Why Taking CPP At 65 Is A Bad Decision? Why Should You Take CPP At 60 Rather Than 65?

Why Taking CPP At 65 Is A Bad Decision? Why Should You Take CPP At 60 Rather Than 65?

Why Taking Cpp At 65 Is A Bad Decision? Why Should You Take CPP At 60 Rather Than 65? Deciding when to start receiving Canada Pension Plan (CPP) benefits is a crucial financial decision that can significantly impact your retirement income. While many opt to begin CPP at age 65, this may not always be the best choice. In this post, we delve into the reasons why taking CPP at 65 might be a bad decision and explore the top considerations for initiating CPP at age 60 instead.

Understanding CPP Payments

Before delving into the reasons against starting CPP at 65, it’s essential to grasp the impact on monthly payouts based on the chosen age. Initiating CPP at 60 results in a maximum reduction of 36%, significantly affecting the monthly benefit. Conversely, delaying until after 65 increases monthly payments by 0.7%, offering a higher income during retirement.

Reasons Against Taking CPP at 65

1. Financial Considerations

Commencing CPP at 60, despite the 36% reduction, might be necessary for individuals facing urgent financial needs. This decision can provide crucial funds immediately, especially if personal savings or alternative income sources are insufficient to sustain one into their 60s.

2. Reduced Life Expectancy

For those anticipating a shortened life expectancy due to health issues or genetics, initiating CPP at age 60 makes financial sense. Recognizing the breakeven point for early CPP take-up becomes pivotal in such scenarios.

3. Low Earnings History

Individuals with eight or more years of low earnings, stemming from job gaps due to education, disability, job loss, or other reasons, may benefit from starting CPP early. The CPP credit system plays a role in determining the overall benefit, making early initiation a strategic move.

See also  Fed Interest Rate Cuts 2024 | Anticipated Timeline and Potential Impact

4. Qualification for GIS

Anticipating eligibility for the Guaranteed Income Supplement (GIS) adds another layer of justification for starting CPP at 60. Seniors with low to moderate incomes can receive income support through GIS, making early CPP initiation a beneficial choice, even for those still working full-time.

5. Continued Employment Between 65 and 70

Delaying CPP until age 70 is often advisable if you plan to continue working between the ages of 65 and 70. This decision can maximize your CPP benefit while still earning income.

Final Considerations

While the decision to commence CPP at age 60 has its merits, personal finance is inherently subjective. It’s essential to weigh the pros and cons, considering individual circumstances and preferences. Whether starting CPP at age 60, 65, or 70, a comprehensive assessment ensures that the chosen path aligns with personal financial goals.


Understanding the implications of initiating CPP at different ages is crucial for making informed decisions about retirement income. This post aims to shed light on why taking CPP at 65 may not be the optimal choice and provides insights into when starting CPP at age 60 might be a more strategic decision. Ultimately, the decision should align with individual financial circumstances and long-term objectives.

Similar Posts