Deferring CPP makes NO sense!

Should you defer CPP? Find out here.

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DISCLAIMER:
The videos & opinions on this channel are for educational purposes only & do not constitute investment advice. Angelo Mantzios is not registered to provide specific investment advice (only conceptual) & as such does not provide recommendations. THE Financial Strategies Group sources out money management. Angelo, and/or THE Financial Strategies Group, is not responsible for investment actions taken by viewers & content should not be used as a basis for investment trades.

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Animation: Stephan Valent Instagram: @stephenvalent

Book Recommendations:
The Wealthy Barber by David Chilton

Never Split the Difference by Chris Vos

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[Tylerjames-vm]

I’m worried about retirement planning and I want to ensure a comfortable future. I’ve worked hard my entire life and I want to enjoy the fruits of my labor without financial stress. I’m really concerned about whether I’ve saved enough and invested wisely.

[jonl]

You missed a big part of the advantage of delaying CPP. CPP IS INDEXED FOR INFLATION. The larger the payout, the greater the increase over time that inflation adds to your CPP payment. Many pensions and investments are not indexed for inflation.

[MrXR]

I retired at 60, and my only income from 60 to 66 will be the meltdown of my RRSPs each year. From 66 to 70, my only income will be OAS ($618) + the full supplement ($1072) + TFSA if needed. Your RRSP is not your friend at retirement time, and if you take CPP at 60, that little amount will stay the same for the rest of your life. Unfortunately, most people spend more time planning their summer vacation than their retirement.

[lynnrush]

If you leave a lot of money in a RRSP when you die (because you have not been taking it out) your estate will be paying a large tax bill. This could mean you got less from CPP when younger and then paid more back to the government when you die. Everyone needs to do the math for their individual situation.

[blackwatch]

This makes no sense. It doesn’t cost you $60, 000 to wait until 65, it’s the same $108, 000 and you get it over 14 years either way.

[johnoa]

I am 73 I deferred CPP and OAS to the max., age 70. I continued working until age 71.
Before "doing what I did", I sat down and read the opinions of the various belief cults.
1 - take CPP and OAS ASAP.
2 - take CPP and OAS at age 65.
3 - defer OAS and CPP to the max.
I read about break even points etc.
Totally unsure which way to go.
Then the comment by someone cleared the arguments above off the table.
He basically said, "if you can defer, do so to get the maximum payout so that you can have the most cash for living" (I am paraphrasing).
He went onto say, "So what if you die before you reach the break even points...
"Who cares, because at this point you are dead!"
I loved it.
I decided I wanted maximum retirement resources. **** This is the most important thing ****
I worked, with good pay to age 71, Putting a few more years into my RRSP contributions. (Another deferral win).
I still think it was the way to go!
I liked my work, it paid well.

[RBittante-pp]

There are tax brackets to consider. You have to have start withdrawing at 70 and deplete by 90. The reason why you withdraw pension first because you want to reduce the tax bracket. You will be paying the government more tax.

[vzeq]

It does not make any sense to take CPP at 60 when you have a large sum in RRSP.
First, you have to withdraw your RRSP money (as much as possible as fast as you can).
I'm not saying to spend them. So, you better defer CPP and OAS in this situation and live out RRSP money.
One size does not fit anyone.

[tristanblackwood]

Taking CPP early or late depends on a lot of factors. Talk to a financial planner before taking your CPP.

[samspade]

There are a lot of factors that go into when to take CPP. One important factor to consider to delay to 70 is the 42% increase in those benefits. With the CPP inflation adjusted it will be higher than 42%! Another reason to delay when to take CPP is the guaranteed higher monthly income for the rest of your life. I think your video missed a lot of points about the benefits of delaying. I have met so many seniors who have told me they wished they had waited. And so many regret taking it early. Again this is dependent on a number of factors but in my cae I will draw down my registered accounts and delay until 70 for the guaranteed higher income for the rest of my life. And for those who ask what I think if I die early. Who cares, I’m dead. And with my registered accounts lower my estate won’t lose as much to taxes. Everyone has to look at their personal situation and decide. Too many just take the money early and regret it later

[michaelosborne]

If you just have savings like me, CPP is your only real indexed income. Think of CPP as insurance just in case you out live your savings, so maximize it.

[Imsosmrt]

As a former CFP, I sometimes wonder if I watch these videos out of some sort of masochistic impulse.

[alexanderdeclercq]

I just turned 60 and took my CPP now, one big reason is because i already have a fantastic federal military pension with indexing and a smaller PSPP (Public Service Pension Plan) also with indexing. My wife also get CPP & AOS. So i am sitting pretty as long as i have my health. Only been retired for about a week so far. I do not have RRSP i invested in GIC's and saving in my TFSA instead. All is good.

[rbrtr]

Fundamental math issue- you have to account for inflation with your expected earnings on the $60k, so you have to make much more than 6%.

With historical inflation rates of 2-3%, you need to make around 8.5% to stay even, and you cannot have any down years. If you have a -20% year at 65, you run out of money at 80 years. If you have 3 Zero growth years at 61, 62, 62, you run out of money at 77. If you have one Zero year at 61, you run out of money at 82. At 70, if you have a minus 10% year, while all the others are plus 8.5 %, you run out of money at 84. You have to manage this 60k your entire life and be good at it to match CPP. Meanwhile, defering CPP and spending the 60k in the meantime is way easier to manage, and if you mess up badly, go back to work.

How many of us average 8.5%, year after year. Not many. If your health is good or even middling, take the sure bet and defer your CPP.

[sunfun]

Everyone has different situations, me using up RRSP from 60 to 65 makes great sense full CPP at 65 is by far better.

[elbowstrike]

This sounds like the opinion of a financial management company that wants to collect their management fees for a lot more years.

[kevlar]

This is terrible advice. Glad this is the first video of this guy I watched, I won’t waste time watching anymore.

[johnmcdonald]

Most current avg life expectancy in Canada is 81.4 years, down from 81.6. I did not see the gender differential.

A new reality, some of us who have pensions, and homes, and savings (three jobs at one time), will have to use the CPP to assist family members if the current housing shortage continues, at least for a few years.

A lot of my friends are now "re-assisting" their adult chidren who are gainfully employed, but can't afford homes.

Everyone's financial needs are unique. I agree, educating onself is the best option moving forward.

Thanks for sharing.

[jasonricard]

Interesting video. Although he makes a small mention of this being case specific, it leans very heavily towards the “take cpp early”. I can tell you with absolute certainty having worked through many, many financial plans, that this is very case specific. The math being presented is telling a small fraction of the story. Bottom line is.. absolutely do not base your retirement plans on videos like this. Always, always work with a financial planner.

[blairkinsman]

I want to add some more math .. same example my CPP is $1000 taking it at 60 means $640 .. I’m still working and I haven’t (and won’t) maxed out my lifetime RRSP .. if I plan to retire at 67 and I start taking it at 60, I will receive (640x12x7) $53.8k into my bank account .. but, throwing that $640 a month with 3% inflation increase at my 8% RRSP gives me $79.0k at age 67. Calculating the depletion of that $79.0k fund (same 8%) at $440 a month to make up the difference (360 inflates to 440) the $79k fund is permanently self sustaining (it actually increases to $83.8k over the next 8 years) so there is no break even - and my kids get to keep it when I’m gone