The Canada Pension Plan can be started any time from age 60 to age 70. Starting before 65 reduces the monthly amount by 0.6% per month (7.2% per year, up to 36% reduction at age 60). Starting after 65 increases the monthly amount by 0.7% per month (8.4% per year, up to 42% increase at age 70). The breakeven age between starting at 60 versus 65 is approximately 73 to 74; between 65 and 70 it is approximately 81 to 82. The right age depends on health, other income sources, and tolerance for early-vs-late tradeoffs.
The reduction and bonus rules
| Start age | Adjustment factor | Maximum 2026 monthly CPP at start |
|---|---|---|
| 60 | 0.640 (-36%) | $964.90 |
| 61 | 0.712 (-28.8%) | $1,073.45 |
| 62 | 0.784 (-21.6%) | $1,182.00 |
| 63 | 0.856 (-14.4%) | $1,290.55 |
| 64 | 0.928 (-7.2%) | $1,399.10 |
| 65 | 1.000 (no adjustment) | $1,507.65 |
| 66 | 1.084 (+8.4%) | $1,634.30 |
| 67 | 1.168 (+16.8%) | $1,760.94 |
| 68 | 1.252 (+25.2%) | $1,887.58 |
| 69 | 1.336 (+33.6%) | $2,014.22 |
| 70 | 1.420 (+42%) | $2,140.86 |
Adjustments are calculated monthly and locked in at the start date. Once CPP starts, the rate adjustment for early or late start is permanent. The benefit is indexed to inflation each year.
Breakeven analysis
Breakeven age is when total cumulative payments from one start date equals total from another. Below the breakeven age, the earlier start has paid more cumulatively. Above it, the later start has paid more.
| Comparison | Breakeven age | Starting age dominates if living past… |
|---|---|---|
| Start at 60 vs 65 | ~73 to 74 | Start at 65 wins for life past ~73 |
| Start at 65 vs 70 | ~81 to 82 | Start at 70 wins for life past ~81 |
| Start at 60 vs 70 | ~78 | Start at 70 wins for life past ~78 |
Median life expectancy for a Canadian 65-year-old: approximately 87 for men, 89 for women. Most 65-year-olds will benefit from delaying CPP, mathematically. Starting CPP late captures both higher monthly income and indexation on a higher base.
Reasons to start CPP early (age 60-64)
- Reduced life expectancy (terminal illness, family history of early death).
- Immediate income need (no other retirement income, can’t fund years 60-65 from savings).
- Working part-time and want supplemental income now.
- Concerns about future CPP program changes (politically motivated, generally unfounded).
Reasons to delay CPP (age 66-70)
- Long life expectancy (good health, family history of longevity).
- Other income to bridge the gap (RRSP/RRIF withdrawals, employment income, severance, defined benefit pension).
- Want larger guaranteed indexed lifetime income (inflation-protected longevity insurance).
- Tax efficiency: high-income years 65-69 can be CPP-free, allowing RRIF drawdown at lower marginal rates.
Working while collecting CPP
A CPP recipient under 65 who is working must still contribute to CPP, building “post-retirement benefit” (PRB) increases that get added to monthly CPP. After age 65, contributions are voluntary; opting out reduces immediate CPP deductions but stops PRB accumulation.
The PRB is small (less than 0.10% of contributory earnings per year of contribution) but it does compound over multiple working years. A 62-year-old working full time and collecting CPP early adds modest PRB increments to their CPP through age 65.
Combined CPP timing strategy
For a couple, delaying both partners’ CPP to 70 maximizes total household CPP for those who live to median ages. For couples with significant age difference, the older partner sometimes takes CPP earlier (age 65) while the younger delays to 70. The decision interacts with OAS timing (also deferrable to 70 for a 36% bonus) and RRIF conversion strategy.
How to apply
CPP retirement pension is not automatic. The application is filed through Service Canada (My Service Canada Account online, or by mail with Form ISP-1000). Apply six months before the desired start date. Service Canada cannot start CPP earlier than the application is processed; late applications miss months of payments retroactively limited to 12 months.
Frequently asked questions
- What is the CPP early reduction rate?
- 0.6% per month before age 65, up to a 36% reduction at age 60. The reduction is permanent once CPP starts.
- What is the CPP delay bonus?
- 0.7% per month after age 65, up to a 42% bonus at age 70. The bonus is permanent and applies to the indexed monthly CPP.
- What is the breakeven age for starting CPP at 60 vs 65?
- Approximately age 73 to 74. Past that age, starting at 65 produces more total lifetime payments.
- What is the breakeven age for starting CPP at 65 vs 70?
- Approximately age 81 to 82. Most healthy Canadians outlive this threshold based on median life expectancy of 87 for men and 89 for women at age 65.
- Should I take CPP early if I'm still working?
- Working while collecting CPP under 65 still requires contributions, which add small post-retirement benefits. The early-start reduction usually outweighs the benefit unless income is needed.
- Can I delay CPP past 70?
- No. The maximum delay age is 70. There is no further bonus for waiting past 70, so always start by age 70 at the latest.
- How do I apply for CPP?
- Through Service Canada via My Service Canada Account or Form ISP-1000. Apply six months before the desired start date. Retroactive payments are limited to 12 months.