Kim
The Canada Pension Plan (CPP) is a central component of retirement income for Canadians. While most begin CPP benefits at age 65, Canadians can start receiving payments as early as age 60, or choose to delay up to age 70.
But why would anyone consider starting earlier and accept smaller monthly payments? The answer depends on financial needs, health status, and life circumstances.
In this article, we break down the reasons why starting Canada Pension Plan at 60 could maximize your personal benefits, even with a reduced payout.
How CPP Works: Timing and Payment Adjustments
Choosing when to begin Canada Pension Plan payments directly impacts the amount you receive each month:
- Start at 60 → Monthly payments reduced by 0.6% per month (36% total reduction vs. starting at 65).
- Start at 65 → Receive standard benefit amount.
- Start at 70 → Monthly payments increased by 0.7% per month (42% increase vs. starting at 65).
| Starting Age | Adjustment | Estimated Monthly Benefit | Estimated Annual Benefit |
|---|---|---|---|
| 60 | -36% | $916.00 | $10,992.00 |
| 65 | Standard | $1,433.00 | $17,196.00 |
| 70 | +42% | $2,035.00 | $24,420.00 |
- Actual benefit amounts depend on your Canada Pension Plan contributions over your working life.
Why Start CPP at Age 60?
1. Financial Necessity
Life often brings unexpected changes:
- Job loss
- Early retirement
- Medical expenses
- Family obligations
In such situations, starting Canada Pension Plan Payment Amounts by Age (2025) at 60 provides immediate income to help cover essentials like housing, groceries, utilities, and medical care.
When immediate needs outweigh long-term optimization, taking Canada Pension Plan at 60 offers critical support during financial challenges.
2. Health Considerations
Your health status is a major factor in deciding when to start CPP.
If your personal or family health history suggests a shorter life expectancy, claiming Canada Pension Plan at 60 allows you to receive more total payments in your lifetime.
The typical “break-even point” — the age where waiting would have been more financially beneficial — is around age 74.
If you do not expect to live well beyond that age, starting early may be the better choice.
3. Gaps in Contribution History
Canada Pension Plan benefits are based on your 35 best years of earnings.
Not everyone has a complete contribution record due to:
- Self-employment
- Part-time work
- Career breaks
- Early retirement
In these cases, delaying Canada Pension Plan may not provide a significant increase in benefits. Starting at 60 ensures you start collecting when it matters most.
4. Flexibility and Personal Choice
Sometimes the decision is about quality of life and personal goals:
- You may want to travel or pursue hobbies in your 60s.
- You may plan to phase out of work gradually.
- You might prefer having a guaranteed income stream earlier.
Starting CPP at 60 provides this flexibility, even if the monthly amount is lower.
5. Avoiding Market Risks
Some individuals think about starting Canada Pension Plan at 60 and investing the payments themselves.
While this is possible, remember that Canada Pension Plan is guaranteed and inflation-protected.
Matching its annual increase (7.2% by delaying) in the market is difficult — and comes with risks such as:
- Market volatility
- Fees and taxes
- Sequence of returns risk
Unless you are highly confident in your investment ability, relying on CPP stability is often the smarter approach.
CPP Sustainability & Security
There is no need to worry about Canada Pension Plan running out.
The Canada Pension Plan Investment Board manages the CPP fund independently and conservatively.
Projections confirm that CPP is sustainable for at least 75 more years — making it one of the most secure retirement programs available.
Factors to Evaluate
Break-Even Age
If you expect to live beyond age 74, delaying Canada Pension PlanP could result in greater lifetime benefits.
If not, starting at 60 could result in higher cumulative payments over your expected lifetime.
Inflation Protection
CPP payments adjust annually for inflation, regardless of when you start collecting.
Smaller payments at 60 still maintain their purchasing power over time.
Tax Considerations
CPP payments are taxable income.
Starting earlier means lower annual taxable income, which could help you manage your tax bracket in retirement.
Deciding when to start your Canada Pension Plan benefits is a personal choice — there is no universal answer.
Starting at age 60 may be the right option if:
- You need income now
- You have health concerns
- Your contribution record is incomplete
- You want lifestyle flexibility
On the other hand, delaying CPP can maximize your monthly payments for those with longer life expectancy and financial stability.
Think it through carefully.
Consider your personal health, financial needs, and retirement goals. Consulting with a financial advisor is always a smart move.
FAQs
Can I work while receiving CPP at age 60?
Yes, you can continue working while receiving CPP at 60.
If you keep contributing, you may qualify for the Post-Retirement Benefit, which adds to your CPP income later.
Is there any benefit to delaying CPP past age 70?
No — there is no additional benefit increase beyond age 70.
It is best to start collecting CPP by age 70.
How do I apply for CPP benefits?
You can apply through your My Service Canada Account or by submitting a paper application.
It is recommended to apply 6 months before you want your payments to begin.