Reasons To Take CPP Early That ARE NOT VALID

There are a lot of reasons why people want to take their CPP early, but for pretty much all of you watching, it is going to be best for you to delay starting your CPP. Make sure you have a plan that runs through all of the different options so that you can see with your own eyes that delaying CPP is the best option for you!

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TIMESTAMPS
0:00 - Intro
0:53 - Investing Academy
1:20 - Why People Don't Defer CPP
1:41 - Reason 1: Fancy Package
2:50 - Reason 2: Magic Number
3:22 - Reason 3: You Were Told To
5:23 - Reason 4: CPP Is In Trouble
6:24 - Reason 5: Emotions

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DISCLAIMER: This presentation is for informational purposes only and should not be considered financial, investment, tax, or estate planning advice. All investments carry risk, and past performance does not guarantee future results. Any forward-looking statements are based on assumptions and may not reflect actual outcomes.

The content on this channel is for educational purposes only and does not provide specific investment or planning recommendations. Viewers should consult a qualified professional for retirement, tax, or estate planning guidance. Parallel Wealth and Adam Bornn are not responsible for any decisions made based on this content.

[kimh]

I am glad you mention Fred Vetesse. His writings are so encouraging. They broke through my decades-long fears that I will end up poor and bedsore-ridden in a cockroach infested nursing home in soaked days-old diapers if I don't save 1.3 million dollars. He says the adage that our retirement income needs to be 70% of working years income is wrong; in fact retirees who had children and own their own home live adequately on 45 to 55%. This exponentially reduced the retirement savings I needed, because the CPP and OAS benefits thus provide a much larger proportion of my income. I have been retired four months now, and I can tell you he is right! I hope you do get him on the show.

[rayeckert]

I took my CPP at 60. Being single when I die my pension dies and my estate gets $2500 death benefit.
By taking it early I’ve been able to collect $900 monthly for 60 months.
That’s over 50 K that I’ve invested and has grown in value.
To me it was a no brainer to take it at 60

[BassByRon]

I don’t know how you do it, Adam, but your topics are so fine-tuned. Seriously.

[stevenpaul]

Someone told me that it's the best time to buy because there will be a huge pump

[neolithic]

On your recommendation, I just reserved this book at the library!

[mikep]

Great video! I'm melting down my RRSP at the moment. So, I'm deferring until 70 to avoid the higher taxes.

[brucecampbell]

Good points but I think this comes down to a personal decision. Do you want the money when you can do something constructive with it or do you want the money later in life when the possibility of poor health and just existing rather then living is a high probability for a lot of people. You are not going to live forever no matter how healthy you think you are. Things can change in the snap of a finger tomorrow for anybody at any time.

[CanuckDividends]

Nice explanation of CPP benefits and the advantage of taking it later. I will be ordering this book to read

[joevenuto]

Well done, as many times as I hear the same strategy, there is always a slight or little nuance that comes out. Great drill down and sound advice.

[pwong]

As always great video and it has generated lots of individual comment making it more interesting to read. 👍👍👍

[OscarHanzely]

I am super happy about the contribution partnership between Brandon beavis and Parallel Wealth. Two incredible contributors in Canadian financial market. Subscribed to both and both channels are great complement to each other. Love the news!

[murraytown]

I tend to agree. Thoughts would be welcome on delaying CPP and its impact on the OAS clawback, especially for those with indexed DB plans. Also, additional non-contributory years for early retirees. Highly recommend Fred’s book.

[scottmcmanus]

Great video. The problem of people not wanting to draw down their retirement savings is a real issue. There is a famous (ahem, among us weirdos that are into retirement planning) study that was conducted in Australia that examined retirement spending for a large group of retirees over decades. The study found that the AVERAGE retiree in the study died with the SAME AMOUNT of money that they had retired with. In other words, they only spent their investment earnings in retirement. That money of course eventually passed on to family, charity, etc., but this study should wake up anyone that thinks that people can rationally draw down their savings in retirement without the help of straight shooting good guy advisor (like our man Adam here). So many of those retirees sacrificed so much enjoyment in retirement so their number on a piece of paper wouldn't go down, and even if they wanted to use that money to help their kids they could have given it to the kids while they were alive to see the benefit. It's a real shame, IMO. Keep preaching, Adam, your approach is going to help a lot of real people.

[garth]

I just left a meeting with my advisor. We had this specific conversation. He advised me to start CPP at 60..not 65 or 70. I also asked about starting RRSP withdrawals at 60 and he agreed that was also good..he actually used Adam's 3 phases of retirement..Go Go, Slow Go and No go. He stressed the break even point gets extended because I have DB pension with a bridge to 65..the bridge being the exact same as my CPP if taken at 60. So I can get 9 k a year for 5 years plus the bridge benefit ..at 65 my bridge drops off but CPP fills the difference..OAS becomes a bonus. In affect my income coming in remains the same at 65 as now but I would have collected 45, 000 . You don't have a guarenteed life span ... burning through your money early and getting more money from the government later may not pay off if you die at 78. Having 45, 000 in government money before 65 if invested can get you a bit further a head. Its really a personal decision. I was actually thinking of starting CPP at 65 until today. There is also a slight adjustment in my CPP estimate because I retired at 54..most people retired at 65..so I would have additional drop off years and those extra years affect my CPP estimate.

[JK-rvtp]

Another great video! I think you should add and hammer home a key fact; you are getting what is effect an annuity with UNCAPPED CPI indexing, something you can't buy from an insurance company at any price. For us the deferral strategy, with the EQ Bank cash set-aside already in place, will reduce the market-exposed portion of out income from roughly half to roughly 1/3rd of total income (CPP/OAS + DB pension + investment income), and the guaranteed CPI indexed portion of our income, bridged in the meantime from the cash set-aside, from roughly 1/3rd to roughly half. This means a 50% market crash, that drops my investment income by half, only drops our total income by 1/6th. I can now relax a bit with my investments, and use a slightly higher risk profile in my asset allocation than I might otherwise.

[hilzabub]

One reason I'm reluctant to defer is that my wife is likely to live at least a decade after I die. Survivor benefits don't increase with deferral, so I would be reducing assets she may need to use to cover expenses after I go.

[svenhodaka]

One consideration for expenses in the “No go” stage. If you want to remain in your own home when you require Home Care services (particularly overnight assistance) you’ll require a significant amount of income. This could be similar to robust travel spending in your “Go go” years. Of course, our social programs combined with family and friends will take care of us. However, to have a combination of public and private Home Care services, which you get to choose, will require higher levels of guaranteed income as we age.

[DcArmy]

I see it mentioned all too often and with validity for Finances, to wait to later in life. But my reason is simple why wait if the outlook in life is not always promised I could expire before 70 amd collect 0$ or collect at 60 even reduced my break even point is 72(compared to a draw at 65)..from 72 on I am not in need of as much money so it matters little to have gained 20k over my lifetime of CPP (assumed 90 yrs old is often the age used for calculation). I think there needs to be a discussion on what the difference is for collecting early vs 65 and life expectancy more in the norm range of 80-85..

[ddavidson]

I have been recommending Fred Vettese's books for years. He has 3 that I've read "The Real Retirement: Why You Could Be Better Off Than You Think" that he coauthored with Bill Morneau (yes the former Finance Minister), "The Essential Retirement Guide: A Contrarian's Perspective", and the one you mention in your video "Retirement Income for Life" which is now in it's second edition. All of them are excellent but if you are only going to read one "Retirement Income for Life" is the one to read.

For those that want a sample there is an excerpt of "Retirement Income for Life" that was published in the Globe & Mail February 14, 2018 with the headline "Is a 70% retirement replacement income target too high" and is still available on-line. Shockingly, at least to me, comments I made about retirement finances that appeared in Rob Carrick's personal finance column in the Globe and Mail on August 4, 2017 are included in this book.(I have no special qualifications, I'm just a retired guy that made a comment on one of Rob Carrick's columns).

[mydviews]

Reason for taking early not mentioned is health. Not everyone lives beyond 70. My Mom took it at 60 and didn't make it to 65. Had she waited, she would have got zero out of it.
Another strategy could be to take the money from CPP and put it into investments in your TFSA. When you hit 70, you could have a fairly large fund that is now tax free when you withdraw it.