If you’re like many Canadians, deciding when to begin receiving CPP payments is confusing. In this video, I’ll show you the break-even point for CPP, areas of concern to consider when to taking your CPP benefit, and a live walk-through of the governments’ Retirement Income Planning tool.
The first and most important consideration is; do you need the money? There’s really no point in calculating the break-even on collecting CPP when no matter the result, the issue is you need the income as early as possible.
The next consideration is Longevity. If you have a family history of living to older ages, say well into your 90’s, then delaying your CPP until age 70 is in your favor. However, early family history of deaths suggests taking CPP early to receive at least some benefit. If you choose to take CPP at age 65 vs age 60 it would take 106.7 months to reach break-even.
If you choose to delay until age 65 then by the time you reach age 73.9 you’re now benefiting financially from the increased monthly payments.
Everyone’s situation is different, and having a discussion with your advisor about your income need is the best course of action.
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