That question

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  By Guest Blogger Sinan Terzioglu
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A question often asked by clients approaching retirement is whether they should start taking CPP benefits at age 60 or delay to age 65 or later. There are many factors to consider when deciding when is the most optimal time. Do you need the funds? How is your health and life expectancy? But for most people it would be best to take CPP as early as possible.

According to government statistics approximately 40% of Canadians choose to begin taking CPP at age 60 and approximately 30% at age of 65. The maximum monthly benefit a new 65-year-old recipient can receive in 2022 is $1,253 but in order to receive this you would need to have contributed to the CPP for at least 39 of the 47 years from ages 18 to 65. Since most do not contribute for that long and/or don’t contribute the annual maximum set by the CRA the average monthly amount received as of April 2022 is $727.

If you decide to take CPP at the age of 60, monthly payments will be reduced by 0.60%  before your 65th birthday. This works out to a reduction of 7.20% per year or a maximum of 36%. If you delay receiving your CPP benefits until age 70, payments will be increased by 0.70% for every month you delay after your 65th birthday. This works out to 8.40% more per year or 42% more. By delaying to age 70, you would get more than double the monthly benefit than what you would receive if you decide to start taking CPP at 60.

From a purely financial standpoint delaying your CPP benefits to age 70 seems to make the most sense but a break-even analysis shows that if you decide to take CPP at age 60 instead of 65 your break-even age is just before you turn 74. For a 65 year old delaying benefits until age 70, the break-even age is around 82. Even if your health, lifestyle and family history are very good and you do not need the money, I think you should still take CPP at age 60 for the following reasons:

1 – Life is Short & Unpredictable

Life expectancy in Canada is now nearly 83 years but the unfortunate reality is some of us will not live that long and many of us will start to experience a decline in our health, physical abilities and energy well before. Even if you believe you will live a long life there is a decent probability that you may not and/or you will experience a decline in your health sooner than expected. If receiving CPP benefits early enables you to have the opportunity to enjoy experiences like travel, taking up new hobbies and/or help others, I think the positive experiences will yield very good returns.

2- Contribute to Tax-Advantaged Accounts

Even if you don’t need the money by taking CPP early you can build up additional financial security by using the funds to contribute to your TFSA. If you don’t own a home you can contribute to a FHSA when they become available or you can help family members contribute to their FHSAs. If you have grandkids you can help contribute to their RESPs so they can benefit from the 20% education grants and have more time to grow the money in a tax deferred account. As Garth says, when the government offers you money, you should take it and with the ability to grow funds tax free in a TFSA and soon a FHSA these opportunities should be taken full advantage of. Contributing $750 a month to your savings ($6,000 annually to a TFSA and $8,000 annually to a FHSA) and earning an average of 6% per year would grow to over $120,000 in 10 years. Having additional liquid and readily available funds in your later years would help provide financial security and help handle unforeseen significant expenses.

3 – You Retired Early & Had Multiple Years of No Contributions

If you retired before the age of 60 then you would not have contributed to CPP for those years so if you take payments at 60, your benefits would be based on your best 35 years of earnings instead of your best 39 years. Therefore, for someone that retired at age 57 delaying to receive CPP at age 65 would result in a lower monthly benefit.

For those that left the workforce to return to school, lost their job or to provide childcare, having the ability to drop these years from the calculation makes a big difference. If you paid into CPP for most of your working years, then started a business later in life and paid yourself in dividends, you would not have paid into the CPP and therefore taking your benefits at age 60 would make the most sense from a financial perspective.

Final Thoughts

Needless to say there are many factors to consider when deciding if taking CPP early makes sense for you. It’s important to keep in mind that once you decide, you cannot pause it or opt out if you change your mind at some point so you should only move forward with taking it when you are absolutely sure it is the best plan for you. Since our time is limited and our quality life can quickly deteriorate in our later years, I think most would gain more from taking CPP early because in the end we can’t take it with us so it’s best to enjoy our time and help others when we can.

Sinan Terzioglu, CFA, CIM, is a financial advisor with Turner Investments, Private Client Group, Raymond James Ltd.  He served as vice-president of RBC Capital markets in New York City and VP with Credit Suisse in Toronto.

 

102 comments ↓

#1 cuke and tomato picker on 08.12.22 at 1:44 pm

TAKE YOUR CANADA PENSION AT 60. I HAVE BEEN COLLECTING IT FOR 19 YEARS 5 MONTHS. SEVEN YEARS
AGO I FOUGHT CANCER AND SO FAR WON. YOU NEVER KNOW WHAT’S AROUND THE CORNER AND YOU HAVE TO KNOW HOW TO MANAGE THE DOWN SIDE BECAUSE THE UPSIDE MANAGES ITSELF. WORK HARD TO ENJOY
LIFE’S UPSIDE.

#2 TurnerNation on 08.12.22 at 2:03 pm

No dogwhistle here. In related news

“Globe says Maple Leaf, Recipe tap into TFW program
The Globe and Mail reports in its Friday, Aug. 12, edition that Canadian employers are moving to fill more jobs with temporary foreign workers, as they face a sustained labour shortage and the lowest unemployment rate in decades. The Globe’s Matt Lundy writes that in the first three months of 2022, employers received approval from the federal government to fill about 44,200 positions through the TFW program….In April, the federal Liberals overhauled the TFW program, largely to give companies more access to low-wage workers from abroad. …Recipe Unlimited, which owns several restaurant chains, is helping franchisees use the TFW program, CEO Frank Hennessey said. “(stockwatch.com)



Our Crowded, Fetid “UN Smart Cities” are breaking under years of brutal Liberal regime rule.

https://www.cbc.ca/news/canada/canada-homeless-tent-encampments-1.6548241
“Across Canada, cities struggle to respond to growing homeless encampments
It’s time to get serious about short- and long-term solutions, former UN special rapporteur says”

——–
Normalcy very soon! March 2020 kicked it all off (Hint check your history books for how this plays out)

https://twitter.com/mindingottawa/status/1557697854700912640
Blacklock’s Reporter
@mindingottawa Alex Graham Bell under review in @ParksCanada historical purge of “colonialism, patriarchy & racism.” Halifax Citadel & Crowsnest Pass are next. https://blacklocks.ca/historical-purge-targets-bell/ #cdnpoli

#3 crowdedelevatorfartz on 08.12.22 at 2:11 pm

I dont need the money and I already max out on all my Registered and TFSA accounts.
I dont need the higher tax bracket earnings.
I’ll wait until 65.
And if I die before 65.
C’est la vie.
Who cares?
I’m dead.

#4 Catalyst on 08.12.22 at 2:18 pm

In your break even analysis, do you consider inflation? I think this is a big advantage of taking early.

#5 wendi1 on 08.12.22 at 2:21 pm

Check your math, Siane:

“Contributing $750 a month to your savings ($6,000 annually to a TFSA and $8,000 annually to a FHSA)”

$500 a month is $6000 a year. $750 a month is $9000 a year. Did you mean contribute $1250 a month to these two accounts? These kinds of errors make the rest of your math suspect.

#6 Ponzius Pilatus on 08.12.22 at 2:23 pm

Two former, older co-workers died from cardiac complications shortly after they retired at 65.
It was a wake-up call for other older workers.
It is said that working towards that artificial goal can be stressful in the face of younger, ruthless competition.
So, take the earliest possible retirement.
And, live happily ever after.
Well, at least until you die.

#7 Alberta Ed on 08.12.22 at 2:23 pm

Take the money and run. Spend your first CPP payment on something fun — you earned it.

#8 Mel Bourne on 08.12.22 at 2:28 pm

First Home Savings Account (FHSA)
I don’t own our home, but my wife does. Could I still open an FHSA to shelter $40K ($8K X 5yrs) from the CRA taxation?

#9 stuck in Richmond on 08.12.22 at 2:29 pm

Thanks Sinan for great post. And also, don’t forget about inflation. A thousand dollars today is not the same as thousand dollars 10 years from now.

#10 ogdoad on 08.12.22 at 2:49 pm

Or you could go through life not expecting this benefit at all…beer/pot money anyway…

CPP? I’ll let someone else come up with a clever expansion to this acronym.

Og

#11 HPVictoria on 08.12.22 at 2:50 pm

Thanks Sinan, this is very useful.
How about a similar discussion on OAS next time?

#12 Linda on 08.12.22 at 2:52 pm

Excellent post, Sinan. For those who have a partner, look over what CPP rules are when making your decision. Currently, if you & your partner should happen to qualify for the ‘maximum’ CPP at age 65 & choose to wait, what happens if one of you die shortly after your 65th birthday? Many would likely think they would inherit their deceased partners full CPP benefit. Not so. Under current rules, CPP will pay ‘the maximum’ for a SINGLE person. So if you already receive ‘the maximum’, you will not see your CPP benefit increase by what your partner was receiving. The only benefit you would be entitled to under current rules is the one time death benefit which is $2,500. I heard that death benefit is supposed to increase to $3,000 or $3,500 but insofar as I’m aware it hasn’t yet occurred.

#13 Søren Angst on 08.12.22 at 2:56 pm

Great write-up Dr. Death.

It was.

To be honest and as a Paleo when I got to this part:

1 – Life is Short

after that…

TL;DR

———————-

Pretty much the same breakevens as you got when I calculated it a long time ago. Pulled the plug at 60, should have done it sooner.

Seemed like a nice round number to me at the time.

Good stuff S.

#14 Inadequate on 08.12.22 at 2:58 pm

#5 wendi1

” $500 a month is $6000 a year. $750 a month is $9000 a year. Did you mean contribute $1250 a month to these two accounts? These kinds of errors make the rest of your math suspect.”

Check your math. Exactly! I am speechless.

#15 bdwy on 08.12.22 at 2:59 pm

as previously mentioned, any newer nicer houses for sale are few and far between here just off the dirty (comm) drive.

very few sales and listings but did a new record high price just get set?

ok (but not ideal) location, small lot, nice reno – 2.2 -2.3 about the record high for something like this.

10 days on market.
tragically sold UNDER ask price. (2.799)

1920 CHARLES STREET
Vancouver BC
(Grandview Woodland) V5L 2T9
Reported SOLD
Aug 9, 2022
$2,775,000

jfc.

#16 Big Bucks on 08.12.22 at 3:04 pm

For many(in the lower income,no company pension) the GIS will make up the difference anyway at 65 so definitely take it at 60.Wait until 65 GIS will just give you less.

#17 Penny Henny on 08.12.22 at 3:17 pm

3 – You Retired Early & Had Multiple Years of No Contributions- Sinan

//////////////////////////

To be more specific
“Currently, the CPP program drops out the 17% of months in a person’s career period where he or she earned the least. Depending on how long your contributory period is, and whether other drop-out provisions also apply to your situation, this can allow up to eight years of your lowest earnings to be removed from the CPP retirement benefit calculation.”

https://www.moneysense.ca/columns/ask-moneysense/17-percent-drop-out-rule-cpp/

#18 Basil Exposition on 08.12.22 at 3:17 pm

This was very helpful Sinan. Thanks for your contribution.

#19 tbone on 08.12.22 at 3:33 pm

Death benefit is still $ 2500 this year .

I deferred my OAS until 70 as i transition from mutual funds to ETF`s . I would of lost it due to clawbacks .
I took my CPP at 60 , so i will balance out by deferring OAS.

#20 Penny Henny on 08.12.22 at 3:36 pm

#12 Linda on 08.12.22 at 2:52 pm
Excellent post, Sinan. For those who have a partner, look over what CPP rules are when making your decision. Currently, if you & your partner should happen to qualify for the ‘maximum’ CPP at age 65 & choose to wait, what happens if one of you die shortly after your 65th birthday? Many would likely think they would inherit their deceased partners full CPP benefit. Not so. Under current rules, CPP will pay ‘the maximum’ for a SINGLE person. So if you already receive ‘the maximum’, you will not see your CPP benefit increase by what your partner was receiving. The only benefit you would be entitled to under current rules is the one time death benefit which is $2,500. I heard that death benefit is supposed to increase to $3,000 or $3,500 but insofar as I’m aware it hasn’t yet occurred.
////////////////

EXCELLENT comment. And death benefit still $2500

#21 Love_The_Cottage on 08.12.22 at 3:40 pm

Garth dislikes GICs because he says the biggest risk is running out of money.

But we should take CPP as early as possible? Wouldn’t waiting help prevent the risk of running out of money?

Huh? By taking it early you get cash flow. By waiting (until closer to death) you get none until years later. – Garth

#22 Caffeine Monkey on 08.12.22 at 3:42 pm

My feeling is that if you don’t need the pension early in your retirement, it’s better to wait. If you live a really long time, you run the risk of exhausting your RRSP/TFSA savings, in which case the higher pension payments will be a good safety net.

For all of the real estate bulls, having all of your eggs in the real estate basket would seem to make this sort of calculation a terrible headache. I guess you’re supposed to take a reverse mortage or HELOC and then… time the sale perfectly when you need to pay off the principal? And then hope it’s not a down market so that you have enough money to buy a condo or move into the old folks home? Seems fraught with peril.

#23 Mean Gene on 08.12.22 at 3:43 pm

Choose wisely grasshopper.

#24 Bezengy on 08.12.22 at 3:45 pm

Reason #3. I just received my letter a few weeks ago. You would think they would have written this in capital letters in their letter.

Thanks, I’ll change my plans.

#25 Sinan Terzioglu on 08.12.22 at 3:50 pm

#4 Catalyst – My breakeven analysis does not consider inflation but by taking CPP early your required withdrawals would not put as much pressure on your savings so if you are invested in a balanced and diversified way your investments will outpace inflation over time – Sinan

#26 baloney Sandwitch on 08.12.22 at 3:52 pm

I think one benefit of CPP is that it’s a form of longevity insurance. So, if you don’t need the money delay it to age 70. The reason is you may be unlucky and live to 105. It’s nice to have an indexed source of income in that case.

#27 Sinan Terzioglu on 08.12.22 at 3:54 pm

#5 wendi1 – By saving $750 a month I meant to say that you can contribute up to $6,000 annually to a TFSA and the additional $3,000 can go into any other account such as a FHSA if you are eligble or a non-registered account – Sinan

#28 Paddy on 08.12.22 at 3:57 pm

Re: 5 wendi1

” $500 a month is $6000 a year. $750 a month is $9000 a year. Did you mean contribute $1250 a month to these two accounts? These kinds of errors make the rest of your math suspect.”

Check your math. Exactly! I am speechless.

FHSA contributions are tax deductible…perhaps thats where the $750 comes from and not $1166/ month(8k+6k=14k)….I know, math is hard

#29 Sinan Terzioglu on 08.12.22 at 4:05 pm

#8 Mel Bourne – In general, a spouse cannot be a first time home buyer if the person they are married to owns their principal residence. If your spouse sells the home and doesn’t own a home for four years then at that point you would both qualify for the FHSA – Sinan

#30 Sinan Terzioglu on 08.12.22 at 4:07 pm

#11 HPVictoria – The same applies for OAS – most should take it as early as possible – Sinan

#31 crowdedelevatorfartz on 08.12.22 at 4:11 pm

@#19 broadway

“1920 CHARLES STREET
Vancouver BC
(Grandview Woodland) V5L 2T9
Reported SOLD
Aug 9, 2022
$2,775,000”

+++
A friend of mine bought a house on Charles St in Vancouver in 1970.
He paid $17,000 for it.
The mortgage was $100/month = 25% of his monthly income.
He raised 3 kids in that 700sq ft house and paid it off in 1985.
He sold it in 1997 for 400k.
He bought a condo in New West for 100k ( its now “worth” about 700k)
He still bitches and moans about how he should have held on to the house.
I said, ” You paid 17k for it and got 400k. You used 100 k to buy a condo thats now worth 700k”
Quit moaning.”

#32 Sinan Terzioglu on 08.12.22 at 4:12 pm

#22 Caffeine Monkey – Reverse mortgages should not be a part of anyones long term plan! – Sinan

#33 Flop… on 08.12.22 at 4:20 pm

Mr Flop Snr.

Gone…

M48BC

M69QLD

R.I.P

#34 I don’t need no man on 08.12.22 at 4:23 pm

I wonder what happens to the people who don’t need no man when they reach retirement age? Only Fans?

#35 bdwy on 08.12.22 at 4:53 pm

testing underway but it seems to work just fine.

may be of interest to off grid types…

24l thermoelectric cooler (about 65W) connected directly to a 100w solar panel placed in the sun.

no battery, charge controller, fuses, inverter required.

250$ total incl tax.

cold drinks on the dock while the sun shines? priceless.

#36 DON on 08.12.22 at 4:56 pm

#33 Flop… on 08.12.22 at 4:20 pm
Mr Flop Snr.

Gone…

M48BC

M69QLD

R.I.P

******
Sorry to hear!

#37 Russ on 08.12.22 at 5:08 pm

Flop… on 08.12.22 at 4:20 pm

Mr Flop Snr.
. Gone…
M69QLD

R.I.P

M48BC
==================================

My condolences to you and your family Mr. Flop

We are all sorry for this loss. 69 is much too young these days.

, R
M65BC

#38 Victor Llearna on 08.12.22 at 5:10 pm

Everytime I do taxes and see the $3,000+ that was deducted for those damn CPP contribution I see red! (Already angry from the 2/3 of the tax bill that goes to federal taxes so Trudeau can give it away / waste it)
We should be allowed to opt out of the CPP. considering how much gets deducted the payouts absolutely suck. And it funds the huge bureaucracy that administers the CPP. Hardly a free country when you can’t even opt out of crap like that.

#39 PBrasseur on 08.12.22 at 5:21 pm

Me and my 100% stocks portfolio (plus some cash for short and medium term needs) don’t need the money and it would just have me pay more taxes, so I’ll wait. Insurance policy!

#40 crowdedelevatorfartz on 08.12.22 at 5:37 pm

@#33 Floppie

Sorry to hear that Flop.
At least you got to talk to him a few times before he was gone.

#41 Penny Henny on 08.12.22 at 5:57 pm

#33 Flop… on 08.12.22 at 4:20 pm
Mr Flop Snr.

Gone…

M48BC

M69QLD

R.I.P

/////////

glad you made your peace

#42 TurnerNation on 08.12.22 at 5:59 pm

The poor “New Guy” has to deal with all the dingbats in the comments section haha. ;-)
Here goes nothing.

>> As this is also a Boomer car blog this is not a bad deal these days. El Camino.

https://www.kijiji.ca/v-classic-cars/cornwall-on/el-camino-1982/1623986308

————-
O well some weekend reading: KANADA: Digital ID. I said many times, they are just stringing us along until the digital ID drops. . The QR code was training.

https://tnc.news/2022/08/10/digital-identity-program/
“Trudeau government to introduce national “Digital Identity Program””

> If only…

#19 TurnerNation on 09.05.21 at 3:11 pm
Alberta..this is until the Digital ID is ready. Herding the sheep – into the Blockchain.

#19 TurnerNation on 04.21.22 at 2:44 pm
Control over Travel. Yep until the Digital ID is ready.

#60 TurnerNation on 05.06.22 at 5:49 pm
IMO they are stringing us along till Digital ID is ready.

#43 Diversified in Mississauga on 08.12.22 at 6:14 pm

Both the wife and I took CPP at 60.
Reasons?
– Don’t need the money, so it can go directly into S&P ETF’s generating a solid 8-10% average over the next 20-30 years. That is if the last 100 years is somewhat of a guide, which I think it is.
– TFSA’s and RSP’s are full, mortgage free, and plenty in non-registered accounts.
We were lucky in life, made good decisions, and won the birth lottery of being born in Canada.
– AND as Garth always says; “If the government is going to give you money, take it!”

#44 cuke and tomato picker on 08.12.22 at 6:38 pm

What about converting your RRSP into a RRIF and you are
forced to take it out at 71. We think you should be able to
defer it until you need it for an upscale retirement home.
Yes we can save it but you have to pay tax on when you
are forced to take it out every year after 71. You should
be able to take it out when you need it and then pay your tax.

#45 Linda on 08.12.22 at 6:48 pm

#38 ‘Victor’ – CPP actually pays very well considering how little the deductions are. The irony of your complaint is that everyone is envious of government worker DB pension plans, yet find the CPP deductions too high & would likely ‘opt out’ if they were permitted the choice. CPP is a DB pension plan, BTW. With cost of living increases to boot – something a lot of workplace pension plans have phased out or reduced. For instance, the workplace plan I belong to currently offers partial COLA of 60% based on whatever the official average inflation amount is for the calendar year. So if inflation averages 5% for 2022, retirees would see an increase to their pension of 3% in the following year (60% of 5% is 3%). CPP/OAS however would increase by 5%, as COLA coverage is 100% of whatever the official annual inflation number is (for now, anyway).

#46 Wrk.dover on 08.12.22 at 6:59 pm

#35 bdwy on 08.12.22 at 4:53 pm
testing underway but it seems to work just fine.

may be of interest to off grid types…

24l thermoelectric cooler (about 65W) connected directly to a 100w solar panel placed in the sun.

no battery, charge controller, fuses, inverter required.

250$ total incl tax.

cold drinks on the dock while the sun shines? priceless.
______________________________

Nuh uhn, the panel must go into a charge controller hooked to a 12V battery to do that. It can be a junk battery, but it must be in the loop. I thought your way until I tried that trick too. Bummer.

My $100, rain cheque delayed 100 watt sale flier panel came with a controller included though, so along with a 16 year old car battery from the core pile, no problem.

Cool, cool runnings.

#47 Fact Checker Fred on 08.12.22 at 7:03 pm

I just turned 58. I plan to wait until at least 65, maybe 70 for CPP.
I plan to start cashing in my RRSP’s from 60 until I start CPP. I figure it makes more sense to spend my money first, and then rely on guaranteed and indexed CPP/OAS as I get older. I will be able to afford to top up my TFSA while maintaining my desired lifestyle. Sure I could drop dead early and leave money on the table. I may also live to 100….

#48 Wrk.dover on 08.12.22 at 7:11 pm

#42 TurnerNation on 08.12.22 at 5:59 pm
El Camino.
______________________

Earlier today, I had confided to my wife, that if I had to settle for only one special interest car, in lieu of my present fleet, that particular generation of Car Truck with TPI as the only mod, would sate my need.

#49 Ohm on 08.12.22 at 7:19 pm

Excellent advice although I read the same in the past with Garth. I am close to that age and with both of you saying the same thing and other people that I have talked to; you have all confirmed what I wanted to do anyways. Thanks for the great advice and with that I mean all of you. Cheers!!

#50 Dr V on 08.12.22 at 7:19 pm

33 Flop – my condolences

#51 CJohnC on 08.12.22 at 7:23 pm

Flop,

Sorry to hear of your big loss. You only have 1 Dad.

#52 Blessed_Canadian_Millennial on 08.12.22 at 7:24 pm

Count me in on the camp who would happily delay taking their CPP until age 70.

Delaying allows me to alleviate longevity risk.

It also allows me to use risky investments during my 60s with a guaranteed higher CPP allowance during 70s and beyond.

Two downsides to delaying CPP:
Dying before the break-even age (84)
Leaving less wealth/estate behind

#53 One more thought on 08.12.22 at 7:27 pm

Thanks for the blog Garth
Thanks for the post Sinan

From my experience something I did not think of when I took CPP early. For the record I am depositing the CPP funds into my TFSA.
As mentioned above the break even is 74. However if you do some calculations if you wait till 65 and draw CPP in my case $965 you’re fully taxed. If you take the penalty and take the reduced amount of $600 and save it in a TFSA
Then at 65 withdraw money from TFSA tax free to make up the difference or $365 a month in my case. In conclusion are further ahead with tax savings.
For example I lost $365 a month in taking CPP early
By saving $600 a month the CPP at 60, for 5 year plus 6 percent
And then withdraw the $365I lost in penalties, which
is withdrawn tax free. Conversely the $965 CPP is fully taxed. Therefore breakeven line never crosses.
Just one more thought in your decision making process.

Do your own calculations you might be surprised.

One word of caution for those in a defined benefit plan
The CPP and company pension plans were merged in 1964

As a result at age 60 you receive what is called bridging.
That bridging is equal to full CPP.
So if you take CPP early at at age 60 and in my case $600 a month when you turn 65 you loose the full CPP or the bridging amount of $ 965 a month.

My advice do your research and be aware of your pension rules and bridging rules as this also factors into your calculations.

Cheers have a great weekend.

#54 Dr V on 08.12.22 at 7:31 pm

I feel it’s wise to take the CPP early (or earlier rather than later) if you are married and only have your own savings and investments for retirement (ie no company pensions).

The immediate cash flow helps protect against market downturns (like the one we just had), as well as large RRSP drawdowns. If you wait, but die early, your
partner would lose all your OAS, most or all of your CPP, and have a lower RRSP to draw from.

Definitely review your personal situation with your advisor and/or accountant.

#55 Do Not Comply on 08.12.22 at 7:34 pm

#42 TurnerNation on 08.12.22 at 5:59 pm

O well some weekend reading: KANADA: Digital ID. I said many times, they are just stringing us along until the digital ID drops. . The QR code was training.

https://tnc.news/2022/08/10/digital-identity-program/
“Trudeau government to introduce national “Digital Identity Program””

> If only…

#19 TurnerNation on 09.05.21 at 3:11 pm
Alberta..this is until the Digital ID is ready. Herding the sheep – into the Blockchain.

#19 TurnerNation on 04.21.22 at 2:44 pm
Control over Travel. Yep until the Digital ID is ready.

#60 TurnerNation on 05.06.22 at 5:49 pm
IMO they are stringing us along till Digital ID is ready

——————

They can shove their digital ID where the sun don’t shine.

The gig is up. Despite their best efforts of censorship and gaslighting, he cat is out of the bag. Too many people know. There is no way a majority of Canadians will accept their globalist communist bullshit at this point. The Karens will accept it, but they are now in the minority…

Next step, root out all of the traitors, starting with the entire Liberal cabinet currently “penetrated” by that clown Schwab. Starting with Castreau.

#56 Shawn on 08.12.22 at 7:40 pm

CPP at 60?

If you take at 60 you get full indexing to official inflation as Linda mentioned in here excellent comment at 45.

But it seems that maximum CPP has likely been increasing faster than inflation? Or has it?

Is someone who took it at 65 15 years ago and got the maximum still at today’s maximum or very close?

#57 Steel City Kid on 08.12.22 at 7:44 pm

#33 Flop

My condolences on the loss of your old man. He wasn’t very old, either. Glad you were in touch before the day came. RIP.

#58 Ponzius Pilatus on 08.12.22 at 7:48 pm

With so many posters here thinking that Canada is going into the crapper, you’d think more of them would opt for early payout, rather than waiting for the end of the world.
But, as usual, It’s all just talk.

#59 Nonplused on 08.12.22 at 7:48 pm

“A bird in hand is worth two in the bush.”

#60 Shawn on 08.12.22 at 7:51 pm

CPP at 60?

Normally the “penalty” is a 36% reduction. I was going to wait until 65.

But I stopped contributing at 65 and found that as each year went by I was getting hit. At 55 the Service Canada calculation said I would get a surprising 92% of the maximum at 65. Pretty good for retiring 10 years early. But it was not really true and as years went by the calculation changed and I would get 91% then 90% and eventually maybe 85% of maximum or maybe even lower, it was not clear.

The upshot was for me the penalty to take at 60 would not be 36% because I could avoid some of the effect of non-contribution years. So, I caved and took at 61.5 years.

Other considerations might be that if I delayed CPP the tax would eventually be higher as I will have large RRSP (RIF) deductions along with my work DB pension income. In my case with DB work pension and RRSP there is no way to avoid a relatively high tax bracket. But I’m confident the tax free growth in RRSP still made that my best route. The TFSA did not exist in most years when I contributed to RRSP. I contributed early and went all equities and got reasonably lucky.

Paying a lot of tax in retirement will be a nice problem to have.

#61 Shawn on 08.12.22 at 7:52 pm

Whoops I meant I stopped contributing at 55.

#62 Grunt on 08.12.22 at 8:21 pm

My old man went at 63.5 in a self-induced act of AeA.
My mother pissed his accomplishments away at the slots.

What I have is 100% my own. I’m taking CPP at 65 because I qualify for near max. I’d say life is seldom enjoyed more endured.

#63 TANSTAFL on 08.12.22 at 8:21 pm

There are good reasons to take CPP early but probably not for most people who read this blog given Garth’s surveys. This is probably one of the few areas I disagree with our host. The case not to delay OAS is much stronger.

Everyone worries about dying early but 83 is life expectancy for a male from birth. I hope very few have to use it as their planning age in calculating what they need for retirement. Mortality tables for 2022 suggests a 50% chance that the 60 year old making this decision will survive to 89. Frequenting this blog is a sure indication of being above average, the 60 year old also has a 25% chance of living to 94. Dying young is not the risk that needs to be mitigated, dying old is.

This break even analysis does not seem to account for inflation. In fact, the CPP grows with wage inflation before you collect it rather than CPI inflation after. Data from 1960-2021 indicates wage inflation exceeded CPI inflation by a median value of 0.83% (although probably not next year). A small but not insignificant difference. The impact of zero contribution years is also surprisingly minimal and you are benefitting from a guaranteed real rate of return. Have your financial planner crunch the numbers for your case or do it yourself.

If you don’t need the money, pay yourself the larger amount you will get by delaying from your assets and then collect the larger amount later. If you die before the break-even age, your dead and spent your money. If not, you are ahead, regardless of how you choose to spend or save it.

Unless you have significant health issues most people reading this blog are probably better served mitigating their longevity risk by investing in a larger, fully indexed, CPP defined benefit pension.

#64 Poorgirl on 08.12.22 at 8:31 pm

#33 Flop – My condolences…glad you had a chance to make that phone call.

#65 Realtors say prices are up 20% on 08.12.22 at 8:57 pm

and they would never lie, would they?

https://www.pqbnews.com/news/benchmark-price-for-single-family-pqb-home-hovers-near-1m-mark/

#66 Nonplused on 08.12.22 at 9:03 pm

#45 FCF

A consideration to consider when deciding whether to spend “your” money first and take CPP later “which is also “your” money is that RRSP’s and other savings can be left to your heirs, whether wife or kids. Unless you hate them, of course, which I understand. CPP has a survivor benefit for your wife but that is either way. But you can’t leave CPP to your kids. Take the money, while you can.

As for those who think taking CPP later, 70 or 75 for example, insurance against what? They don’t cut it off until you die.

The CPP payments are pretty neutral. Waiting doesn’t pay. Take the money.

#67 Dr V on 08.12.22 at 9:04 pm

60 Shawn

“But I stopped contributing at (55) and found that as each year went by I was getting hit. At 55 the Service Canada calculation said I would get a surprising 92% of the maximum at 65. Pretty good for retiring 10 years early. But it was not really true and as years went by the calculation changed and I would get 91% then 90% and eventually maybe 85% of maximum or maybe even lower, it was not clear.”
————————————————

Hi Shawn. CPP may have changed the wording on their assessments that they send out the year before eligibility.

My understanding was I would get X if I started at 60 but Y at 65 as long as I continued contributing at my historical earnings rate. Worked out about 95% of max.
As it was I contributed at the max rate for another 2y8mo so it worked out a little better than the 95% less the penalty.

My wife rocked it (or I rocked it for her as she was on my payroll) after taking the child rearing out. She waited until 65 and gets just a few dollars less than I do.

What I should do one day is figure out the value of my contributions since the beginning, at the suggested 7% but take into account the double cost for the time I was self-employed. My gut says the CPP is not a good deal for the self-employed.

#68 DON on 08.12.22 at 9:06 pm

@Russ

My brother works there. Just two years in.

#69 Voice Of Reason on 08.12.22 at 9:08 pm

In response to “One More Thought’s – One word of caution for those in a defined benefit plan
The CPP and company pension plans were merged in 1964”

Don’t know how you came up with the above statement as the CPP did not exist in 1964. It was established in 1965.

DB Pension Plans may take into account a notional integration of the CPP if you retire before age 65. Some pensions calculate your monthly pension payment so that you get a higher pension until age 65 and then a lower pension after age 65. The higher payment (Bridge) before age 65 is based on the assumption that age 65 is the typical CPP/OAS date and that pensioners may need more pension income before age 65 and less afterwards. But your pension plan and CPP don’t talk to each other and modify your payments – they are independent.

How did arrive at your “Bridge” being equal to the full CPP?

#70 Sask to AB on 08.12.22 at 9:16 pm

re @33 Flop

Sorry for your loss.

F59AB

#71 Blobby on 08.12.22 at 9:21 pm

quote : “$750 a month to your savings ($6,000 annually to a TFSA and $8,000 annually to a FHSA) ”

Eh? 750*12 = 9000?

#72 Smelly Little piglet on 08.12.22 at 9:33 pm

CPP has a max of about 1250 a month. If you are married and you and your spouse wait till 65 or 70 and end up getting max or close to when one of you dies you will only be topped with a survivor benefit up to the 1250 max. So if you both had 1100 a month CPP and one person dies the other will only get 150 per month added to their CPP. Take the money early. Spend it, save it or give it to charity. When you calculate the brake even you need to account for the loss of the spousal benefit by the passing of a spouse. If couples take Cpp at 60 and have 800 CPP each. When one dies the other will get topped up with Suvivor pension to Max and not be risking losing suvivor pension by waiting to collect.

#73 Observer on 08.12.22 at 10:05 pm

When people who break the law are not checked, some escalate. Our species routinely checks poor, low status law breakers. But a hardwiring glitch makes us avoid policing the wealthy & powerful when they break the law. That allows them 2 control our species, 2 our detriment & 2 our planet’s detriment.

President Putin is an example of a country’s wealthy, powerful leader who exploits our species hardwiring 2 devastating disadvantage 4 life on our planet.

We can’t continue allowing the emboldened 2 destroy us; our species won’t rebound. Climate warming is a species level threat, a habitability level threat.

Continuing 2 indulge alpha’s w/delusions of grandeur will get our species dead, sooner rather than later. If former President Trump broke the law, he must be charged. After appropriate legal & court perusal, if he is guilty, he must be convicted.

We must do a major shift in our species’ thinking. Loopholes we allow because of our hardwiring glitch, that let high status perps destroy our systems, our habitat, must go. We must become a smarter, more self aware species if we intend 2 survive. Else bullies will destroy the habitability of our planet, & complain they are being victimized while they do it.

Says “Stacy” in response to: https://www.nytimes.com/2022/08/11/opinion/trump-fbi-raid.html

#74 DON on 08.12.22 at 10:19 pm

My mom took her CPP early at 60 after Garth first mentioned the idea years ago. She passed unexpectantly 6 months after she retired with a DB municipal pension at age 66. I thought for sure, she would make it to at least 80.

I plan on taking it and putting it in a trust fund for my wife and kids.

#75 DJT on 08.12.22 at 10:35 pm

Thank God Mike Harris put in ODSP for the disabled.

#76 BillyBob on 08.12.22 at 10:36 pm

Flop,

My sincere condolences, regardless of the nature of your relationship with your dad it’s not an easy loss.

Thank you for all you add to this blog.

#77 Harry Emerson-Blake on 08.12.22 at 10:49 pm

“Life is unpredictable”, true. I read the news about people my age and younger dying of all the usual things, heart attack, undiscovered cancers etc. Not everyone goes out in a cocaine field flaming wreck like Anne Heche recently did . God bless her. She got a headline. Most of us won’t. We just die. Some of us from undiagnosed untreated illness. Some of us go in the ignoble hallway of an ‘understaffed ‘hospital.

The ‘ natural causes’ dead are many times overtaken by illnesses like heart, brain, oncology related illnesses that were given late diagnosis due to grossly extended wait times. You know the story of the lady whose cancer went from Stage One to Untreatable Four in the months she waited to start treatment. These cases are common and numerous.

I know a guy who went in for regular check ups locally without learning anything extraordinary, undiagnosed, and then for an off chance time went to a world famous hospital in Asia while on vacation. He’d never had a CT Scan because the wait times for urgent care in Canada is 297 days, and more if you get bumped by someone more immediate, always the case.

The high end service of ultra sounds and scans by three specialists revealed a trifecta of dangerous, previously undiagnosed issues. AAA ( aneurysm ) at 55%, ( requires stent surgery)Aorta Ischemia dissection 4.8 ( danger danger requiring angioplasty surgical intervention in near future. And the trifecta, a blood clot lying under the Ischemia that let go any time.

Bottom line, the guys alive by the quirk of fate allowing him to engage first class medical treatment offshore which the majority of people can’t. That majority are written off as “ dead by natural causes”. He’s still alive and vows to never come back to Canada under the supervision of his high end specialists. They in fact told him not to fly back to Canada given the conditions of receiving treatment there.

So, when they say “ life is short” , it just means that some could liver longer if Canada had better health care. Our governments priority of spending money on UN boondoggles creates a life akin to sitting on a roulette wheel with Satan as your croupier.

#78 Ustabe on 08.12.22 at 11:13 pm

@Flop:

Late to the blog, putting on a new roof: deck, shingles, all the stuff. Thank Allah for a 16 year friendship with the owner of a major roofing company. I was in charge of food and beverages.

Anyway, having lost my mother way too young and my father well past his best before date I can tell you in either case it never gets better but it does get easier.

My condolences, hang in there.

#79 Grant on 08.12.22 at 11:14 pm

If I take my CPP can I also collect EI at the same time? Is CPP considered income?

#80 Tom from Mississauga on 08.12.22 at 11:17 pm

4 – CPP payments are adjusted higher for inflation (like OAS, which will add to inflation creating a positive feedback loop of more inflation every year).

CPP and OAS are concerning as Canada enters mass retirement. We’ll be printing money for OAS and Medicare causing inflation while assets in CPP (and every other 1st world country) are sold or printed to pay pensions. Asset sales will start to push the cost of capital higher in the New Year. Then we have assets that need selling in the non friend shored countries as we de-globalize, I should grab a beer with David Rosenberg.

#81 Bridge financing on 08.12.22 at 11:42 pm

To voice of reason
Thanks the year 1965 I was off by a year. By bad.

I never said the company pension and CPP talk to each other, you assumed that’s what I meant.
Sorry for the confusion.

If you read your company pension statement
It will probably say
Company pension $4,000 just for example
Bridge financing $1,000 example only

Total pension to age 65 $5,000

Then there should be a footnote the bridging ends at age 65.

Then there should be another page with your estimated CPP amount at age 65. For most people the bridging amount equals the CPP amount.
These numbers will of course change because of indexing.

I just went through this and my bridging was within $60 of the CPP number at 65 the difference was indexing.
I took my CPP at 60.

Hope that clarity’s my example,
Always best to read your own pension statement.

OAS is never included in the 1965 agreement as it’s given to every Canadian and based on working years.

Thanks for reading and commenting on my post
Have a great weekend.

#82 Ponzius Pilatus on 08.13.22 at 12:47 am

#77 Emerson, Lake & Palmer
I know a guy who went in for regular check ups locally without learning anything extraordinary, undiagnosed, and then for an off chance time went to a world famous hospital in Asia while on vacation. He’d never had a CT Scan because the wait times for urgent care in Canada is 297 days, and more if you get bumped by someone more immediate, always the case.
—————————
Would you mind revealing the “World Famous Hospital” in Asia?
In the meantime, it’s good to know that the miracle healers in the Philippines are now using CT-Scanners.

#83 NoName on 08.13.22 at 8:06 am

Flop, i am sorry to hear that your father passed away.

#84 Harry Emerson-Bkake on 08.13.22 at 8:48 am

#83 Ponzi

If denigrating the good people and credentialed professionals of the Philippines is your best shot I’m not going to help you. But no, the best hospitals, the internationally accredited most famous ones are not in the Philippines. I might remind everyone that there are many Phillipino nurses working in Canadian hospitals and they’re world class care givers. We’re lucky to have them.

My private hospital is nothing like any Canadian hospital, on entry it’s a Five Star resort hotel and shopping mall. Staff levels are hotel level service. All the services are personalized and immediate. There are no wait lists. No waiting at all, t’s all done here, on call. Retired folks who don’t want to wait three years for an elbow come here. CT scans, obviously a sore spot with you, are on demand…..unlike Canada.

You choose to see a western trained specialist of a variety of racial backgrounds upon request, doctors that are some if the world’s best recruited in for their known expertise. The clientele is equally diverse, restaurants, family suites and Rolls Royce concierge service. There are retired Canadians , Europeans and Saudi Sheiks.

The hospital is owned and managed by an American conglomerate. Canada could easily afford this level of health care. We have the energy and mining riches to pave the TransCanada Hwy with gold, but our Liberal government chooses to spend the money elsewhere.

#85 Sail Away on 08.13.22 at 9:17 am

@ Harry Emerson-Blake

Our 19 yo daughter in a foreign country brought her fifth-hand car in for routine maintenance, and the mechanic discovered many expensive problems.

Amazing, these specialists. Even more amazing that the car ran just fine for the next three years without remedy before sale to its sixth owner.

#86 Wrk.dover on 08.13.22 at 9:30 am

#81 Bridge financing on 08.12.22 at 11:42 pm
OAS is never included in the 1965 agreement as it’s given to every Canadian and based on working years.
__________________________________

Based on number of years of residency before age 65, actually.

No work required.

#87 Love_The_Cottage on 08.13.22 at 9:37 am

#79 Grant on 08.12.22 at 11:14 pm
If I take my CPP can I also collect EI at the same time? Is CPP considered income?
___________
Yes, it is part of income, Taxes should be a key part of the decision. Look at someone who is planning on retiring at 63 and has a 6 figure income and has their TFSA and RRSP topped up. No reason in the world they should start CPP at 60 and lose half of it to taxes and then get reduced payments in the future.

#88 Love_The_Cottage on 08.13.22 at 9:43 am

#21 Love_The_Cottage on 08.12.22 at 3:40 pm
Garth dislikes GICs because he says the biggest risk is running out of money.

But we should take CPP as early as possible? Wouldn’t waiting help prevent the risk of running out of money?

Huh? By taking it early you get cash flow. By waiting (until closer to death) you get none until years later. – Garth
__________
#52 Blessed_Canadian_Millennial on 08.12.22 at 7:24 pm
Count me in on the camp who would happily delay taking their CPP until age 70.

Delaying allows me to alleviate longevity risk.
__________
This was the point I was trying to make in #21, perhaps it’s clearer in #52.

#89 Tony on 08.13.22 at 9:55 am

You have to wait 5 years if you sell a house to be able to contribute to the FHSA. It seems like a good thing to be in since the worst case is it ends up in your RRSP.

#90 Tony on 08.13.22 at 10:14 am

Re: #62 Grunt on 08.12.22 at 8:21 pm

My grandfather died the day before he would have got his first pension cheque at age 65. By all rights Stu Ungar from the world of poker and bridge should have outlived him. The lifestyle he lived the average person would have been lucky to see age 30. Most of my relatives on both sides of my family are in their nineties and in perfect health. I’m taking my CPP at age 70. Somehow I’ll get around the OAS clawback.

#91 Tony on 08.13.22 at 11:13 am

Re: #19 tbone on 08.12.22 at 3:33 pm

OAS increases .6 percent a month from age 65. CPP increases .7 percent a month to age 70. You got it backwards.

#92 Dharma Bum on 08.13.22 at 11:57 am

#43 Diversified in Mississauga

Both the wife and I took CPP at 60.
————————————————————————————————–

Ditto!

Wife and I turned 60 the same year and took the moolah!

For all the same reasons.

Those payments are regularly invested each and every month into a joint investment account that I track separately. So far, so good.

Why would I wait for 10 years to get my first monthly contribution instead of taking advantage of a 10 year stream of monthly income that I can enjoy watch ballooning while we’re still relatively young(ish)?

With a conservatively estimated yield of between 6-7 percent over 10 years, the estimated value of the combined CPP payments for the two of us will amount to approximately $250,000.00.

I’d rather hit 70 with a quarter mil in the investment account than just start accumulating it then.

I heard that life starts going downhill fast after 80 too. So, a twenty year head start on the cashflow sounds good to me!

#93 Dharma Bum on 08.13.22 at 12:03 pm

Everyone is “abuzz” about this!

https://www.youtube.com/watch?v=niKv0_GPzF0

#94 Just Wow on 08.13.22 at 12:54 pm

#83 Ponzius Pilatus on 08.13.22 at 12:47 am

In the meantime, it’s good to know that the miracle healers in the Philippines are now using CT-Scanners.

————————————-

Guess this is the systemic racism Trudeau is always banging on about?

Canadians define themselves mainly by their non-American-ness but turns out they’re 100% equally as ignorant about most things outside their borders.

“But I read it on Facebook!”

#95 Kurt on 08.13.22 at 1:19 pm

Hi Sinan,

Correct me if I am wrong: Canadian Government is collecting about $3k a year from me and my employer for about 40 years (assuming you have started at 25, and retired at 65), and paying about $14k for about 20 years (assuming life expectancy if 85).
Does this math make sense?

Thanks,
Kurt

#96 Linda on 08.13.22 at 1:34 pm

#56 ‘Shawn’ – an very interesting question. In theory, if someone began CPP at ‘the maximum’ 15 years ago the 100% COLA increases should see that CPP recipient still getting the current maximum today. Don’t know if Garth has a reader who could confirm whether that theory is correct or not. I suppose if there happened to be a chart showing what maximum CPP was in 2007 & also a chart showing what the annual COLA increases were since then one could do the calculations to see whether the end result matched what the CPP maximum is today. Now I’m curious & will see if I can locate that information!

#97 Linda on 08.13.22 at 3:09 pm

#56 ‘Shawn’ – so I did a bit of digging. In 2007, maximum CPP was $863.75 as per various sources. Another table I found fairly easily showed CPI; I looked at what the CPI was in January 2007, compared it to current CPI on the same table in 2022 then subtracted the 2007 number from the 2022 number. That gave a total increase of 43.5%. Currently CPP maximum is $1,243.75; $863.75 multiplied by 43.5% gave me a figure of $1,239.48. So it does appear that anyone who received ‘the maximum’ in 2007 would still essentially receive ‘the maximum’ today or very close to it. I will note that beginning in 2019 there is a supplemental increase due to higher rate contributions – the CPP ‘enhancement’ kicking in – which I believe would only apply to anyone who is making those contributions. So in future years a long term CPP beneficiary may well see new retirees who qualify for ‘the maximum’ receiving more than they are.

As for the death benefit, it was capped at $2,500 in 1998. The death benefit had reached $3,580 in 1997; obviously it was decided that capping the payment was a prudent fiscal move on the part of the government, considering that the oldest baby boomers were in their 50’s by then. Funny they could look ahead & see that an increasing death rate would cost a lot more in death benefits if they didn’t cap it but couldn’t make arrangements to deal with all the other financial impacts of that aging cohort. Now the oldest boomers are mid-70’s (76 this year) with the very youngest boomers turning 57 this year & rapidly approaching retirement age if they haven’t retired already.

#98 Science Based Retirement on 08.13.22 at 6:07 pm

I must say, #63 TANSTAFL, you appear to be one of the most intelligent, well-informed commenters on this blog.

#99 Harry Emerson Blake on 08.13.22 at 9:43 pm

#86 Sail

And when you or a loved one is dying on a stretcher in a hallway wondering if you or they could have lived a few more years if only you’d had that surgery, but wouldn’t pay, or couldn’t because of wait lists, or because you’re just cheap, or miserably broke, don’t blame the system or the public system brainwashing, that wouldn’t provide because money was better spent elsewhere, bizarre.

#100 Mr Canada on 08.14.22 at 8:29 am

First, CPP is the biggest rip off, the “average” person gets $725 a month, what is the median payout ? You would do much better without it by having the option not to participate and retaining double the money. The $2,500 death benefit has not increased in decades, and of course is taxable, why ? Compare CPP to the USA where the payouts are significantly higher and everyone gets “free” medicare at 65. As a self employed person I pay both employee and employer contributions too of $6,990.60 a year in premiums. Take it early.

#101 Gruff403 on 08.14.22 at 9:49 am

Boss came to me and said he would give me a $8700 raise today or I could wait five more years and get a $11832 raise. Why would you turn down the raise today vs the uncertainty of tomorrow?
Make your decision and live your life. I took my CPP at 60.

#102 Sail Away on 08.14.22 at 12:55 pm

#100 Harry Emerson Blake on 08.13.22 at 9:43 pm
#86 Sail

And when you or a loved one is dying on a stretcher in a hallway wondering if you or they could have lived a few more years if only you’d had that surgery, but wouldn’t pay, or couldn’t because of wait lists, or because you’re just cheap, or miserably broke, don’t blame the system or the public system brainwashing, that wouldn’t provide because money was better spent elsewhere, bizarre.

——-

I’m down wit dat