Should I Take My CPP Early?

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Should You Take CPP Before Age 65?

The Pros and Cons Explained Simply

The Canada Pension Plan (CPP) is money the government gives you every month after you retire. Most people start getting CPP at age 65, but you can choose to start as early as age 60. This is called taking CPP early.

But is it a good idea? Let’s look at the good and bad sides of taking CPP before 65.

✅ Pros (Good Things) About Taking CPP Early

1. You Get Money Sooner
   If you stop working before 65, early CPP gives you money to help pay your bills. You don’t have to wait until 65 to get help.
2. You Can Use Less of Your Savings
   Getting CPP early means you don’t have to take as much money from your savings. This can help your savings last longer.
3. It Can Fill the Gap
   If you’re waiting for other retirement money (like a private pension or Old Age Security), early CPP can help you until those start.
4. You Might Get More Over Time
   Even though the monthly amount is smaller, if you live a long life, you might end up getting more total money because you started earlier.
5. Peace of Mind
   Having a steady income can make you feel more secure, especially if you’re worried about money or the stock market.

❌ Cons (Not-So-Good Things) About Taking CPP Early

1. You Get Less Money Each Month
   For every month you take CPP before 65, your payment goes down by 0.6%. That’s a 36% cut if you start at 60 instead of 65.
2. It’s Permanent
   Once you start early CPP, you can’t change your mind. The lower payment stays the same for the rest of your life.
3. You Might Pay More Taxes
   If you’re still working and take CPP early, your total income might be higher, which means you could pay more in taxes.
4. You Could Miss Out If You Live a Long Time
   If you live a very long life, waiting until 65 (or even 70) might give you more money overall.
   Bonus Tip: If you delay CPP past age 65, your monthly payment actually goes up. You get an extra 0.7% for every month you wait, up to age 70. That’s a 42% increase if you wait until 70!
5. You Still Pay Into CPP Until Age 65
   Even if you start collecting CPP early, you still have to keep paying into it if you keep working until age 65. To stop these payments after 65, you must fill out a form and give it to your employer. If you don’t, they’ll keep taking CPP from your paycheck.

So, What Should You Do?

It depends on your situation. Ask yourself:

• Do I need the money now?
• Am I in good health?
• Do I plan to keep working?
• How long do people in my family usually live?

Talking to a financial advisor can also help you make the best choice for your future.

Gerald has worked in public accounting for over 25 years.  He does all manner of tax planning including helping you decide if incorporation is right for you.  He is also a Quickbooks Certified ProAdvisor.  Contact him if you have any questions at askacpa@analytic.cpa or give him a call at 306-937-7001 (Battlefords) or 306-236-5675 (North West Saskatchewan) for practical guidance and solutions to start a new business or kickstart your existing business.  Gerald and his team are here to help you regain control of your financial future—offering clear, professional support every step of the way.