Do you have other sources of income? There may be other sources of income you can rely on to support your retirement. You may decide to delay receiving your CPP pension if you have sufficient income or resources for a comfortable lifestyle, such as employment income, rental income, or the projected income from an investment portfolio.
CPP benefits are indexed and guaranteed for your lifetime. The longer you wait, the higher your benefit payments will be. Individuals who are already reporting a higher level of income, may also decide to delay their CPP pension so as not to push their reported income to a level that would trigger a claw back to their Old Age Security OAS pension.
Are there any immediate financial needs? Do you have any immediate financial needs? Everyone has a different financial picture, and while some can afford to start collecting later, some may need to take payments as early as possible. The decision about when to start collecting should be considered as a part of your overall retirement plan.
Speak to your advisor to develop a plan to help you attain your retirement goals. You Have Stopped Working : If you are under 65 and are still working, CPP contributions are mandatory and will increase your future retirement income.
Also, if you are still working, the additional income from CPP may bump you into a higher tax bracket. CPP dropout provisions allow you to exclude up to 8 years when your earnings are the lowest. There is a longevity risk that you may live longer than expected and have to make do with the reduced benefits permanently.
If your main reason for taking CPP benefits early is so you can invest the funds for higher returns, take a moment to consider reality. Is your risk tolerance a match for a portfolio that returns 7. The fact is that not much out there is as guaranteed as your government-paid and inflation-indexed CPP benefit.
You should expect a decision between 7 and 14 days. Paper applications take longer to process and may take up to 3 months. Sign up now to join thousands of other visitors who receive our bi-weekly newsletter and latest personal finance tips. Enoch Omololu is a personal finance expert and a veterinarian. He also has an MSc. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. His top investment tools include Wealthsimple and Questrade.
I have read many articles on this over the years and this has been one of the best. You should be debt free with a lot of money to spend as you are such a great investor. Here though, when one spouse dies the remaining spouse get the higher of their benefit or the dead spouses for the rest of their life. So if there is a big difference in the amount one spouse gets then another consideration is to delay taking the larger spouses benefit until age 70 because usually at least one spouse will live to an advanced age and the larger benefit will pay out the lost money from the delay.
That may not work with CPP. You guys up North usually have a better designed system than we do but maybe in this case they are about the same. I have been toying with the idea of whether to take it or not. This makes sense to me. Search for:. Share 4. Shares 4. File with confidence and accuracy - Canada's 1 Tax Software. Start for Free Pay only when you file Start for Free. Pay only when you file. Sign In Start or Continue my tax return.
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