Question 1

When is the best time to start receiving CPP payments?

Accepted Answer

When to start CPP is a question that is unique to each of us.  The standard age to start receiving CPP is 65 but you can take it as early as 60 or as late as 70.

Start early?
If you choose to take it before you turn 65, your payment will be reduced by .6% for each month before your age 65, which is 7.2% per year.  So if you take it at age 60, sure you are receiving the income for an 5 additional years, but your payment is reduced by 36% for life.  For simple math if your full benefit at age 65 was $1,000/month.  If you took it at age 60, you would receive $740/month.

Delay CPP withdrawals?
The opposite is true if you defer receiving your benefits beyond age 65.  Your benefit is increased by 8.4% for each year you wait.  That would be a 42% increase in your benefit if you waited to age 70.  That would increase your $1,000 payment to $1,420.

In this Globe and Mail article, there is a useful calculator.  It allows you to compare taking CPP early vs later.  It shows you the breakeven point as well so you know that if you live beyond x years of age, it would be more beneficial to wait to start receiving your CPP.
https://www.theglobeandmail.com/investing/personal-finance/tools/cpp-benefits/

This can also fit into your larger financial picture bringing into account your Old Age Security and other sources of retirement income.  It is often best to do a full retirement plan to ensure you choose the best option that will help you out the most through all of your retirement.

Question 2

When is the best time to start taking OAS payments?

Accepted Answer

The best time to start taking Old Age Security (OAS) in Canada depends on your situation:

Start at 65: This is the default option and provides the full benefit amount.

Defer until 70: If you don’t need the income immediately, deferring increases your OAS by 0.6% per month, up to 36% more at age 70. This is ideal if you're healthy and can wait.

Early OAS: You cannot start before 65.

In general, start at 65 if you need the funds or defer if you want a higher benefit later. Your decision should consider your health, other income sources, and tax implications.
*Powered by Chatgpt

Frequently asked questions

When is the best time to start receiving CPP payments?

When is the best time to start taking OAS payments?