Q & A: Drawing CPP

A reader wants to know: Is it a good idea to start collecting benefits as early as possible?


Question: I’m reading your Tax-Free Savings Account book and getting a ton of information from it. I would like your advice on the CPP. Should a person start receiving that at age 60 or wait until 65? Also, would you advise putting these cheques each month directly back into TFSA or RRSP?  —Colleen


Gordon Pape answers: There is no easy answer to the CPP question. It depends on a variety of factors including your health, life expectancy based on family history, whether you need the money, etc. Remember that if you take payments early, you will get less and you will still have to keep contributing to CPP if you continue to work.

If you do draw benefits early and don’t need the cash, by all means invest in an RRSP or TFSA. The RRSP tax deduction would offset the tax owing on the CPP payments. – G.P.

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