CPP Timing: Should You Take It at 60, 65, or 70?

One question comes up more than almost any other in my practice: "When should I start taking CPP?"

It sounds simple. It is not. The answer depends on your health, your other income sources, your tax situation, and whether you are still working. Getting it wrong costs tens of thousands of dollars over a retirement.

Here is what you actually need to know.

How CPP Works: The Basics

You can start CPP as early as age 60 or as late as age 70. The standard age is 65. Every month you take it early reduces your benefit. Every month you delay increases it.

Start Age	Adjustment	Example Monthly Benefit*
60	−36% (0.6%/month early)	$704
65	No adjustment	$1,100
70	+42% (0.7%/month late)	$1,562

*Based on an illustrative maximum benefit of $1,100/month at 65. Your actual amount depends on your contribution history.

The Breakeven Math

The breakeven point is the age at which the total lifetime payments from delaying surpass the total from starting early.

If you take CPP at 60 vs. 65: you collect 60 extra months of payments early, but at 64% of the rate. You break even at roughly age 74. Live past 74, and waiting to 65 wins.

If you take CPP at 65 vs. 70: you forgo 60 months of payments, but at a 42% higher rate. You break even at roughly age 82–83. Live past 83, and waiting to 70 wins.

The Case for Taking CPP Early (Age 60)

There are legitimate reasons to take CPP early. Do not let anyone tell you it is always the wrong answer.

• Poor health or family history of shorter lifespan. If you have reason to believe you will not reach your mid-70s, taking CPP early likely makes sense.
• You need the income now. If you have retired early and have no other income sources to bridge the gap, CPP at 60 may be necessary.
• You are still working. Before 2012, taking CPP while working was complicated. Now you can — but if you are still employed and earning well, adding CPP income on top may push you into a higher tax bracket needlessly.
• Investment returns argument. Some advisors argue you should take CPP early and invest the difference. This can work if your investment returns consistently beat the CPP deferral rate — but that is not guaranteed, and CPP is indexed to inflation.

The Case for Waiting Until 65 or 70

For most of my clients — professionals, engineers, and business owners in Alberta who have other assets and income — waiting is usually the right call. Here is why:

• CPP is inflation-indexed. Unlike most investment income, CPP increases with the Consumer Price Index every year. A larger CPP benefit compounds that advantage over time.
• It is longevity insurance. The older you get, the more you need guaranteed income. CPP is one of the few income sources that cannot run out. A higher CPP at 70 provides much stronger protection against outliving your money.
• Tax efficiency. If you retire with RRSP/RRIF income and delay CPP, you can strategically draw down your RRSP in lower-tax years before CPP and OAS kick in. This RRSP meltdown strategy can save significant tax over a lifetime.
• Survivor benefits. A larger CPP benefit means a larger survivor benefit for your spouse if you die first.

What About CPP and OAS Together?

OAS starts at 65 (or can be deferred to 70 for a 36% increase). The two decisions are independent but related.

If you are delaying CPP to 70, you need five years of bridge income between 65 and 70. Common sources: RRSP/RRIF drawdowns, TFSA withdrawals, non-registered investment income, or a pension. A financial planner can model which combination is most tax-efficient for your situation.

The Alberta Angle

Alberta has no provincial pension plan — you are entirely reliant on CPP and OAS for government retirement income. That makes maximizing CPP more important here than in provinces with supplemental plans.

Alberta also tends to have higher-income earners in trades, engineering, and energy. If your RRSP is large, strategic CPP timing can meaningfully reduce your lifetime tax bill through proper sequencing of income sources.

The Bottom Line

There is no universal right answer. But here is a useful starting framework:

• Health is poor or family history is short: Consider age 60.
• You have no other retirement income bridge: Consider age 65.
• You are healthy, have other assets, and want maximum guaranteed income: Seriously consider age 70.
• You are still working at 65: Almost certainly wait.

CPP timing is one of the highest-value decisions you will make in retirement planning. It is worth sitting down with a fee-only planner to model your specific numbers — not guessing based on what your neighbour did.