My husband and I both opted to take CPP early, at 60. Yes, we knew full well that we'd be hit with the 36% cut in our benefits. We accepted that "risk" because we assumed that we'd appreciate being retired earlier and make the most of those years. We did the math and our "break-even" age turned out to be 82. Of our 4 parents, only one lived longer than 82. So far, we're good with our decision. I appreciate you coming online and admitting that your advice may not have been optimum for all of us. Cheers from New Brunswick!!
One thing that's not getting mentioned is the falling standard of our medical services. My older sister is in NL, had an incident in late spring, short of breath, back pain. Called specialist this week, appointment is still a year out. As baby boomers age, only going to get worse.
I can be a case study for this. I retired this year at 62. My partner was to retire later, she had a job she liked only 6 hr days and good benefits. Showing no health issues she passed away suddenly. So the best laid plans, a fairly young age to retire still turned out to be the wrong one. Do some stuff on your bucket list young. Have a will and an executor and your preferred beneficiaries named. Have your partner’s passwords handy…. Trust me I’m learning this all the hard way right now.
Except you could have allowed the govt to “save” OAS and CPP and boost your savings by way more than you earned on the money in all likelihood (plus inflation adjustment) but glad it worked out for ya.
CPP is insurance against longevity, so a bit more in monthly payments due to deferrals is a benefit. And as you age and stupify, a bit more money coming in and less money to manage (because you spent it earlier) is likely a good thing.
Yes! 👍😃 This is the second retirement financial advisor video I've watched the past 2 weeks that says they've changed their advice away from the industry dogma of waiting til 70 to take CPP. Hallelujah! I know too many friends who's retirement was affected by a spouse getting cancer or surviving (or not) a heart attack or some other life changing event in their early 70s. Travel plans abandoned, big new RV unused. My mother in law is 88 and spent the last 5 years bedside with her infirm husband. Has a pile of cash, both of them didn't take their CPP until 70. To what end? I'm 63, 64 in January, retiring soon and I'm applying for my CPP tomorrow. And ... That's the advice my financial advisor gave me 3 years ago. Take CPP at 65 or when you retire and make sure you retire before you're 65! 👍😃🍁 Thanks for the great video!
I had been wondering when to start my CPP. I’m soon to turn 65. After reading the obits in my local paper the other day, I jumped on my Service Canada account online and applied. Hardly an actuarial study, but of the 4 men that had passed, only one made it into their 80’s. The biggest difference between taking CPP early or late is for the people that die young. The only thing worse than dying young is dying young with money in the bank.
I retired at age 53, so I am in my early 60s. Many of them resisted me because they couldn't understand the idea of not working if it wasn't necessary. I considered the phases of my life. I worked very hard to achieve what I have now, but in my last years, I owe it to myself to "stop and smell the roses." In my instance, I departed the nation after retiring and currently reside in Latin America. It made it possible for me to appreciate my new surroundings while escaping all the bad things that were going on in America. Nobody that I know of regrets retiring has yet to come to me.
Canadian males have an 80% chance of making it to the breakeven age of 82 if they take CPP at 70. This assumes you are already 65. Those are good odds.
This is a great video. Taking into account the Healthy Life Expectancy was an eye opener. Thanks for taking the time to offer an informed argument for collecting early.
I started my CPP at age 60...I had bypass surgery at 50 years of age even though I was a fitness fanatic my whole life...family genetics overruled my fitness and health regime. If I waited until 70 I might not have collected any CPP.
Not many people are listening to an advisor anyway. "about one-third of Canadians start taking their CPP benefits when they turn 60, the earliest age possible. Jan 23, 2024"
Wow I have now 2 advisers and myself that understand health risk for CPP and OAS . I have been talking about this for many years life is not just math. The most important think is to live your life each day and balance that with financial common sense.
Thirteen years ago I retired at 59 and took my CPP at 60 without consulting with anyone. I did my own calculations and decided to take my CPP at 60 even though I didn’t need that money at the time. Ten years of CPP money, ages 60 to 70, is more than a couple of hundred dollars per month starting at 70. I have been using my CPP money to pay for my funeral expenses. I am now in my 70s, enjoying good health with no regrets about taking my CPP earlier than later. The longer you wait to collect your CPP the less you will benefit from it. Also, the earlier you retire the longer you will live.
Is your argument that one needs to protect other income at the expense of base income? IMO, CPP, OAS, and DBPP are base income sources that are augmented by other income sources. That is, when other income sources go away, one is left with the base. Can one's cash flow withstand a 50% hit (e.g. 2008 event) to the other income sources in a year following age 70 with a reduced base? The future is unknown, and finding a good balance is tricky.
Having just handled our uncles estate, I’m more convinced than ever that we should spend what we can WHEN we can. The government took half of what he had left in his RRIF which amounted to over $200,000. His two siblings each got about $100,000 of what was left. It made me sick to think that he was a frugal man who likely thought he should be careful and cautious all those years just to have the government take what he worked so hard for.
This is the whole point of delaying CPP: you spend down tax deferred accounts like RRIFs so that you don’t leave a pile of $$ in the government’s hands. 99% of the population will never beat the returns - guaranteed returns - on CPP and OAS deferral, but we want what we want right away. If you’ve made it to 65, you’ll make it well past that in all likelihood. And anyway you can start CPP/OAS anytime, so I don’t get the rush. Unless you are broke, or have lousy family health history. Or you have spotty employment etc.
55 years old - wife's 50 - want to retire at 60 - have a DBPP - need CPP to bridge the gap between 60 & 65 as my wife won't catch up to me for almost 5 1/2 years - after that the money gets better every 5 years with her early CPP followed by OAS.
We all know that for taking it at 65 there is no penalty, and taking it after 65 there is a bonus. In my case, I retired at 62, and using my RRIFs to bridge. I am thinking to stretch it to 66, or 67 max. It would have been nice to show what is the break even for these ages too (I assume, without plugging in the numbers, that it will push a few more years the break even point, 86-ish).
There are a number of calculators that can do the breakeven point. One thing to note is that CPP is dependent on a factor called YMPE, the annual maximum pensionable income, which usually rises faster than inflation. What happens is that the breakeven is a bit sooner because of higher income inflation. From what I get from your age, breakeven is 79 ish years, likely 78 ish years with wage inflation.
EXACTLY!!! Healthspan :) I'm 56 and this is the main reason most people I know have either retired or will do so by 60, in the hopes of having 15 years to truly enjoy life.
Often misunderstood is the difference between life expectancy at birth (about 80 years to 80 years old) and life expectancy at age 65 (22 years to 87 years old). It seems that you are aware of this, though the 70-year-old number seems to be from birth?
I have being saying for ever,forget the BS,just take when ever u want,you might live to 70 or 90,who cares take and spend it when u want,i took at 62,my wife at 61 .We realized one day,what the heck are we waiting for.I told my wife i could walk out the door and have the old lady next door,who should not be driving run me over for real,(it almost happened a while back,seriously) or i could live to a 100-(not likely)LOL
There’s another Canadian financial planner who is adamant about waiting till 70 to take CPP. Then he goes on to talk about the go-go, slo-go and no-goes phases of retirement. Seems kind of contradictory.
Yeah, you're talking about Adam out of Langley, BC. His is based on taxes and RRSP meltdown if you have $1 million dollars. So it depends on your individual situation. Adam don't say you shouldn't take it early if your need the money or have health issues. I just watched a video of Joe 5 minutes before this one from a year ago. He also said take it as late as possible. He's reconsidered that in this video.
In my opinion and having seen it first hand,take CPP/OAS as soon as you are eligible. Once you die it is gone. Start early and invest and leave something to your kids. If i need the funds at 60,they will be there and if not it will be invested and make up the so called penalty amount.The only reason i believe to delay is if you have clawback and wouldn't receive anyways.
Put some numbers to it: Average CPP payment at age 60 is $6,400/year pre-tax. Say $5K/year after-tax. Average CPP payment at Age 65 is less than $10K/year…Pre-tax! Say $8K/year after tax. Average CPP payment at age 70 is $13K/year pre-tax. Say $10K/year after tax. So we’re talking $5K vs $8K vs $10K after-tax per year. Me thinks we might be over thinking this one a little too much. 😉
Finally, someone who understands time utility of your finances. We have money to improve our quality of our life, maximize your utility means retiring as early as you can. It helps if you have a base pension in combination with CPP/OAS. This is basic economics.
Not a chance I'd wait until I'm 70, that's what the govt would prefer!! I am 💯 a strong believer in taking the money as early as you can and investing it, if the govt is going to give you $$ take it !!
Why are you using the life expectancy at birth when you're speaking about people retiring at 65? You should then be using the life expectancy at 65. It looks like you choose whatever numbers made your opinion sound better; not what I'd expect for someone giving advice.
Take your pensions as soon as you can get them. Inflation is going to explode over the next 2 years....Gold is showing us that! Take your pension money and buy physical precious metals and other physical assets...If you wait to take your pension, you may not even get it......There are no guarantees....Broke desperate governments will come after your wealth hard....
Finally someone with some common sense. I've been saying this for years. We are not all going to live to 90 let alone 100. I'll take my cash when I turn 60 in a few years while I am still working.
I'm 63, retired, and I've had my money in S&P 500 funds (100% stock) since I started investing. I have made a great deal of money with my FA Kathie and I see no reason to change. The S&P 500 has made an average of 9.8% returns over the past 100 years. International and Bond funds are losers in my opinion because they don't make much money. This is just my amateur opinion which may not work for everyone.
My husband and I both opted to take CPP early, at 60. Yes, we knew full well that we'd be hit with the 36% cut in our benefits. We accepted that "risk" because we assumed that we'd appreciate being retired earlier and make the most of those years. We did the math and our "break-even" age turned out to be 82. Of our 4 parents, only one lived longer than 82.
So far, we're good with our decision. I appreciate you coming online and admitting that
your advice may not have been optimum for all of us. Cheers from New Brunswick!!
One thing that's not getting mentioned is the falling standard of our medical services. My older sister is in NL, had an incident in late spring, short of breath, back pain. Called specialist this week, appointment is still a year out. As baby boomers age, only going to get worse.
I plan to take it next year at 60. A bird in the hand.
I can be a case study for this. I retired this year at 62. My partner was to retire later, she had a job she liked only 6 hr days and good benefits. Showing no health issues she passed away suddenly. So the best laid plans, a fairly young age to retire still turned out to be the wrong one. Do some stuff on your bucket list young. Have a will and an executor and your preferred beneficiaries named. Have your partner’s passwords handy…. Trust me I’m learning this all the hard way right now.
I took my CPP and OAS at 65 and as I worked till 70 I saved it all until I actually retired! It worked very well for me to boost my savings!
Except you could have allowed the govt to “save” OAS and CPP and boost your savings by way more than you earned on the money in all likelihood (plus inflation adjustment) but glad it worked out for ya.
CPP is insurance against longevity, so a bit more in monthly payments due to deferrals is a benefit. And as you age and stupify, a bit more money coming in and less money to manage (because you spent it earlier) is likely a good thing.
Yes! 👍😃 This is the second retirement financial advisor video I've watched the past 2 weeks that says they've changed their advice away from the industry dogma of waiting til 70 to take CPP. Hallelujah! I know too many friends who's retirement was affected by a spouse getting cancer or surviving (or not) a heart attack or some other life changing event in their early 70s. Travel plans abandoned, big new RV unused. My mother in law is 88 and spent the last 5 years bedside with her infirm husband. Has a pile of cash, both of them didn't take their CPP until 70. To what end? I'm 63, 64 in January, retiring soon and I'm applying for my CPP tomorrow. And ... That's the advice my financial advisor gave me 3 years ago. Take CPP at 65 or when you retire and make sure you retire before you're 65! 👍😃🍁 Thanks for the great video!
I had been wondering when to start my CPP. I’m soon to turn 65. After reading the obits in my local paper the other day, I jumped on my Service Canada account online and applied. Hardly an actuarial study, but of the 4 men that had passed, only one made it into their 80’s. The biggest difference between taking CPP early or late is for the people that die young. The only thing worse than dying young is dying young with money in the bank.
I retired at age 53, so I am in my early 60s. Many of them resisted me because they couldn't understand the idea of not working if it wasn't necessary. I considered the phases of my life. I worked very hard to achieve what I have now, but in my last years, I owe it to myself to "stop and smell the roses." In my instance, I departed the nation after retiring and currently reside in Latin America. It made it possible for me to appreciate my new surroundings while escaping all the bad things that were going on in America. Nobody that I know of regrets retiring has yet to come to me.
Canadian males have an 80% chance of making it to the breakeven age of 82 if they take CPP at 70. This assumes you are already 65. Those are good odds.
This is a great video. Taking into account the Healthy Life Expectancy was an eye opener. Thanks for taking the time to offer an informed argument for collecting early.
I started my CPP at age 60...I had bypass surgery at 50 years of age even though I was a fitness fanatic my whole life...family genetics overruled my fitness and health regime. If I waited until 70 I might not have collected any CPP.
Finally, an advisor related the reality of advantage of taking cpp at 60 or 65 .
Not many people are listening to an advisor anyway. "about one-third of Canadians start taking their CPP benefits when they turn 60, the earliest age possible. Jan 23, 2024"
When was the last time you made up a retirement plan for an infant?
Take the money 💰 and run.
Wow I have now 2 advisers and myself that understand health risk for CPP and OAS . I have been talking about this for many years life is not just math. The most important think is to live your life each day and balance that with financial common sense.
Thirteen years ago I retired at 59 and took my CPP at 60 without consulting with anyone.
I did my own calculations and decided to take my CPP at 60 even though I didn’t need that money at the time. Ten years of CPP money, ages 60 to 70, is more than a couple of hundred dollars per month starting at 70. I have been using my CPP money to pay for my funeral expenses. I am now in my 70s, enjoying good health with no regrets about taking my CPP earlier than later.
The longer you wait to collect your CPP the less you will benefit from it.
Also, the earlier you retire the longer you will live.
Wrong on both counts, but hey, we all seem to be experts these days.
@@Imsosmrt1999 And you are the expert of experts🃏
Is your argument that one needs to protect other income at the expense of base income? IMO, CPP, OAS, and DBPP are base income sources that are augmented by other income sources. That is, when other income sources go away, one is left with the base. Can one's cash flow withstand a 50% hit (e.g. 2008 event) to the other income sources in a year following age 70 with a reduced base? The future is unknown, and finding a good balance is tricky.
Having just handled our uncles estate, I’m more convinced than ever that we should spend what we can WHEN we can. The government took half of what he had left in his RRIF which amounted to over $200,000. His two siblings each got about $100,000 of what was left. It made me sick to think that he was a frugal man who likely thought he should be careful and cautious all those years just to have the government take what he worked so hard for.
This is the whole point of delaying CPP: you spend down tax deferred accounts like RRIFs so that you don’t leave a pile of $$ in the government’s hands. 99% of the population will never beat the returns - guaranteed returns - on CPP and OAS deferral, but we want what we want right away. If you’ve made it to 65, you’ll make it well past that in all likelihood. And anyway you can start CPP/OAS anytime, so I don’t get the rush. Unless you are broke, or have lousy family health history. Or you have spotty employment etc.
55 years old - wife's 50 - want to retire at 60 - have a DBPP - need CPP to bridge the gap between 60 & 65 as my wife won't catch up to me for almost 5 1/2 years - after that the money gets better every 5 years with her early CPP followed by OAS.
Check if you have at least 35 years at YMPE. That would get you max CPP (still with the 36% cut though ) possible at 60.
If i knew I was going to live to 100 I may wait, I will take it early and enjoy the last of my good years.
We all know that for taking it at 65 there is no penalty, and taking it after 65 there is a bonus. In my case, I retired at 62, and using my RRIFs to bridge. I am thinking to stretch it to 66, or 67 max. It would have been nice to show what is the break even for these ages too (I assume, without plugging in the numbers, that it will push a few more years the break even point, 86-ish).
There are a number of calculators that can do the breakeven point. One thing to note is that CPP is dependent on a factor called YMPE, the annual maximum pensionable income, which usually rises faster than inflation. What happens is that the breakeven is a bit sooner because of higher income inflation. From what I get from your age, breakeven is 79 ish years, likely 78 ish years with wage inflation.
I love that you pointed out the distinction between the healthy years and the more challenging ones; absolutely a factor for sure. Great video Joe!
Another great video!
thanks!
This is the best of the best ever ❕; Booyah 🏆✨💫
EXACTLY!!! Healthspan :) I'm 56 and this is the main reason most people I know have either retired or will do so by 60, in the hopes of having 15 years to truly enjoy life.
Often misunderstood is the difference between life expectancy at birth (about 80 years to 80 years old) and life expectancy at age 65 (22 years to 87 years old). It seems that you are aware of this, though the 70-year-old number seems to be from birth?
minor point, Canadian channel use Canadian money in your videos SVP
I have being saying for ever,forget the BS,just take when ever u want,you might live to 70 or 90,who cares take and spend it when u want,i took at 62,my wife at 61 .We realized one day,what the heck are we waiting for.I told my wife i could walk out the door and have the old lady next door,who should not be driving run me over for real,(it almost happened a while back,seriously) or i could live to a 100-(not likely)LOL
There’s another Canadian financial planner who is adamant about waiting till 70 to take CPP. Then he goes on to talk about the go-go, slo-go and no-goes phases of retirement. Seems kind of contradictory.
Yeah, you're talking about Adam out of Langley, BC. His is based on taxes and RRSP meltdown if you have $1 million dollars. So it depends on your individual situation. Adam don't say you shouldn't take it early if your need the money or have health issues. I just watched a video of Joe 5 minutes before this one from a year ago. He also said take it as late as possible. He's reconsidered that in this video.
In my opinion and having seen it first hand,take CPP/OAS as soon as you are eligible. Once you die it is gone. Start early and invest and leave something to your kids. If i need the funds at 60,they will be there and if not it will be invested and make up the so called penalty amount.The only reason i believe to delay is if you have clawback and wouldn't receive anyways.
The future is unknowable, thus, take the bird in hand when you can !!!
Put some numbers to it: Average CPP payment at age 60 is $6,400/year pre-tax. Say $5K/year after-tax. Average CPP payment at Age 65 is less than $10K/year…Pre-tax! Say $8K/year after tax.
Average CPP payment at age 70 is $13K/year pre-tax.
Say $10K/year after tax.
So we’re talking $5K vs $8K vs $10K after-tax per year.
Me thinks we might be over thinking this one a little too much. 😉
Finally, someone who understands time utility of your finances. We have money to improve our quality of our life, maximize your utility means retiring as early as you can. It helps if you have a base pension in combination with CPP/OAS. This is basic economics.
Not a chance I'd wait until I'm 70, that's what the govt would prefer!! I am 💯 a strong believer in taking the money as early as you can and investing it, if the govt is going to give you $$ take it !!
The government hopes that you wait until 70 and that you don't make it to that age.....
Why are you using the life expectancy at birth when you're speaking about people retiring at 65? You should then be using the life expectancy at 65. It looks like you choose whatever numbers made your opinion sound better; not what I'd expect for someone giving advice.
Take your pensions as soon as you can get them. Inflation is going to explode over the next 2 years....Gold is showing us that! Take your pension money and buy physical precious metals and other physical assets...If you wait to take your pension, you may not even get it......There are no guarantees....Broke desperate governments will come after your wealth hard....
I started at 60. Its indexed to inflation and i can ENJOY the money now.
i agree 💯
Finally someone with some common sense. I've been saying this for years. We are not all going to live to 90 let alone 100. I'll take my cash when I turn 60 in a few years while I am still working.
You get more cash that holds less value
I'm 63, retired, and I've had my money in S&P 500 funds (100% stock) since I started investing. I have made a great deal of money with my FA Kathie and I see no reason to change. The S&P 500 has made an average of 9.8% returns over the past 100 years. International and Bond funds are losers in my opinion because they don't make much money. This is just my amateur opinion which may not work for everyone.