Take CPP at 60 or 70? The $100,000 Question

The Three Ages of CPP

You can start CPP as early as 60 or as late as 70. Most Canadians choose 65, but the optimal age depends on your health, finances, and other income sources.

The difference between starting at 60 vs. 70 is $1,176/month - over $14,100/year - for life. (Average CPP at 65 for new recipients: $925/month.)

The Breakeven Analysis

Taking CPP early means smaller payments for more years. The breakeven age is when the person who waited has received the same total cumulative amount as the early starter.

After the breakeven age, waiting pays more every year for the rest of your life. And CPP is indexed to inflation, so the gap widens over time.

Arguments for Taking CPP Early (Age 60)

• Health concerns: Shorter life expectancy shifts the math toward early
• Need the income: No other income sources to bridge the gap
• "Bird in the hand": Guaranteed money now vs. risk of not living long enough
• Investment opportunity: If you can invest the early payments at high returns

Arguments for Waiting (Age 65-70)

• Longevity insurance: CPP is indexed to inflation - it's the best annuity money can't buy
• Higher lifetime payout: If you live to average life expectancy (~84 for a 65-year-old), waiting to 70 wins
• Tax efficiency: If you have RRSP/RRIF to draw from, use those first (they don't grow tax-free forever)
• Survivor benefits: A higher CPP means a higher survivor pension for your spouse
• GIS eligibility: If low-income, deferring may optimize GIS in early retirement years

The Hidden Factor: OAS Clawback

If you have a pension + RRIF income that pushes you above $93,454 (2025 income; est. $95,323 for 2026), OAS gets clawed back at 15%. In this case, deferring CPP might increase OAS clawback by adding more income later. Model your full retirement income picture - not just CPP in isolation.

The Optimal Strategy for Many

For healthy Canadians with other retirement savings:

1. Draw down RRSP/RRIF from 60-70 (while you're in a lower bracket)
2. Defer CPP to 70 (to get the permanent 42% boost)
3. Start OAS at 65 or defer to 70 (if income is high enough to trigger clawback, defer)

This "bridge with RRSP" strategy depletes taxable registered accounts first, then replaces them with higher guaranteed indexed income (CPP/OAS) for life.

Bottom Line

If you're healthy and have other income to live on, deferring CPP is one of the best financial decisions you can make. It's a guaranteed, inflation-indexed, 42% raise that lasts for life. But if you need the money or have health concerns, taking it early is rational. Use our calculator to model your specific scenario.