The Canada Pension Plan (CPP) is a government-run pension plan that provides retirement, disability, and survivor benefits to eligible Canadians. If you’re eligible for CPP benefits, you may be wondering when the best time to start withdrawing is. Here are some factors to consider:
Your age: You can start receiving CPP retirement benefits as early as age 60, or as late as age 70. The longer you wait to start receiving benefits, the higher your monthly payments will be. However, if you start receiving benefits before age 65, your payments will be reduced.
Your financial situation: If you need the income from CPP benefits to support your living expenses, it may make sense to start receiving benefits as soon as you’re eligible. If you have other sources of income and can afford to wait, delaying your CPP benefits can result in higher monthly payments down the road.
Your health: If you have health issues or a family history of shorter life expectancy, it may make sense to start receiving CPP benefits as soon as possible. If you’re likely to live a long and healthy life, delaying your CPP benefits can provide you with a higher lifetime payout.
Your employment status: If you’re still working and earning an income, you may want to delay your CPP benefits until you retire. This can help you avoid reducing your benefits due to the CPP’s work cessation rules, which can reduce your benefits if you earn more than a certain amount while receiving CPP benefits.
Your spouse’s situation: If you have a spouse who is also eligible for CPP benefits, you may want to consider their situation as well. Coordinating your CPP benefits with your spouse’s benefits can help maximize your household income in retirement.
Ultimately, the decision of when to start receiving CPP benefits will depend on your individual circumstances. It’s important to consider your age, financial situation, health, employment status, and spouse’s situation when making this decision. You may also want to speak with a financial advisor or planner to help you evaluate your options and make an informed decision.
