: Hi, I’m 59 years old and fully employed. My annual salary is $70,000. I don’t have a registered retirement savings plan or other investments, but I do have a small pension from my employer that will pay me about $1,500 a month at age 65. I still have a mortgage of $200,000 at 2.4 per cent, as well as annual bill payments totalling $22,000.
Ryan, you can take CPP as early as age 60, but you’ll receive reduced benefits. If you wait until you turn 65, you’ll receive your full benefits. You can also choose to delay your benefits until age 70, which gives you increased benefits. You can receive CPP retirement benefits at age 60 while continuing to work and your CPP contributions while working will permanently increase your benefits the following year and ongoing.
Every month below age 65 that you take CPP means a decrease of 3.6 per cent monthly , for a 36-per-cent total decrease if taken at age 60. For example, instead of receiving the age 65 monthly maximum of $1253.59, you would receive about $802. That amount will be the permanent amount for your lifetime other than inflation adjustments and possible additional contributions if you work to age 65.
Now, if you wait until age 70, your age 65 amount increases by 8.4 per cent annually, or 42 per cent at age 70. Instead of $1,253.59, your age 70 benefit would be about $1,780. But it’s not just about waiting for the larger amount. Some people might have a reduced longevity or have few other income sources. Not everyone will qualify for the maximum benefits since it’s based on your years of contributions and the years of maximum qualified income .