Why You Should Delay Taking Your CPP

Only about 2% of Canadians delay taking their CPP benefits and I believe that a lot of Canadians could benefit from delaying this until after 65.
In this video, I try to reframe the way you view your CPP payments to understand how valuable it can be to delay.

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DISCLAIMER: All content being published on this platform are for informational and entertainment purposes only, and do not constitute formal financial, accounting, nor legal advice. Kent Tilley does not hold formal education nor registry to be held accountable for any professional recommendations – those in need of formal financial advice/ planning must seek help from licensed professionals. Kent takes pride in the sense of freedom, satisfaction, fulfillment, and empowerment that financial competence that he has built through conscious management of his family’s money. With this, there is no guarantee that the overall content found here are appropriate or applicable for every individual. By proceeding, you agree to hold Kent harmless from any ramifications, financial or otherwise, that may occur to you by acting upon the information found on this platform.

[robertroy]

Yes meltdown RRSP first then start CPP makes good sense Robert from Sault Ste. Marie

[darinpearson]

Hi Kent, I am subscribed to your channel but I don't watch your videos in order, as they are released. Consequently, I am watching this video on Nov 30, 2022. The way you presented this information audibly with the inclusion of the graphics on the screen was excellent. I took a screenshot of the final graphic for future reference. Very well presented. You are providing a really valuable framework for people to consider their personal financial situations. Thank you.

[ronwright]

Great video and explanation. There is far more to it than just the numbers, the "security" of having an increased CPP for life after 70 is hugely comforting. If you have enough to fund the first 5 years of retirement, from 65 to 70, this all makes sense. This is how I have already set up my financial plan for RRSP Drawdown, to start adding CPP & OAS at 70. I for one will be doing this.

[dvq]

I love it when your vids pop up on my youtube feed, great video

[samspade]

I can’t believe how many people advocate taking it early with poor arguments. Of course take it early if you have poor health. The claim it won’t be around in the future is lame. They have required employees and employers to increase their contributions. Also more people have moved to Canada. If you have funds to allow you to delay taking it makes the most sense. Delaying it allows individuals to offload longevity and inflation risk onto the government.

[ImVeryBrad]

My Grandpa is 97 and still going strong. He told me the government curses his name because he has been paid for so long haha

[billsekhon]

Thanks.. great info.. most people underestimate how long they are going to live and have no plan.

[kentucker]

Statistics canada say average life expectancy is 82-84, What is the breakeven point for taking at tne 3 l3vels.

[oneballwill]

Great video KT! I think it would be fun to do an analysis on when to take CPP for expected GIS recipients too.

[BRASS]

well thought out to see the difference between taking ccp at 60 vs 70

[robinmanser]

We will use the go go, slow go, and no go strategy along with RRSP meltdown strategy. in the no go phase (above 80) you will not need as much money. If you have a pension, add CPP and OAS and it is above your projected income requirements then I feel you should take it earlier than 70. Our estate will be our principal residence and a vacation property when we meet our maker.

[paulmcmillan]

Good analysis. Just one point on break even. Using notional break even analysis does not get to the main issue in delaying even to age 65. What people should be evaluating is how much guaranteed indexed income they need monthly to ensure their lifestyle to death. CPP is an insurance program, which guarantees a minimum income floor. Investors generally cannot equal the guaranteed indexed increase for deferring CPP in their RRSP investments. We all like to project we are great investors, however, few investors can guarantee an equal outcome gained by delaying CPP at least to age 65 where there is no penalty for stating CPP.

[dosso]

Great video! Thank you for looking out for the the “Average Joe.” Many advisors on YouTube speak about their clients with millions in properties, investment, etc. It can be so discouraging.

[terryevp]

Thanks, Kent. It's a great video...!!! Totally make sense to delay the CPP to 70.

[charlesvanderwoude]

Very strong way to frame this pension. My advisor recommended this to me also.

[chelseas]

Makes a ton of sense and thank you also for pointing out the conflict of interest when advisors want to keep more of a client's money invested (against the client's best interest) rather than spending it out to fund early retirement. It's psychologically a tough one to wrap your head around, and scary to use up your own money (that feels "real" compared to money that feels at the whims of a third party). I also think folks worry about dying earlier and not having recieved a fair benefit in their lifetime, but makes a lot more sense to worry more about having maximum support if you live a long time than if you die early.

[Ian-ofoi]

Man totally in related but I am contemplating selling my house in the near future and investing the money. If I am reading this right and I doubt I am “eligible” dividends are tax free? So I could sell my house for say 250k and invest in let’s say BMO. They currently pay a 4.4 percent dividend giving me 11, 000 CAD tax free? I must be missing something. My TFSA and RRSP accounts are full so it would be non registered. Also I would probably diversify inside that account and not just by BMO. Happy Sunday.

[oneballwill]

What is the assumed growth rate on the hypothetical RRSPs in your examples KT?

[juliepierce]

I have a question for you.
I'm a retired RN.
I had to retire at the age of 50 due to an injury.
For this, I receive a monthly income through my LTD insurance.
So when I choose when I'm going to take my CPP, I have additional things to consider.
Today I'm 58 and have become even more disabled.
So when I consider my options for the smartest time period to start taking it, I feel lost.
This is because it has come to my attention that with receiving my current disability monthly payments, I am not allowed to make any money from any source.
This includes my small nursing pension through HOOP.
So, if I was to take out my CPP now (58) or in my 60's, my insurance payments will drop every month also by the full amount of my CPP.
For example only: My monthly disability insurance payment = roughly $3, 000.
My nursing pension is roughly $600 monthly - however - my disability insurance will subtract the entire $600, down to the penny until I turn 65.
When I turn 65, I will no longer be receiving the disability insurance of $3, 000 ... making me very poor.

So my question is, "when" is the smartest time to request my CPP.
Also, one thing I recently learned from the CPP Office themselves when discussing such issues, is this interesting (but unexpected), is the fact that even though "I" built my CPP, whenever I pass away that money gets put back in a government pot within the department of CPP !
IT DOES NOT GET PASSED ON TO MY CHILDREN !!
How is this at all legal ?

Thanks

[deanduggan]

What is the min cpp you can get if you only worked min wage jobs