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When Is the Best Time to Claim Your CPP?


Securing adequate monthly income is one of the main financial worries of Canadians nearing retirement. Canada Pension Plan (CPP) is one such monthly pension scheme that aims to replace a part of your income after you retire. You need to apply online or offline to receive the benefits. After you qualify for this benefit, you will receive the pension for your entire lifetime.

CPP, along with Old Age Security (OAS) are guaranteed regular income sources after retirement for Canadians.

The amount that you will receive as a pension will depend on the age you started your pension, your average annual earnings throughout your working life and your contributions. The pension amount will mainly depend on your income from age 18 to 65.

One can start receiving their pension at 60. However, the average age or default age to claim CPP is 65 years. On the other hand, few individuals claim their pension benefits at 70 years. You need to mention the age when you want to claim your CPP benefits during the application process.

This article will help you understand whether you should claim your CPP at 60, 65 or 70 as it has financial significance and affects your pension amount.

The default age to claim CPP is 65 years

The default age to claim the pension is 65 years. The best 39 years of your earning years are used to calculate the monthly pension amount. The average monthly pension amount is $736.58 from January to December 2021. The highest maximum monthly amount is $1,203.75.

Early Claim at 60 years

You can make an early claim for CPP benefits after your 60th birthday. The early claim may not be the best financial move as it can cause 36% cut in overall pension.

However, you can claim at 60 years if you are undergoing urgent financial requirements. It also makes sense to claim early if your health is failing you. If you are facing health issues, it would be a better option to apply for a CPP disability pension. If approved, you will get a higher pension than your regular pension amount.  

Delayed CPP claim at 70 years

If you can sustain your monthly requirements and maintain a healthy lifestyle, you can delay your claim till 70 years. The pension amount increases 8.4% every year after 65 years. So, you can take advantage of 42% increase on your monthly pension amount when you claim at 70 years. However, there won’t be any additional increase after 70 years.

The age to claim your CPP benefits will depend on various factors, comparing the different positives and negatives before deciding will help you decide the best age for you.

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