer Price Index (CPI), meaning your monthly benefit will increase each January to keep up with inflation. This inflation protection adds even more value to delayed benefits, since a 42% higher base at age 70 also compounds more powerfully over time. In an era of sticky inflation, every dollar of indexed income is critical for preserving purchasing power late into retirement.
Which age is right for you?
The “best” CPP claim age isn’t a one-size-fits-all answer. It depends on your personal health, life expectancy outlook, financial needs, and retirement goals. For some, the peace of mind from accessing benefits early outweighs any long-term tradeoff. For others, a delay until 70 offers unmatched security and income efficiency.
“You should personalize your CPP timing the same way you’d plan for an investment—it needs to reflect your life, timeline, and risk tolerance.”
— Angela Kim, Financial Educator
If you’re unsure, a hybrid approach could work: one spouse claiming early and the other delaying maximizes household flexibility and balances lifetime benefits.
Frequently Asked Questions
Can I change my CPP start date after applying?
Unfortunately, once CPP payments begin, you cannot retroactively change your start date. Carefully plan ahead before submitting your application.
What is the maximum CPP benefit in 2024?
For someone starting CPP at age 65 in 2024, the maximum monthly payment is $1,364.60. However, most people receive less.
Can I work while collecting CPP?
Yes, you can work and collect CPP at the same time. If under 70, you may also continue contributing to CPP and receive post-retirement benefits.
Is my CPP benefit taxed?
Yes, CPP is considered taxable income and must be reported when filing your annual tax return.
Can I split CPP income with my spouse?
Yes. Through pension sharing, CPP income can be split between spouses to reduce overall household tax burden.
How do I apply for CPP?
You can apply online through your My Service Canada Account or by filling out a paper application and sending it by mail.