Age 65 Is The WORST Time To Start CPP

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Every situation is unique, and there are many good reasons to start CPP at age 65, but there are also some compelling reasons not to.

Is age 65 possibly the WORST time to start CPP? In this video we're going to explain why age 65 may be the WORST time to start your Canada Pension Plan benefit. We will take a closer look at how CPP is calculated, specifically the “actuarial adjustment” that incentivizes retirees to delay CPP, and how that “actuarial adjustment” creates a less of an incentive to take CPP at age 65.

In the video we’ll mention a detailed CPP breakeven analysis, if you want to see that analysis in more detail, use this link…

In this video:
- How is your CPP benefit calculated at different start ages
- Age 60 vs 65 vs 70
- Annual increase in CPP both in $'s but also %'s
- Why you should do a personalized CPP estimate for your situation

Disclaimer: This video is for educational purposes only and does not constitute investment advice or financial advice. All information provided is for illustrative purposes only and you should not rely on such information as the primary basis of your investment, financial, or tax planning decisions. Every effort has been made to ensure the accuracy of its contents. No representations, warranties or guarantees are made as to the accuracy of any estimates or calculations provided. Nothing in this material should be construed as investment or tax advice, or a solicitation or offer, or recommendation, to buy or sell any financial product or securities. Before making any financial decision, you should review your situation with a financial planner.

[maxpayne]

Excellent analysis and explanation 👍 I haven’t seen anyone explain it this way and so clearly. I have a question about the Adviice platform’s CPP calculation. Is there a way to identify the CPP years that can be removed from the calculation due to a maternity leave? My wife took 10 years in total out of the workforce to stay home with our 2 kids.

[robthesailor]

I appreciate the video. Very clear and concise. The one key point that often is failed to be mentioned is that all of those increases in payments are at zero investment risk. Every alternative that you mentioned have a higher than zero risk for exceeding the returns from waiting/delaying CPP. For the conservative investor who does not need the money from CPP to make their budget work, or have a known shortened life expectancy, I cannot think of an alternative no risk investment that can guarantee the same or greater returns than being offered by CPP to delay until 70. Audits conducted on CPP show stable for at least next 75 years, so chances of them not providing my pension increases are negligible.

[paulinanelega]

re: Nominal Calc: Shouldn't the 2.1% inflation adjustment be applied to Column C, and then calculations extended out, rather than adding it as a simple % to Column F?

[Jacquie_Kirk_]

Widows be careful! My husband died at 40, when I did the math, it made sense for me to take it at 60 because with my husband CPP It hit the max, so no sense

[quepasa]

I took mine at 60 to reinvest the money as it loses value, bought metals and income stocks. My wife still works making good money and my health isn't good so whatever.

[dilligaf]

Well, I don’t have a choice but to take it at 65 I went on disability at 59 and that ends at 65 so not much of an option for me

[bugsyboy]

So I’m retiring at 61 and deciding to live off my non-registered savings until 65 at which point I will take my CPP. I will get more CPP than if I were to take it at 61 when I retire - is this correct?

[merylprice]

Im 57 I retired at 55 and had thought 60 or 61 for CPP as Im no longer earning. Will the numbers be accurate now if I request them?

[garth]

Interesting video. After looking at many financial info videos like yours the one thing I've learned is there are no perfect choices for everyone. Each person is different.
Eg. There's a philosophy that you should meltdown your RRSPs and live off that income and delay CPP until 70. If I do that ill be taking $25000 / year from age 60 .thats enough to bump me into tax bracket and results in significant OAS clawback, so its a loose loose for my situation. Ill take it age 63. My estimate shows $1000/ month. At 65 my Bridge benefit drops ( 900) but ill get 1000 from CPP so zero changes in lifestyle then at 65 OAS kicks in and i stay in the same tax bracket and get a much smaller OAS clawback.

My point being..there is no magic bullet. Look and listen to these videos and then apply what you've learned to your own circumstances. Above 65 you really shouldn't be considering INVESTMENTS other than very conservative ones ( high interest savings account or GICs) because you will never recover significant losses because you're life expectancy now plays a significant role

[OptimisticHominid]

Great video! Here's my increases (without inflation) with only 24 years of contributions prior to retirement:
60 n/a
61 8.66%
62 7.61%
63 6.76%
64 6.06%
65 5.47%
66 8.40%
67 7.75%
68 7.19%
69 6.71%
70 6.29%

I'm considering starting my CPP at age 62 or 63. My plan (a complex spreadsheet) indicates that I may do better to wait until age 67, but the benefit of doing so is just $2, 200 (at today's value) extra inheritance, dying at age 85, between our three kids. Dying just three months earlier would wipe out the potential gain of delaying to age 68.

[wwoodcox]

Great video. There are other reasons to delay CPP and OAS.. When collecting survivor CPP delaying may get you more over your lifetime. Delaying OAS may reduce any claw back as your max will be higher, and your income at 70 may be smaller.

[billyrock]

Age 70 for OAS and CPP is the sweet spot. ✅

[sarblade]

This is sure one way to look at considering when to take CPP. I think the person considering really needs to know death expectancy. If you believe your life can extend towards 90, and you expect to be in excellent health to say 85 and p[lan to do most of your spending between 70-85, then delaying until 70 is still the wisest move. If you need the money to live on and thinking you will have to continue working until 70, then taking the money at 60 is a better option. If the person doesn't need the income, but thinks they can out perform CPP with an investment strategy then take at 60. I think this "incentive" strategy is nice to know about because, like you said, you're leaving money on the table the year before if you don't take CPP. That's always the case. 65 is the turn around year the government decided, it could easily have been 67. Then 67 becomes the worst incentive year to take CPP. Tomato, tomatoe

[jeffreyadams]

Grade 3 math will show that taking CPP at 60 yrs. Makes the most sense.