Q&A: Taking early CPP benefits

Question: I will be turning 60 next February and I’m in a quandary as to whether to take reduced CPP Benefits or wait until I’m 65 years old. Several friends have recommended that I take early reduced benefits because the ‘break-even’ point of reduced benefits at 60 versus 65 is 84 years of age. That is to say although I would receive reduced benefits, it will be in my 84th year that all monies equal out. Are there considerations that I should take into account? – Bob E., Victoria BC

Gordon Pape answers: I assume that you will not be working
at that point. If you are, the question is moot because you can’t start claiming
CPP retirement benefits until you stop working, even if only temporarily.

When to start collecting is a tough call because no one knows how long they
will live. Your family’s medical history offers some guidance but few people
would base a decision on that.

My suggestion is that you focus on your financial requirements and forget
about long-term projections. If you will need the income next February, then
apply for the benefits. If you won’t, then hold off for a while. The amount
of your retirement pension will increase for every month you delay, right up
to age 70. And it’s always nice to know that source of income is available if
you suddenly require it.

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