Should You Take CPP at 60, 65, or 70? The Ultimate Guide to Maximizing Your Canada Pension Plan Benefits

Deciding when to take your Canada Pension Plan (CPP) benefits — at 60, 65, or 70 — can significantly affect your lifetime income. This expert guide explains how timing changes your monthly payment, the pros and cons of early vs. delayed CPP, and smart strategies to help you maximize your retirement income in 2025 and beyond.

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Canada Pension Plan

For most Canadians, the Canada Pension Plan (CPP) is one of the cornerstones of retirement income. But one critical decision can make thousands of dollars of difference over your lifetime: when should you start collecting CPP — at 60, 65, or 70?

Starting too early can reduce your monthly payout for life, while delaying can supercharge your retirement income if you live long enough. With life expectancy rising and inflation indexing protecting benefits, understanding how timing affects your CPP is more important than ever in 2025.

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“The biggest mistake retirees make is treating CPP like a use-it-or-lose-it benefit,” says David Armstrong, CFP, Senior Retirement Planner at WealthMap Canada. “It’s not just about when you retire — it’s about how long you expect to live and what other income you’ll rely on.”

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Let’s break down the rules, payment adjustments, and smart strategies so you can make the best choice for your situation.

Overview – When You Can Start Your CPP?

Age to Start CPP	Adjustment (vs. age 65)	Monthly Benefit Impact	Ideal For
60	36% reduction	You get 0.6% less per month before 65	Those retiring early or with health issues
65	Standard rate	Full entitlement based on contributions	Average retiree with stable health
70	42% increase	You get 0.7% more per month after 65	Healthy retirees or those with other income sources

How CPP Works?

CPP is a contributory pension — meaning you only get what you’ve paid into the plan (plus returns). If you’ve worked in Canada and earned income above $3,500 per year, you’ve contributed a portion of your paycheck to CPP. Your employer matched that contribution.

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The amount you receive depends on:

• How long and how much you contributed
• When you start benefits
• Average earnings over your working years

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In 2025, the maximum CPP retirement pension at age 65 is approximately $1,364.60 per month, while the average amount Canadians actually receive is closer to $758.32.

Taking CPP at Age 60: Pros and Cons

Pros

• Immediate income: You can begin collecting payments as soon as you turn 60, providing extra cash flow if you’ve retired early or been laid off.
• Freedom and flexibility: Early access can help cover expenses while waiting for other benefits like Old Age Security (OAS) or private pensions.
• Health concerns: If you have a shorter life expectancy, taking CPP early ensures you receive the money you paid into the system.

Cons

• Permanent reduction: You lose 0.6% per month (7.2% per year) before 65, resulting in a 36% cut if you start at 60.
• Lower lifetime income if you live long: Those living past their early 80s could lose tens of thousands in potential income.
• Tax impact: CPP is taxable income — taking it early may push you into a higher bracket if you’re still working.

“Many Canadians underestimate how long they’ll live,” says Elaine Roy, Actuary at PensionMatters Canada. “Taking CPP early might seem safe, but over 25 years, the cumulative loss is massive.”

Taking CPP at Age 65: The Standard Approach

At 65, you receive the base CPP amount based on your lifetime contributions. This is the “normal” retirement age most Canadians plan around.

Advantages

• Balanced timing: You avoid penalties or bonuses — it’s the neutral option.
• Works well with OAS: Both CPP and Old Age Security (OAS) typically start at 65, creating a predictable income base.
• Easier financial planning: Many workplace pension schemes and RRSP withdrawals are designed around age 65.

Disadvantages

• Missed opportunity for higher income later: You forego up to 42% more monthly income if you delay until 70.
• Risk of inflation erosion: While CPP is indexed annually, starting too soon might not keep pace with late-life expenses.

Delaying CPP Until Age 70: The Power of Patience

If you can afford to wait, delaying CPP until 70 can be one of the smartest retirement moves.

Why?

• You earn a 0.7% increase for every month you delay past 65.
• That’s a 42% increase in your monthly payment by age 70 — for life.

Example:

If your CPP at 65 is $1,000 per month, waiting until 70 gives you $1,420 monthly for the rest of your life.

When it makes sense

• You’re in good health and expect to live past 82 (the “break-even age”).
• You have other retirement income sources like RRSPs, workplace pensions, or part-time work.
• You want inflation-protected guaranteed income in your later years.

“Delaying CPP is like buying an inflation-indexed annuity from the government — and you can’t outlive it,” explains Robert Mahoney, Chartered Financial Analyst and retirement consultant.

Comparing the Scenarios

Scenario	Start Age	Monthly Benefit	Annual Income	Lifetime Income (to age 85)
Early Start	60	$872	$10,464	$261,000
Standard	65	$1,364	$16,368	$327,000
Delayed	70	$1,937	$23,244	$349,000

(Based on maximum contributions and 2025 payment rates; assumes 2% annual inflation.)

CPP Break-Even Analysis

The break-even point is when the total income from delaying CPP surpasses what you’d earn by starting early.

For most Canadians:

• If you live past age 82–83, delaying CPP to 70 pays off.
• If you have health concerns or reduced life expectancy, taking CPP early may be better.

Simple Rule of Thumb:

• Retiring early? → Take CPP early.
• Still working? → Delay CPP.
• Expect to live long? → Delay as much as possible.

How Taxes and OAS Affect the Decision?

Remember, CPP is taxable income, and it can influence how much Old Age Security (OAS) you receive later.

If your total income exceeds $93,454 in 2025, OAS begins to claw back at a rate of 15%.
Delaying CPP can help you manage taxable income earlier in retirement and maximize benefits later when OAS kicks in.

CPP and Inflation Protection

CPP is automatically indexed to inflation each January, meaning your benefits rise alongside the cost of living.

This makes delaying CPP even more valuable — a 42% higher base payment means future inflation adjustments are larger too.

“If you have longevity in your family and strong savings, waiting until 70 is almost always best,” says Carla Jensen, CFP, at Retirement Income Strategies Group. “But if you need the cash flow or face medical uncertainty, starting earlier makes perfect sense.”

Strategies to Maximize Your CPP

1. Use RRSP withdrawals early: Draw down RRSPs between 60–70 to reduce taxable income later.
2. Delay CPP strategically: Even delaying 1–2 years boosts lifetime benefits significantly.
3. Combine with spousal planning: Coordinate start dates with your spouse to minimize taxes.
4. Track your contributions: Use My Service Canada Account to check contribution history.
5. Integrate with OAS & GIS: Align your CPP start date to avoid overlapping high-tax years.

Why the Decision Matters?

Choosing when to start CPP isn’t just about monthly cash — it’s about security, longevity, and tax efficiency.
The right timing can add over $100,000 in lifetime income, while the wrong one can shrink your retirement comfort.

“CPP timing is one of the most important retirement decisions you’ll ever make — more than investing or even when to downsize,” emphasizes Dr. Nina Patel, Professor of Retirement Economics at McGill University.

Frequently Asked Questions