Why Taking CPP Early Is (Usually) A Mistake

The CPP uptake decision is one of the most consequential financial decisions that most Canadian retirees will make.

The difference between optimal and suboptimal claiming can measure in the hundreds of thousands of dollars of expected lifetime income.

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[edwining]

I think when I retire my goal wouldn't be to optimize for expected returns, but to minimize the chance of running out of money from withdrawals at my desired lifestyle. Given that, the "guaranteed" returns provided from CPP deferral seem to be more valuable.

[papacharlie-niner]

Ben is asserting financial dominance. Ben tweets about CPP, people disagree like crazy. So Ben makes a video about CPP, comment section disagrees like crazy. So what does Ben do? Ben makes **another** video about CPP. The man has no fear.

[nwahally]

Why have I watched this? I am not Canadian. I don't even know anyone from Canada.

[FinaISpartan]

I think it's also worth noting that many retirees believe that funds are more important early in their retirement, when they're able to enjoy them, compared to later, when they are more sedentary

[jasonmacfarlund]

Thank you so much for these CPP videos. There's always been a lot of misconceptions and it's frustrating.

[edoardomontagnoli]

I’m Italian, I’ve never been in Canada, I don’t even know anyone from Canada but still interesting watching your videos Ben, thanks for your content

[FINEPOINTSOLUTIONS]

Thanks for the shoutout. Much appreciated Ben! Another excellent video.

[jb_makesgames]

Great video Ben - love your channel and delivery style.

[bryannacaldwellsoccer]

Amazing. Best run down I’ve ever heard. Thank you.

Only wrinkle I understand a lot of folks don’t qualify for full YMPE. I guess it doesn’t change the decision but the numbers can be smaller.

Your channel is great, thank you all the info over the years!

[IsaiahMutex]

Ben Felix the GOAT back with another upload

[chrisjeanneret]

I was researching YMPE in regards to both my CPP and DB pension. I agree that YMPE has outpaced inflation historically, but the difference has narrowed, I believe permanently. I agree with taking CPP as late as possible, but I have some high yielding investments in my RIF that I would like to hold on to.

[funkdoc]

Thank you! Definitely learned something here ❤. The 2022 example was fantastic.

[andrewjknott]

Income tax is huge, but also there is quality of life vs. money. Most people think it is better to have & spend money when they are 60 than when they are 85. Assuming there is enough money to not run out of funds before end of life, money spent at age 60 can provide more personal value than money spent at age 85. At 60 people can still travel, see family and more fully enjoy life. Most people who are 85 do not live independently and don't need extra CPP money to have a gold lined death bed.
And thank you for mentioning my main rebuttal: income taxes, especially when adding forced income through RRIF, OAS and CPP when compared to 50%+ marginal taxes at certain income levels.

[ChrisGerow]

With recent passing of a family member, I've been considering spending down investments early(live large), to avoid tax implications after death, also to maximize joy while healthy. Then take cpp later to cover basic living expenses until death. Still young though, plan might change when I reach retirement age.

[cleanairninja]

Great video! Thanks for talking about low income Canadians and GIS. CPP is considered income in regards to the guaranteed income supplement. 50% of CPP comes off GIS so waiting past age 60 makes no sense. RRSP withdrawals also come off GIS so it's like getting a 50% tax applied to your RRSP withdrawals. Not logical for low income folks unfortunately....

[robinimpey]

Another very informative video, thank you! Your holistic/common sense approach is why we use PWL. 👍🏻

[laed]

I personally waited until this Jan 2024 (@ age 70) to take my CPP and receiving $1, 754.48/Mo is a game changer for me. Now I have an inflation hedge that I can rely on for my goal of reaching age 100. Sleepin' like a baby in my "Depend" at night. 💰😄💰

[rosemarie]

Always interesting to see the comments. The fact is if you NEED the money of course you have to take it but hopefully not before 65. If you can manage than delaying as Ben has started is the best “financial “ decision. From what I get from people is that they want their money because they fear that they will not get their share before either dying or some illness that will render them unable to enjoy it. It is really fear that pushes people to take it all before 70. When people hear the stories of so and so dying after only one or a few years of collecting then they just can’t hear anything else - this is why many take early aside from the % of people who actually need it. Just my opinion

[taylordnd]

My grandpa's argument for claiming CPP early is that you can deposit it into your RRSP, and maintain some higher risk investing from it (or have it all go to family when he passes) - but he also has a pension and an RRSP to rely on if that doesnt work out

[jmc]

I know those who took it early due to limited income/funds. They spoke to a CPA thru family unlike many in that situation. Some take it early maybe from medical issues that sadly have a fairly known timeline/progression ie dementia or some cancers. But for most taking it later is prob beneficial. Good info like this video def help in one’s choice. What I’ve seen is many rely on friends or family for what to do. Good or bad.