Both my husband and I began our CPP at 60, and we were both still working full time. We placed the monthly amounts into our TFSA accounts without using the payments. Our decision was based on loosing a close friend quickly to cancer and he had not retired nor received his OAS or CPP, he signed his work pension however, passed before he received his first payment. Life is short and we both wanted even if not full amount, what we could get just in case we did not live out the time to reach the full payments amounts.
There are other advantages taking it early that many do not mention and that is should you need the money for whatever, you have it and don't be surprised if the gov changes the rules and extends the retirement date or something along those lines. A decision like that would not affect you.
I did the same . I collect CPP at 60 . I save in a TSFA . You can you use the amount to supplement and or purchase a new or used vehicle in the future . It’s a win 🥇 win situation .
I've lost friends every decade of my life. I take nothing for granted. I turn sixty this year and don't necessarily need it now but i will be taking it. The best years of your life are usually the ones right in front of you. You may not enjoy it as much at 70 depending on how your life pans out. Jmo.
Always interesting to hear your take on things. I think the first rule is: If you need it at 60, take it at 60. I'm all for compromise between 60 & 70...I took it at 65. Best of both worlds to my thinking.
I took CPP at 60 with no regrets. 60 to 65 are your best travel years so the money is more valuable than at 80 if you are trying to enjoy retirement. One factor some forget is once you draw CPP there is a cost of living increase each year so you will get 5 increases before 65. So compare the 65 pension number to the 60 pension number plus 5 cost of living increases. It worked for me, having the money when young enough to enjoy it is a consideration.
my two brother both dies at 61 & 62 and never took their CPP like I told them. I took mine at 60 and am now 70 and spending every nickel they give me to help the economy. lol
I retired at 59 took cpp early and w/d RSP to top up Income. I was concerned that the 5 years of not working would effect the non working years. I have a very meager budget and will be better off once OAS kicks in at 65 and I plan to get GIS too. I expect to live until 80/85. My home will pay for my retirement home if it comes to that, but hope to age in place. Basically I'm house poor, but glad I have a roof over my head.
Great words of advice ....however "a smaller balloon is better than no balloon" ... Nobody knows how many days we have left here in this journey… as Steve Miller said.." Take the money and run!!"""
Listen to how he's telling you why you should take it at 60, but at the same time trying to deter you from taking it based on the money you could have. I plan to take mine at 60 and live somewhere with a lower cost of living. The world's a big place and there are many places you can live where that little bit of money can make a big difference, you're not stuck where you are unless you want to be stuck.
I'm and thinking the same in two years . Could you tell me the total what a guy collects per month ? I've worked since 14 so I've paid enough 😂 Thanks !
@@gp7910you actually haven't. It doesn't matter how long you have worked leading up to pension eligibility. For every year after you become eligible though, the monthly amount goes up.
If you start collecting it too soon, you're not doing yourself a favour. You'll get more if you wait longer. Relying on pension is a very different lifestyle than working is. You can't rely solely on a pension to cover your basic expenses.
I retired at 44 and started collecting at 60, I’m 61. I’d rather have it now and use than waiting until I’m too old to travel or do things I enjoy. I won’t need the same amount of money in 10-15 years. If I’m still around.
Really? You won’t need it because you have enough money now to carry you through the ever increasing inflation? You figure to curl up and die at 71-76 yrs?
Adam! Goodness! Reading the comments indeed there are die hard opinions. (pun there :)]. It was so important that you produce a video like this. You are listening to your audience and their concerns. Thank you. Clarifying your position that you are educating Canadians and the like to the financial landscape of taking cpp early, middle or later. It is up to the individual, you are not there to take away their decision, you are there to support with awareness. Your hard work is noted. Closing in on 100.000 subscribers. Well deserved! As with CPP and waiting, Subscriber 100K is worth the wait! 👍💯 Chiming in, Atlantic Canada always a fan and supporter.
I gambled and threw the dice on taking my CPP at age sixty-five because my pension will be reduced by almost 60%. The phone company's pension plan isn't the what it's built up to be. That said, because of the huge reduction, I need to maximize my CPP payment along with my OAS to bring me almost back to where I am currently. My wife on the hand took hers at sixty. Thanks for sharing.
Break even point is at 77 yrs of age when taking it at 60 vs 65. Just remember whenever you take it, it is that amount for the rest of your life plus mediocre COLA increases. I will enjoy the 7.2% guaranteed increase from 60 while continuing to work at a job I enjoy and then maybe a few years past 65 with over 8% guaranteed increases. For every year past 65 I wait, my combined pensions (CPP, OAS, company) increase $300 a month. Many, different opinions on this topic, but if healthy, enjoying working and earning a decent wage, no panic to collect early.
Retired at 54. Im taking mine at 63. $1000/ month. My non contribution years kick in ( worked part-time after 54). Not doing an RRSP meltdown either because i have DB pension with a bridge until 65. Meltdown would increase my income to close to what I was making when i was working and all that would do is hit me hard in taxes..and just give my retirement savings to the government. It would also kick me into significant OAS clawback. I could wait to collect CPP, but why? More income means more taxes. No mortgage, no car payments, zero debt. Debt is the killer in retirement.
How will you get your money out of your RRSP before you die if you aren't going to melt it down? You'll probably lose 50% of it when you die. I would think taking the money out of the RRSP first and then taking CPP later would cost less in tax while getting the same amount of money. He has a bunch of videos on it that make sense of how to do it.
Simple strategy… 55 now. Working part time. My indexed DP pension puts me in the 28.2 bracket. I will meltdown RRSP from 60-68 years old to the 28.2 limit. Once RRSP’s run out take my CPP. I will take OAS at 65
I am in similar situation retired age 55 with DB and $200/mth bridge to 65 (my spouse retired same year age 65 with DB,CPP $900, OAS and both have $200k-300k RRSP each). I've been melting down my RRSP/RRIF big way age 56 to 59. Now age 60, I start taking my CPP $830 (36% decducted) and continue melting down RRSP/RRIF with adjustable amount (until age 70) trying to maintain most appropriate (avoid OAS claw back, tax bracket...) flat line of income each year for best tax benefits, until end of life. However when time come we still get higher tax hit with survivor benefits (DB and CPP)... My RRSP withdrawa give to my children for maxing their TFSAl (it'll be their inherent anyway, why not give them now😊). That is why I take my CPP age 60. It is better tax benefits. I understand each family has their own situation and own thoughts to decisions, but for us, rather give my children the money than let the tax man and government agents keeping our money!
Retired at 57, DB with bridge to 65 in play, working part time now. No RRSP. 60 is coming up in a year, was thinking a good choice would be to draw at 60 and pay down debt (relatively small mortgage) a little early. But CPP on top of a bridge would mean more taxes for the 5 years. I think I might need a planner to crunch a few options.
As a retired military member my pension included a bridge portion to tie us retirees over until age 65 (CPP benifit and OAS). Once we start collecting CPP we loose our bridge pension portion.
I was in a car accident and suffered an injury that affects me daily. I had to retire from my job at 54 I need the money to live. My pension is ok but have you bought groceries lately?
I retired at 60 and did a quick calculation. How much money am I leaving in the pool for 5 years if I wait until I’m 65, and how long will it take me to earn back that money after 65. It was an easy decision that allowed me to retire from full-time employment at 60 and work part time as a freelancer doing what I love. Happiness also has a value. But I agree that one size doesn’t fit all, so I’m happy to hear another POV on the subject. If only I had a nickel for every time someone told me not to do this!
I did the same thing and it would take me to 83 to break even hahahahaha. I took it right away - chances of making it to 83 are not that great for anyone - and by the way. you wait get more and into a home you go and they take it all thank you very much for going without,,, hahahaha. none of these advice u tube bla bla ever think of that! they all say the same stuff, wait get more. hahah. the house always wins
I’m getting 843 per month. My investments make another 1500, I do odd jobs. Son pays rm and board. No payments , no loans. Live on 3000 per month. Get debt free. Hopefully own your own home , Enjoy semi retirement. Work when I feel like. Love it. Not waiting to 65!!
@@gp7910 Just log into your Service Canada account. It tells you what your CPP estimate will be at age 60, 65 and 70 based on the contributions you've made so far.
If I could just add, qualifying for GIS also plays a big part of this decision process for those who do not have a high income and may be better off taking CPP early.
@@ddavidson5 GIS amount sharply decreases with any income you show (equivalent to 50% tax). CPP is considered income, unlike OAS. The smaller CPP amount taken at 60 will increase your GIS.
@@ew6392 Indeed, and to a point, if you lower your income you'll increase your GIS. I suppose the question is are you trying to maximize your income or maximize what you get from GIS? If you increase your income by $2 but you lose $1 of GIS it seems to me you are still up $1.
@@ew6392Indeed. To a point if you lower your income you will increase the amount of GIS you receive but is your goal maximizing your income or maximizing your GIS? If you increase your income by $2 and lose $1 of GIS it seems to me you are still up by $1.
I started collecting CPP at 60 based on 2 reasons. My husband retired at 62. Less than a year later had a stroke and with more tests has brain tumour. 2nd reason I would have lost 5years of benefits even at reduced amount. I also retired at 61. That last year of working FT and collecting CPP all went to taxes.(big error there). Ten years retired now and I don’t regret my decision. I guess I’m fortunate because I also have a company pension that I opted to collect early at reduced amount. I get OAS because my overall income qualifies.
My bills come due monthly, therefore maximizing monthly income after retiring from work when I no longer have employment income is the priority. Taking CPP early (while still employed) is counter to that need as it will reduce the monthly income in my retirement years when there is no longer employment income.
The other side of that is if you pass away one or two years after taking it at 60 you at least get some of your hard earned money back. However if you didn’t start at 60 and let’s say passed away at 62/63 that money goes to no one 🤷🏼♀️ . If you have a high income, then yes it won’t benefit you to take it, however millions of people do need it, so take it. My mother always said you will find a way too survive. Will everyone of us be around at 65 🤷🏼♀️.. Tomorrow is promised to NO One! So enjoy today!
One interesting thing to mention. May be a bit off topic but my mom had a nest egg that she got from an inheritance. Some got used but there was always a fear to save it so you don’t run out. Eventually she went to a nursing home due to health issues but not until around 80 (she did to private retirement home after a stroke around 75). But now to my point, in an Ontario nursing home she paid much more for her room and services those someone with low income. And my moms income wasn’t high but just higher than the threshold for retirement home costs. Interesting experience to see. I’m glad it exists as those low income seniors should get care but if you are in that middle area, enjoy your money and life while you can.
Martel, sorry to hear about your friend and you are completely correct to take Cpp whenever you choose. Despite being a financial decision it's also a very emotional and personal reason as well. I am sure everyone has a reason why they took their Cpp at a differing time.
This is a great video and this is always a hot topic and a lot of people are unfortunately confused between taxes and cpp thinking the higher the income the more taxes they pay the more pension they will be entitled to not factoring the YMPE in additional to the impact on OAS clawback and GIS for low income seniors 65+ these things should be thought early on but as the saying goes if you thing the government will help you fix your life than you have 2 problems 😢. Good luck to you all know your numbers live within you means budget invest have Financials goals and discipline it will all work out at the end👍🏽
If you wait 5 years and take it out at 65 you are starting at zero. It isn’t like you can take the money out for those 5 years of waiting. I calculated for it to equal out you have to reach the age of 72 and then the extra money from waiting starts become more. But for the 12 years if you invested the money wisely you will be far ahead. If you invest it and get a 5 percent return the amount you will have will be double what starting at 65 is. An example is. $634 at 60 at 5 percent investment return equals $196,500 at the age of 72. (12 years of investing )$991 at 65 at 5 percent investment return is a total of $101,300 at the age of 72 (7 years of investing) of course you would have to invest it and in a TFSA. But even if you don’t invest it and spend it, the amounts received will be equal at 72. Of course your situation may be different from mine. If you are still working between 60-65 you will be taxed more. I retired early and my pension along with the cpp is lower income.
Yep.....with a modest ROI of 4.5% I figured the break even was 78 years old. Assuming both options (taking at 60 or 65) invested and didn't spend it. That makes a nice emergency fund by the time you even hit 65.
We both started collecting at 60, I worked till 62 and while collecting I bought silver each month and my husband turned his into cash we live on one income paid off debit and retired @ 62 & 65 with no regrets or worries. We are now in our 9th year and we are doing well except we would do better if this government'S (NDP) would get rid of the carbon tax that is effecting us big time now.
If you have no other pensions besides cpp and old age i believe you should not take cpp untill you retire at 65, you will need the max amount of cpp at your retirement.
I'm receiving CPPD. Looking into what happens at 65 and the information is confusing. It turns into CPP retirement pension, but I'm also seeing that Disability payment can continue after 65. Would be a great topic for another video
I was in CPPD also and just turned 65. The CPPD discontinues but you do get CPPA but it’s lowered. What I don’t get is that it says in their website you get $1394+ but I am not getting that. I’m getting way less.
Adam, - While the CPP grows while in "the pool", if I die my partner gets NOTHING!? - Isn't it better to own the money? "one bird in the hand is better than two promised'? - My current TFSA investment returns average 9-11%/yr. - How hard can it be to make 7%? (what CPP gives you). - My RRSP & TFSA are not maxed-out so putting my CPP into those means "I" own the money. No? - Say I do not need the money now (say 500$/mth) and leave it with CPP, two years later I have a big expense (medical, etc), CPP is not going to give me 12k$ to cover that. Even if my CPP by then would give me 14% more per year. I do not see the advantage. - I am going to be 63 this year. My partner 61. We have about 200K$ saved. - We are going to have to hit the trigger on these decisions shortly. - Do YOU personally work with and do financial planning for clients or just the six planners who works at Parallel do? Great video, great channel. (I follow with different accounts due to recent YT restrictions and policies). Thank you for your answers.
Given your circumstances, taking it earlier might be the best choice. Just to add a couple of things: 1) CPP grows by 7.2% from 60-65, then by 8.4% a year from 65-70. It also grows by wage inflation during this time, so 10 or 11% overall might be more realistic after age 65. After you take it, it grows by the federal government’s CPI instead of wage inflation. 2) Adam also does plans. He did mine. He is a Certified Financial Planner. You can check out his profile on the Canadian CFP professionals’ website.
I'm still working and I'm 64. My plan is to work until 68. I love my job and its a mere 4 minute drive from home. I'm only working till 68 because my wife is over 4 years younger and won't retire till 64. For me, no sense retiring to be home alone. My current decision is, do I start taking it at 65 or wait till I retire at 68. Between my wife and I we make excellent money. My company pension uses most of my RSP contribution. I contribute whats left in a personal rsp. I could take my CPP and OAS at 65 and put it in to TFSA. I would have no rsp space to shelter it and since there is no tax shelter benefits to a TFSA I'd likely be paying a lot of it out in income tax. I am working with a financial planner to get this sorted out.
I don't really have a choice. My workplace defined benefit pension plan allows for 30 and out and provides a top up to make up for CPP until the age of 65. I have to take it then as that is when that top up goes away. I will qualify at age 62 and retire then. My concern is around when to start drawing from my RRSP's and the tax implications of that income along with my pension income.
Enjoy your lunch money from the government at sixty because life is short after working like me for 40 years underground in the mine many friends never got to see a dime of it due to death
The CPP will be around BUT, inflation will be much higher so if you can take your CPP payment and invest in physical assets that are denominated in USD's....or at least have their value derived from USD's....So, take your CPP as soon as you can get it....and invest in those physical assets every month. Do not have the tax deducted, but instead, pay the tax the following year with inflation reduced money.....
If someone who turned 60 ten years ago took cpp at that time to reduce how much they withdrew from their rrsp, which was invested in an s&p500 etf, today they would be ahead by a substantial margin. I realize there’s more risk in doing it this way, but it’s not like buying an individual stock. You’re either betting on the Canadian government or the American economy. Either seems just as safe a bet to me but the American economy would have delivered you a far better outcome and over a ten+ year time horizon that’s unlikely to change.
I took mine at 60. It’s enough that I can work part time and enjoy more free time to do the things I love before I get too old. You can make more money but you can’t make more time.
Fortunately, my pension plan has a CPP bridge until I'm 65 and I retired at 54yo. I'll definitely start drawing my CPP at 65 because the marginal years aren't that far after that. Travel becomes very expensive for insurance after 70 and life becomes very simple if your house and debts are free and clear.
I was reading on the Service Canada website that if I take CPP at 60, and still working after that, I can still contribute to CPP and it will be added and adjusted as I go along.
If you defer CPP until 70 but you work b/t 65-70.....your income b/t 65-70 is greatly reduced to say 24K a year....Questions: 1.Does the smaller amounts you'll pay into CPP from 65-70 drag down the amount you'll get at 70? 2. Can you opt out of paying further into CPP past age 65? Would it make any difference?
It's interesting how few financial planners ever mention the effect of CPP on GIS, even though 1/3 of retirees collect GIS. I guess there is an assumption that only rich people watch these videos, or that only rich people are of benefit to financial planners.
Take the CPP asap. A dollar now is better than an inflated and higher taxed dollar later. That discount on the pension payout is because they know the dollars you get now are worth at least 30% more than the dollars you will get later. This is especially true if CPP isn't going to affect your income/lifestyle in any case. No matter what you do you have to recognize dollars paid into the CPP are likely the worst investment you will make.
As a type 2 diabetic with other health issues it never made any sense to me to delay CPP hoping I would live long enough to recoup the five years of non-payment.
I encourage you to look a little longer term than this. By taking it early statistically you are helping them more, as they will pay you less to life expectancy.
My initial plan was to take it later and burn down my own savings until I’m 70. My financial advisor point me another reason for a middle way. He advice to keep some money in case you need a fix amount. A bigger amount every month is nice, but doesn’t help when you need a 10k-20k more.
My mother was looking forward to retiring at age 65 and doing all the things that she wasn't able to do during her working years raising 4 kids on her own. BOOM...she turned 65 and was diagnosed with a terminal illness. Life is short and planning for the future is precarious.
I went to an Omer’s seminar and the speaker said to take it at 60. You take a hit initially but you gain some back every year through indexing and if you work you pay into a secondary cpp so you actually will get more because you can invest your earnings for 5years
Yes CPP payments are indexed, but so is the benefit calc itself (more or less) up to the point where you start to draw, because it's based on the previous 5 year avg of YMPE. YMPE keeps going up too (but it's not hard-linked to CPI afaik)
Great info and advise. Here is a retirement plan question no one seems to be able to answer. If I retire at 60 and stop paying into CPP but don't start withdrawing till 65, will the monthly payment continue to grow for those 5 years. Lets say my 60 year CPP would be $870 and the forecast for 65 was $1350? How is the value arrived based on waiting the 5 years and stopping contributions. The CPP board can't seem to tell me. It's vital info for a retirement plan. We have funds to supplement but not if it costs too much at 65. thanks
It will depend how many non-contributory years you have prior to age 60. If not many, then these 5 years could be unaffected. You essentially get 7 years of non-contributory years to CPP. So if you have 7 (or more than 2) prior to age 60, then your $1350 will be reduced slightly. But your annual amount from waiting increases as you are penalized for taking prior to age 65. I have never seen a situation where taking it earlier gives you more...hope that helps.
Thanks for this information! May I ask… if you go on CPP Disability before age 60 do you automatically start getting regular CPP at 60? Do you have the option to wait until 65?
Forced to retire at 35. Rev Can representative was surprised to see I had already contributed twice average cpp payments for life time. Half million in 25 years as blue collar worker. Worked at as many as three jobs at at time. I qualified for top pension . But I've met lots people with less skills almost no work record and they all make more than me. I've never met someone who made less .
EXACTLY.. Take your Quebec pension @60.. too many hold out longer bc they will get more at a higher age.. Ya ok.. What if you don't make it ey !🙄 Just take the damn thing as early as possible 😜👍🏻 and enjoy
@Parallelwealth Adam, thank you for your videos they are always well organized and well explained. I also took your advice from another video and read Frederick Vittese's "Retirement Income for Life" over the summer, as I'm thinking of retiring in the next 1 to 2 years. I have to be honest I'm still very confused about CPP. Specific to this video, you mentioned one of the reasons why you would take it out might be to invest it yourself from age 60 to 65 (or 70) and a reason you gave to perhaps reconsider is that you aren't likely to match the 7.2% interest you are gaining by leaving it in. However, to me you aren't really gaining anything as you aren't actually getting that money, but rather a higher percentage but starting much later down the road. I'm wondering what the break even point is on a typical person who has stopped working (and thus stopped paying in as well) taking it at 60 at a lower percentage, versus starting later at a higher percentage. Again, like I said it's all kind of confusing and it would be amazing if there were a convenient tool for Canadians to put in some "what if" scenarios to run the actual numbers with all the myriad other rules laid down by the CPP. To quote Vettese in his book, "fewer than a dozen people in Canada" can fully explain all the rules to CPP...and that's just not copacetic in my opinion. It's a fairly big decision that shouldn't be this nebulous.
So as near as I can figure, the break even point between taking CPP at 60 or 65 would be at age 72 ish. Beyond 72 you will earn more if you took CPP at 65 because once you take the reduction at 60, you never get it back
4:35 Adam you mention the case of someone already hitting 39 maxes by 60. Afaik, you only need 35 maxes to be "full" by age 60, since the dropout provision is based on the years from 18 until you start cpp ?
I remember in an older video there was mention of your company/team developing a CPP calculator. Did that happen/will happen/get abandoned? I ask because it would be great to be able to calculate CPP based on retiring at 60, so 5 years of not contributing plus potentially other years on lower or no contributions, to see the true numbers at 60 - 70
@@ParallelWealth Didn't you say qpp has one that calculates more effectively. Has ability to drop disability and child rearing years, if you stop working/stop contributing to cpp, etc Couldn't you leverage that one for the scripts, etc???
I'm 60...no plans to take it any time soon. grandparents lived into their 80's. parents 65 and 75s but there was a lot of smoking going on there, with the typical results. need to retire while I can still do stuff, though.
I wouldn't mind working until I'm 70 or 75 but depends on the job. Most jobs lately are pretty intense and high stress. At my last company about 10% of the employees were on stress leave from unmanageable workloads and they were still laying people off
QA , taking CPP early you lock yourself at less income and decide to continue to work , you still have to contribute to the CPP even though you’re locked in at the $ amount you choose to start it until age 65?
I have no clue what to do. Last year they found a 4cm brain tumour in me that I had to have removed during a surgery. They couldn't get it all out and shot what was left of it with radiation. They don't expect it to grow back but who knows? Also to make sure there were no additional tumours they did more tests and inadvertently found I have a mild fatty liver. I think I want to take it at 60 if I make it long.
Considering the reported returns of CPP, contributions @ 5% returns per year (which seems conservative) the pool of pension available vs the payback seem to be out of sync. Can you do an analysis with regards to this. The proponets of the APP are using this as a talking point.
I'm taking mine at 65 because a) I'm in perfect health (knock on wood), and B) the amount I'll receive far exceeds the amount I would've received at 60.
This guy always make thing complicated. One key point to take CCP at 60 if you do not have employment income is to have more money to enjoy life while you are young, who cares I will have more money at 90’ that at that time likely spending the whole day sitting and looking outside my window!
Well I guess if you have a defeatist attitude to aging it may work for you. I for one don’t plan on just sitting around in retirement waiting to die.Those that continue to enjoy life to its fullest after retirement live longer. Both my parents were very active until the last few months of their lives which ended for both at 93.
im thinking of taking it at 60. my thoughts is if i pass away that my family can get that money but if i wait till 65 to get money family will get nothing. my health is not the best.
What bothers me is if I use my rrsps to fund my living from 60 to 65 and delay cpp until 65, then I or my spouse dies, the cpp drops dramatically, oas stops and I've taken a large chunk of rrsp that could have still been working for me and providing dividend income.
@@GordCheswick Yes, I realize that, but if my spouse and Ive been dipping into our rrsps to delay taking cpp and then if one of us dies, the spousal cpp drops dramatically the spousal oas is gone and we've used rrsp funds that we can never get back. It only works if both spouses live long after retirement.
@@GordCheswickmost couples use net income. The loss of the spouse’s income directly harms the survivor. For this reason we got 400k life insurance years ago and take reduced company pensions so on death we’d lose oas only.
Technically true, but if your household is based on that higher figure loss of a good chunk of it is often the difference between living in your home and being forced to live in a studio senior's apartment. @@GordCheswick
Took mine at 60, if I waited until 65 it would be $300-$400 more per month, but from 60-65 I will amass close to $50,000 . It would take me until I am 72 to make that $50 k back @ $300-$400 per month
I am no accountant however when you speak of losing thousands of dollars by taking it early, I see it the other way. Let's say my CPP is 600 bucks a month at 60, that's 7200 a year x 5 =$36,000. How many more years would I have to live beyond 65 to every re-coup that 36 grand that I gave up by deferring it until 65... Something to think about folks...
I am almost 66 years old in June.. I have 0 income, who can help me to fill out my applications for OAS AND CPP. In a way more efficient. Any cost to pay to any financial advisor. Any advise?
If you take it at 60, but you're still working (salary or freelance),do you still have to contribute until 65? Or does taking it stop the obligation to contribute ?
I decided to take my CPP a few months(Sept) before I turned 62(Nov). I'm still working until I turn 63. I saw that my CPP increased in December. I have a defined pension, a small RRSP, TFSA, and some stocks (>100k). My health is "okay" but I've been in Healthcare for 20 years, time to go!
Imagine paying into CPP for 45-50 years and living pass 80 or 85. Now you’ve left so much money on the table for the government to keep. In this scenario I’d feel pretty stupid. If I died at 66 I’d be dead and wouldn’t feel anything.
People are living longer than they ever have in the history of humanity. So take this guys advice with a grain of salt. If you are worried about dying sooner than look at your parents lives coz you will possibly perish at the same age …
Adam I never hear about self employed people about taking ccp early. You must factor in tat a self employed persons pays both employee and employerortion of the capital premium to cra. As soon as you start taking cpp this is reduced to 0. I took cpp at 60 and happy that I did as a self employed person.
quick question, i have maxed out my cpp contributions. I plan to retire @ 60 and only take my cpp @65. Will i get a clawback because I did not contribute for 5 years?
I will start collecting CPP this year in June at age 65 after paying the max for 42 years. I retired at 62. I figure I would receive the max but was surprise that it was slightly reduce. Not sure why? Should I inquire regarding their calculations?
I have opted for CPP after 65 years. But I am still working and contributing CPP. I will be eligible for OAS and GIS after 5 years as I came to Canada only five years ago. Should I continue to opt for CPP or stop.
How can you find out how much $ you will get if you take your CPP at 60 or 65? Is there a Government website that you can go to that will provide you with this information so you have an idea of the money you will be able to take at 60 vs waiting until 65?
Hi Adam. Can you please clarify something about delaying CPP payments to age 70. For this exercise, let me make the following assumptions. I am currently age 65. I am eligible to receive the maximum amount of CPP of $1364.60 per month ($ 16,375.20 annually). The rate of inflation for the next five years will be 3%, which means a corresponding annual 3% increase in CPP payments. Therefore at my age 70, the maximum CPP payment will be $ 18,983.34 annually. My question is: Is the 42% maximum increase (by waiting to my age 70) applied to the CPP benefit that I was entitled to at age 65 ($16,375.20 for a new value of $23,252.78) or to the current maximum payment value at age 70 ($18,983.20 for a new value of $26,956.14)? Thanks Adam
CPP is indexed to inflation. If the maximum is X currently and the CPI is 2% then the following year its X plus 2%, plus 7.2% of the increase for delaying for 1 year. If you wait the five years until 70 it's the yearly increase ( Cpi) X 5 years of those rates plus the increase of 7.2% / year for a total of 42%.
@garth217 Good reasoning, imo. But, cpp increases 8.4 % percent for every year you delay it (.7%/mo). It is OAS that increases 7.2 % each year you delay it (.6%/mo). Maybe you just got them mixed up. in any case, given the factors you indicated, it seems that CPP would increase by at least 10 percent for each year you delay it for the amount you would have received at age 65 if you did not delay it.
Hello Adam, I am hoping you can provide some quick insight regarding how low or no income years will affect my CPP payment. I have been retired since my 55 birthday. We have been living off my wife's defined pension with no issue. I deferred my pension until my 60th birthday. We are doing very well on one pension. Therefore, any extra funds go into our TFSA account, which we will be making out. I know you had indicted that anyone with 8+ non contributory years should consider taking CPP early. The longer I wait seems to indicate that this will adversely affect my CPP payments. Since we really don't need our CPP now, I was planning on pushing it back to 70. However, it now looks like it would be best to take it anywhere between 60 & 65 to reduce the overall impact on the funds i will receive. Can you let me know that despite having 8+ non contributory years by the time, I would start Cpp at 70. Would you still recommend staring CPP later rather than earlier to gain the additional 42% increase in payment. I will have over 15 years of no contribution to my CPP. THANK YOU
For financial reasons I had to take my CPP at 60. I can barely survive on the meagre amount they pay out. From what I can tell there no other sources of government benefits that I am eligible for until I turn 65. I was just wondering if you knew of any other government benefits for people like me.
Never compare yourself to the kind of health, or how long your parents and grandparents lived, including genes. Deepak Chopra said we can change our genes.
Both my husband and I began our CPP at 60, and we were both still working full time. We placed the monthly amounts into our TFSA accounts without using the payments. Our decision was based on loosing a close friend quickly to cancer and he had not retired nor received his OAS or CPP, he signed his work pension however, passed before he received his first payment. Life is short and we both wanted even if not full amount, what we could get just in case we did not live out the time to reach the full payments amounts.
And life can be long. Imagine running out of money in your 80s.
There are other advantages taking it early that many do not mention and that is should you need the money for whatever, you have it and don't be surprised if the gov changes the rules and extends the retirement date or something along those lines. A decision like that would not affect you.
I did the same . I collect CPP at 60 . I save in a TSFA . You can you use the amount to supplement and or purchase a new or used vehicle in the future . It’s a win 🥇 win situation .
@@EverybodyLovesMoe Exactly. The government can change the rules.
I’m 59. My wife and I earn about 250k. I’m thinking that your idea is right but not sure of tax implications
I've lost friends every decade of my life. I take nothing for granted. I turn sixty this year and don't necessarily need it now but i will be taking it. The best years of your life are usually the ones right in front of you. You may not enjoy it as much at 70 depending on how your life pans out. Jmo.
agree here take it while you can to enjoy
Take it at 60forget about savingnit investing it. Spend it have fun u have saved all your life. Enjoy it now
Always interesting to hear your take on things. I think the first rule is: If you need it at 60, take it at 60. I'm all for compromise between 60 & 70...I took it at 65. Best of both worlds to my thinking.
I took CPP at 60 with no regrets. 60 to 65 are your best travel years so the money is more valuable than at 80 if you are trying to enjoy retirement. One factor some forget is once you draw CPP there is a cost of living increase each year so you will get 5 increases before 65. So compare the 65 pension number to the 60 pension number plus 5 cost of living increases. It worked for me, having the money when young enough to enjoy it is a consideration.
Agree, enjoy your 60' s and 70's while you can. I'll probably just be collecting dust in my 80's.
my two brother both dies at 61 & 62 and never took their CPP like I told them.
I took mine at 60 and am now 70 and spending every nickel they give me to help the economy. lol
I retired at 59 took cpp early and w/d RSP to top up Income. I was concerned that the 5 years of not working would effect the non working years. I have a very meager budget and will be better off once OAS kicks in at 65 and I plan to get GIS too. I expect to live until 80/85. My home will pay for my retirement home if it comes to that, but hope to age in place. Basically I'm house poor, but glad I have a roof over my head.
Great words of advice ....however "a smaller balloon is better than no balloon" ... Nobody knows how many days we have left here in this journey… as Steve Miller said.." Take the money and run!!"""
Listen to how he's telling you why you should take it at 60, but at the same time trying to deter you from taking it based on the money you could have. I plan to take mine at 60 and live somewhere with a lower cost of living. The world's a big place and there are many places you can live where that little bit of money can make a big difference, you're not stuck where you are unless you want to be stuck.
I turn 60 this year. I’m already the working poverty so absolutely I’m going to collect asap! I don’t trust it will even be available for me at 65
I'm and thinking the same in two years . Could you tell me the total what a guy collects per month ?
I've worked since 14 so I've paid enough 😂
Thanks !
Don’t trust it? It’s fully funded and ain’t going anywhere.
@@gp7910you actually haven't. It doesn't matter how long you have worked leading up to pension eligibility. For every year after you become eligible though, the monthly amount goes up.
If you start collecting it too soon, you're not doing yourself a favour. You'll get more if you wait longer. Relying on pension is a very different lifestyle than working is. You can't rely solely on a pension to cover your basic expenses.
WHAT IF YOU DIE AT 61 THEN THAT MONEY IS GONE
@@Liberal_From_Prairies689
My marriages ended and that means less money in. I hadn’t wanted to take CPP but I need to live.
I retired at 44 and started collecting at 60, I’m 61. I’d rather have it now and use than waiting until I’m too old to travel or do things I enjoy. I won’t need the same amount of money in 10-15 years. If I’m still around.
Really?
You won’t need it because you have enough money now to carry you through the ever increasing inflation?
You figure to curl up and die at 71-76 yrs?
I am 59 , I have had 3 cardiac events in the last 11 years . I am taking it at 60 !
That’s good god bless you ❤
Get a glucose ketone meter and keep your glucose to ketone ratio 2.0 or less... and walk 2 hours per day.. For further info contact me.
I would also say if the markets are low, it may be better to take an early CPP instead of drawing off of investments that are temporarily low.
Adam! Goodness! Reading the comments indeed there are die hard opinions. (pun there :)]. It was so important that you produce a video like this. You are listening to your audience and their concerns. Thank you. Clarifying your position that you are educating Canadians and the like to the financial landscape of taking cpp early, middle or later. It is up to the individual, you are not there to take away their decision, you are there to support with awareness. Your hard work is noted. Closing in on 100.000 subscribers. Well deserved! As with CPP and waiting, Subscriber 100K is worth the wait! 👍💯 Chiming in, Atlantic Canada always a fan and supporter.
Everyone needs to do the math and let the numbers speak. ❤
100%. Emotions take over for most.
Just discovered your videos this morning. Very good advise for folks.
Glad you like them!
I gambled and threw the dice on taking my CPP at age sixty-five because my pension will be reduced by almost 60%. The phone company's pension plan isn't the what it's built up to be. That said, because of the huge reduction, I need to maximize my CPP payment along with my OAS to bring me almost back to where I am currently.
My wife on the hand took hers at sixty. Thanks for sharing.
Break even point is at 77 yrs of age when taking it at 60 vs 65. Just remember whenever you take it, it is that amount for the rest of your life plus mediocre COLA increases.
I will enjoy the 7.2% guaranteed increase from 60 while continuing to work at a job I enjoy and then maybe a few years past 65 with over 8% guaranteed increases.
For every year past 65 I wait, my combined pensions (CPP, OAS, company) increase $300 a month. Many, different opinions on this topic, but if healthy, enjoying working and earning a decent wage, no panic to collect early.
If you re-invest it (while still working) at 60 to 65 years, it provides a nice buffer. Your break even age will rise nicely.
Retired at 54. Im taking mine at 63. $1000/ month. My non contribution years kick in ( worked part-time after 54). Not doing an RRSP meltdown either because i have DB pension with a bridge until 65. Meltdown would increase my income to close to what I was making when i was working and all that would do is hit me hard in taxes..and just give my retirement savings to the government. It would also kick me into significant OAS clawback. I could wait to collect CPP, but why? More income means more taxes. No mortgage, no car payments, zero debt. Debt is the killer in retirement.
How will you get your money out of your RRSP before you die if you aren't going to melt it down? You'll probably lose 50% of it when you die. I would think taking the money out of the RRSP first and then taking CPP later would cost less in tax while getting the same amount of money. He has a bunch of videos on it that make sense of how to do it.
Simple strategy… 55 now. Working part time. My indexed DP pension puts me in the 28.2 bracket. I will meltdown RRSP from 60-68 years old to the 28.2 limit. Once RRSP’s run out take my CPP. I will take OAS at 65
I am in similar situation retired age 55 with DB and $200/mth bridge to 65 (my spouse retired same year age 65 with DB,CPP $900, OAS and both have $200k-300k RRSP each). I've been melting down my RRSP/RRIF big way age 56 to 59. Now age 60, I start taking my CPP $830 (36% decducted) and continue melting down RRSP/RRIF with adjustable amount (until age 70) trying to maintain most appropriate (avoid OAS claw back, tax bracket...) flat line of income each year for best tax benefits, until end of life. However when time come we still get higher tax hit with survivor benefits (DB and CPP)... My RRSP withdrawa give to my children for maxing their TFSAl (it'll be their inherent anyway, why not give them now😊). That is why I take my CPP age 60. It is better tax benefits. I understand each family has their own situation and own thoughts to decisions, but for us, rather give my children the money than let the tax man and government agents keeping our money!
@@thamc5862That's very smart. Meltdown and give to children. CPP and DB and investment dividends pay for life enjoyment
Retired at 57, DB with bridge to 65 in play, working part time now. No RRSP. 60 is coming up in a year, was thinking a good choice would be to draw at 60 and pay down debt (relatively small mortgage) a little early. But CPP on top of a bridge would mean more taxes for the 5 years. I think I might need a planner to crunch a few options.
As a retired military member my pension included a bridge portion to tie us retirees over until age 65 (CPP benifit and OAS). Once we start collecting CPP we loose our bridge pension portion.
I was in a car accident and suffered an injury that affects me daily. I had to retire from my job at 54 I need the money to live. My pension is ok but have you bought groceries lately?
I retired at 60 and did a quick calculation. How much money am I leaving in the pool for 5 years if I wait until I’m 65, and how long will it take me to earn back that money after 65. It was an easy decision that allowed me to retire from full-time employment at 60 and work part time as a freelancer doing what I love. Happiness also has a value. But I agree that one size doesn’t fit all, so I’m happy to hear another POV on the subject. If only I had a nickel for every time someone told me not to do this!
I did the same thing and it would take me to 83 to break even hahahahaha. I took it right away - chances of making it to 83 are not that great for anyone - and by the way. you wait get more and into a home you go and they take it all thank you very much for going without,,, hahahaha. none of these advice u tube bla bla ever think of that! they all say the same stuff, wait get more. hahah. the house always wins
I don't need the money. I'm in good health and working hard. I will take it at 65.
Took mine at 60. No regrets.
Could you tell me the total a guy can get at 60? I'll have paid into it 46 years at 60 😂
I’m getting 843 per month. My investments make another 1500, I do odd jobs. Son pays rm and board. No payments , no loans. Live on 3000 per month. Get debt free. Hopefully own your own home , Enjoy semi retirement. Work when I feel like. Love it. Not waiting to 65!!
@@ebaensey2983 thanks ! Good job
Always take any money owed to you immediately, air miles, points, government money you never know your last day
@@gp7910 Just log into your Service Canada account. It tells you what your CPP estimate will be at age 60, 65 and 70 based on the contributions you've made so far.
If I could just add, qualifying for GIS also plays a big part of this decision process for those who do not have a high income and may be better off taking CPP early.
GIS depends on receiving OAS not CPP. That said, if you qualify for GIS you probably need your CPP income just to get by on.
@@ddavidson5 GIS amount sharply decreases with any income you show (equivalent to 50% tax). CPP is considered income, unlike OAS. The smaller CPP amount taken at 60 will increase your GIS.
@@ew6392 Indeed, and to a point, if you lower your income you'll increase your GIS. I suppose the question is are you trying to maximize your income or maximize what you get from GIS? If you increase your income by $2 but you lose $1 of GIS it seems to me you are still up $1.
@@ew6392Indeed. To a point if you lower your income you will increase the amount of GIS you receive but is your goal maximizing your income or maximizing your GIS? If you increase your income by $2 and lose $1 of GIS it seems to me you are still up by $1.
@@ew6392Thanks, that was exactly my point.
I would say both 60 and 70 are two unfavourable extremes.
Agreed. No way will I wait until 70. I also.won't take it at 60 (I'm 53.npw).
I started collecting CPP at 60 based on 2 reasons. My husband retired at 62. Less than a year later had a stroke and with more tests has brain tumour. 2nd reason I would have lost 5years of benefits even at reduced amount. I also retired at 61. That last year of working FT and collecting CPP all went to taxes.(big error there). Ten years retired now and I don’t regret my decision. I guess I’m fortunate because I also have a company pension that I opted to collect early at reduced amount. I get OAS because my overall income qualifies.
My bills come due monthly, therefore maximizing monthly income after retiring from work when I no longer have employment income is the priority. Taking CPP early (while still employed) is counter to that need as it will reduce the monthly income in my retirement years when there is no longer employment income.
The other side of that is if you pass away one or two years after taking it at 60 you at least get some of your hard earned money back. However if you didn’t start at 60 and let’s say passed away at 62/63 that money goes to no one 🤷🏼♀️ .
If you have a high income, then yes it won’t benefit you to take it, however millions of people do need it, so take it. My mother always said you will find a way too survive. Will everyone of us be around at 65 🤷🏼♀️.. Tomorrow is promised to NO One! So enjoy today!
My brother waited to collect cpp at 65. After six months of collecting it he died.
@@RavinderSingh-hy7iz my brother-in-law passed away 3 days after turning 63, and I’m not sure if he took his CPP at 60 🤷🏼♀️
One interesting thing to mention. May be a bit off topic but my mom had a nest egg that she got from an inheritance. Some got used but there was always a fear to save it so you don’t run out. Eventually she went to a nursing home due to health issues but not until around 80 (she did to private retirement home after a stroke around 75).
But now to my point, in an Ontario nursing home she paid much more for her room and services those someone with low income. And my moms income wasn’t high but just higher than the threshold for retirement home costs. Interesting experience to see. I’m glad it exists as those low income seniors should get care but if you are in that middle area, enjoy your money and life while you can.
@@DR17dede absolutely! My brother always said you can’t take it with you so enjoy it while you can 🤷🏼♀️.
Martel, sorry to hear about your friend and you are completely correct to take Cpp whenever you choose. Despite being a financial decision it's also a very emotional and personal reason as well. I am sure everyone has a reason why they took their Cpp at a differing time.
This is a great video and this is always a hot topic and a lot of people are unfortunately confused between taxes and cpp thinking the higher the income the more taxes they pay the more pension they will be entitled to not factoring the YMPE in additional to the impact on OAS clawback and GIS for low income seniors 65+ these things should be thought early on but as the saying goes if you thing the government will help you fix your life than you have 2 problems 😢. Good luck to you all know your numbers live within you means budget invest have Financials goals and discipline it will all work out at the end👍🏽
The higher the income the MORE YOU WILL PAY!
If you wait 5 years and take it out at 65 you are starting at zero. It isn’t like you can take the money out for those 5 years of waiting. I calculated for it to equal out you have to reach the age of 72 and then the extra money from waiting starts become more. But for the 12 years if you invested the money wisely you will be far ahead. If you invest it and get a 5 percent return the amount you will have will be double what starting at 65 is. An example is. $634 at 60 at 5 percent investment return equals $196,500 at the age of 72. (12 years of investing )$991 at 65 at 5 percent investment return is a total of $101,300 at the age of 72 (7 years of investing) of course you would have to invest it and in a TFSA. But even if you don’t invest it and spend it, the amounts received will be equal at 72. Of course your situation may be different from mine. If you are still working between 60-65 you will be taxed more. I retired early and my pension along with the cpp is lower income.
❤
Yep.....with a modest ROI of 4.5% I figured the break even was 78 years old. Assuming both options (taking at 60 or 65) invested and didn't spend it. That makes a nice emergency fund by the time you even hit 65.
Plus you actually have the $100K+ instead of it sitting in CPP to be doled out monthly.
Plus you actually have the $100K+ instead of it sitting in CPP to be doled out monthly.
great advice. Thanks Adam.😃👍
We both started collecting at 60, I worked till 62 and while collecting I bought silver each month and my husband turned his into cash we live on one income paid off debit and retired @ 62 & 65 with no regrets or worries. We are now in our 9th year and we are doing well except we would do better if this government'S (NDP) would get rid of the carbon tax that is effecting us big time now.
This video was recommended by UA-cam when learning about cpp programming language
My CPP is only worth about $300 a month, so it doesn't matter when I take it. I will be working 'till I die.
MOVE TO AFRICA .. YOU WILL BE FINE
Great atttitude
Remember, there's also OAS at 65, and if you have low income, GIS as well at that time.
If you have no other pensions besides cpp and old age i believe you should not take cpp untill you retire at 65, you will need the max amount of cpp at your retirement.
Retired at 58, RIF income payments, 63rd birthday is the CPP plan.. Don't forget, OAP at 65 as well adds to your income.
Btw, taking extra and maximize your TFSA. I am doing this as well.
I'm receiving CPPD. Looking into what happens at 65 and the information is confusing. It turns into CPP retirement pension, but I'm also seeing that Disability payment can continue after 65.
Would be a great topic for another video
I was in CPPD also and just turned 65. The CPPD discontinues but you do get CPPA but it’s lowered. What I don’t get is that it says in their website you get $1394+ but I am not getting that. I’m getting way less.
I’m 59 right now and on CPP disability, what happens at 65 with my pension? Can I collect Old Age Security at 60? I’m not sure how any of this works.
Adam,
- While the CPP grows while in "the pool", if I die my partner gets NOTHING!?
- Isn't it better to own the money? "one bird in the hand is better than two promised'?
- My current TFSA investment returns average 9-11%/yr.
- How hard can it be to make 7%? (what CPP gives you).
- My RRSP & TFSA are not maxed-out so putting my CPP into those means "I" own the money. No?
- Say I do not need the money now (say 500$/mth) and leave it with CPP, two years later I have a big expense (medical, etc),
CPP is not going to give me 12k$ to cover that. Even if my CPP by then would give me 14% more per year. I do not see the advantage.
- I am going to be 63 this year. My partner 61. We have about 200K$ saved.
- We are going to have to hit the trigger on these decisions shortly.
- Do YOU personally work with and do financial planning for clients or just the six planners who works at Parallel do?
Great video, great channel. (I follow with different accounts due to recent YT restrictions and policies).
Thank you for your answers.
Given your circumstances, taking it earlier might be the best choice. Just to add a couple of things:
1) CPP grows by 7.2% from 60-65, then by 8.4% a year from 65-70. It also grows by wage inflation during this time, so 10 or 11% overall might be more realistic after age 65. After you take it, it grows by the federal government’s CPI instead of wage inflation.
2) Adam also does plans. He did mine. He is a Certified Financial Planner. You can check out his profile on the Canadian CFP professionals’ website.
I'm still working and I'm 64. My plan is to work until 68. I love my job and its a mere 4 minute drive from home. I'm only working till 68 because my wife is over 4 years younger and won't retire till 64. For me, no sense retiring to be home alone. My current decision is, do I start taking it at 65 or wait till I retire at 68. Between my wife and I we make excellent money. My company pension uses most of my RSP contribution. I contribute whats left in a personal rsp. I could take my CPP and OAS at 65 and put it in to TFSA. I would have no rsp space to shelter it and since there is no tax shelter benefits to a TFSA I'd likely be paying a lot of it out in income tax. I am working with a financial planner to get this sorted out.
I don't really have a choice. My workplace defined benefit pension plan allows for 30 and out and provides a top up to make up for CPP until the age of 65. I have to take it then as that is when that top up goes away. I will qualify at age 62 and retire then. My concern is around when to start drawing from my RRSP's and the tax implications of that income along with my pension income.
My company matches CPP if i retire between 60 and 65. Some people also take CPP because they're tired of being wage slaves and want freedom.
That's me, fed up...
So they want to try to enslave other people.
All companies within Canada are required to pay into their employees CPP, not only yours.
@@maryjeanjones7569 i dont think you understood
I spend mine as fast as get it. Snowmobiles sxs and whiskey.
The rest you just blow foolishly.
Enjoy your lunch money from the government at sixty because life is short after working like me for 40 years underground in the mine many friends never got to see a dime of it due to death
The CPP will be around BUT, inflation will be much higher so if you can take your CPP payment and invest in physical assets that are denominated in USD's....or at least have their value derived from USD's....So, take your CPP as soon as you can get it....and invest in those physical assets every month. Do not have the tax deducted, but instead, pay the tax the following year with inflation reduced money.....
Will I collect the full cpp pension if I am collecting a pension from my union? If it does effect the amount what would be the % I would get?
If someone who turned 60 ten years ago took cpp at that time to reduce how much they withdrew from their rrsp, which was invested in an s&p500 etf, today they would be ahead by a substantial margin. I realize there’s more risk in doing it this way, but it’s not like buying an individual stock. You’re either betting on the Canadian government or the American economy. Either seems just as safe a bet to me but the American economy would have delivered you a far better outcome and over a ten+ year time horizon that’s unlikely to change.
My RRSPs have been down since Covid. So 4 years of a down turn. Knowing the markets is like Knowing when you're going to die. Neither are certain
I took mine at 60. It’s enough that I can work part time and enjoy more free time to do the things I love before I get too old.
You can make more money but you can’t make more time.
agree
This is my plan , five more years to go :)
If you don't need to spend it, and you don't pay tax on it, and you have room to invest it all in a self directed TFSA, then take CPP at 60
Fortunately, my pension plan has a CPP bridge until I'm 65 and I retired at 54yo. I'll definitely start drawing my CPP at 65 because the marginal years aren't that far after that. Travel becomes very expensive for insurance after 70 and life becomes very simple if your house and debts are free and clear.
Thank you for the advice
I was reading on the Service Canada website that if I take CPP at 60, and still working after that, I can still contribute to CPP and it will be added and adjusted as I go along.
Correct.
If you defer CPP until 70 but you work b/t 65-70.....your income b/t 65-70 is greatly reduced to say 24K a year....Questions: 1.Does the smaller amounts you'll pay into CPP from 65-70 drag down the amount you'll get at 70? 2. Can you opt out of paying further into CPP past age 65? Would it make any difference?
You DO NOT have to pay into CPP after age 65
It's interesting how few financial planners ever mention the effect of CPP on GIS, even though 1/3 of retirees collect GIS. I guess there is an assumption that only rich people watch these videos, or that only rich people are of benefit to financial planners.
It's another argument for taking CPP at 70 - which we highly recommend.
Take the CPP asap. A dollar now is better than an inflated and higher taxed dollar later. That discount on the pension payout is because they know the dollars you get now are worth at least 30% more than the dollars you will get later. This is especially true if CPP isn't going to affect your income/lifestyle in any case. No matter what you do you have to recognize dollars paid into the CPP are likely the worst investment you will make.
As a type 2 diabetic with other health issues it never made any sense to me to delay CPP hoping I would live long enough to recoup the five years of non-payment.
I have applied to take at age 60. I still work but does not trust CRA. Yes it will be taxed as income instead of going to Ukraine.
I encourage you to look a little longer term than this. By taking it early statistically you are helping them more, as they will pay you less to life expectancy.
Because of taxes, my advisor said I should wait until I'm 70 to take CPP and OAS and to draw down my RRSP's.
My initial plan was to take it later and burn down my own savings until I’m 70. My financial advisor point me another reason for a middle way. He advice to keep some money in case you need a fix amount. A bigger amount every month is nice, but doesn’t help when you need a 10k-20k more.
My guess is your advisor gets paid for managing your assets?!
My mother was looking forward to retiring at age 65 and doing all the things that she wasn't able to do during her working years raising 4 kids on her own. BOOM...she turned 65 and was diagnosed with a terminal illness. Life is short and planning for the future is precarious.
I went to an Omer’s seminar and the speaker said to take it at 60. You take a hit initially but you gain some back every year through indexing and if you work you pay into a secondary cpp so you actually will get more because you can invest your earnings for 5years
Bad advice for most
Yes CPP payments are indexed, but so is the benefit calc itself (more or less) up to the point where you start to draw, because it's based on the previous 5 year avg of YMPE. YMPE keeps going up too (but it's not hard-linked to CPI afaik)
Great info and advise. Here is a retirement plan question no one seems to be able to answer. If I retire at 60 and stop paying into CPP but don't start withdrawing till 65, will the monthly payment continue to grow for those 5 years. Lets say my 60 year CPP would be $870 and the forecast for 65 was $1350? How is the value arrived based on waiting the 5 years and stopping contributions. The CPP board can't seem to tell me. It's vital info for a retirement plan. We have funds to supplement but not if it costs too much at 65. thanks
It will depend how many non-contributory years you have prior to age 60. If not many, then these 5 years could be unaffected. You essentially get 7 years of non-contributory years to CPP. So if you have 7 (or more than 2) prior to age 60, then your $1350 will be reduced slightly. But your annual amount from waiting increases as you are penalized for taking prior to age 65. I have never seen a situation where taking it earlier gives you more...hope that helps.
Make a service canada account it wiki show u everything
Thanks for this information! May I ask… if you go on CPP Disability before age 60 do you automatically start getting regular CPP at 60? Do you have the option to wait until 65?
CPPDI stops at 65. You can delay reg CPP to 70
@@ParallelWealth thank you!
Hi Adam ! Do you know if Doug Runchey still around? I need his service in regards with my cpp calculations
Yes, but on a limited basis
Thank you
Forced to retire at 35. Rev Can representative was surprised to see I had already contributed twice average cpp payments for life time. Half million in 25 years as blue collar worker.
Worked at as many as three jobs at at time. I qualified for top pension .
But I've met lots people with less skills almost no work record and they all make more than me. I've never met someone who made less .
There are caps, no??
EXACTLY.. Take your Quebec pension @60.. too many hold out longer bc they will get more at a higher age.. Ya ok.. What if you don't make it ey !🙄
Just take the damn thing as early as possible 😜👍🏻 and enjoy
@Parallelwealth Adam, thank you for your videos they are always well organized and well explained. I also took your advice from another video and read Frederick Vittese's "Retirement Income for Life" over the summer, as I'm thinking of retiring in the next 1 to 2 years. I have to be honest I'm still very confused about CPP. Specific to this video, you mentioned one of the reasons why you would take it out might be to invest it yourself from age 60 to 65 (or 70) and a reason you gave to perhaps reconsider is that you aren't likely to match the 7.2% interest you are gaining by leaving it in. However, to me you aren't really gaining anything as you aren't actually getting that money, but rather a higher percentage but starting much later down the road. I'm wondering what the break even point is on a typical person who has stopped working (and thus stopped paying in as well) taking it at 60 at a lower percentage, versus starting later at a higher percentage. Again, like I said it's all kind of confusing and it would be amazing if there were a convenient tool for Canadians to put in some "what if" scenarios to run the actual numbers with all the myriad other rules laid down by the CPP. To quote Vettese in his book, "fewer than a dozen people in Canada" can fully explain all the rules to CPP...and that's just not copacetic in my opinion. It's a fairly big decision that shouldn't be this nebulous.
So as near as I can figure, the break even point between taking CPP at 60 or 65 would be at age 72 ish. Beyond 72 you will earn more if you took CPP at 65 because once you take the reduction at 60, you never get it back
4:35 Adam you mention the case of someone already hitting 39 maxes by 60. Afaik, you only need 35 maxes to be "full" by age 60, since the dropout provision is based on the years from 18 until you start cpp ?
I wanted to retire last year at 55, but covid sucked the value of savings.
I remember in an older video there was mention of your company/team developing a CPP calculator. Did that happen/will happen/get abandoned? I ask because it would be great to be able to calculate CPP based on retiring at 60, so 5 years of not contributing plus potentially other years on lower or no contributions, to see the true numbers at 60 - 70
I would like to know this as well Adam. :)
Get Doug Runchey to run your numbers. We'll worth it. My actual $$$ was only $15 bucks different from the CPP government website estimate
It's in the works. But taking much longer than we could have thought - in the pipeline for 2024 though.
@@ParallelWealth Thanks for the update Adam. Coming from a development background I totally get it. Can't wait to see it. Cheers
@@ParallelWealth Didn't you say qpp has one that calculates more effectively. Has ability to drop disability and child rearing years, if you stop working/stop contributing to cpp, etc
Couldn't you leverage that one for the scripts, etc???
I'm 60...no plans to take it any time soon. grandparents lived into their 80's. parents 65 and 75s but there was a lot of smoking going on there, with the typical results. need to retire while I can still do stuff, though.
I wouldn't mind working until I'm 70 or 75 but depends on the job. Most jobs lately are pretty intense and high stress. At my last company about 10% of the employees were on stress leave from unmanageable workloads and they were still laying people off
Take the money early
QA , taking CPP early you lock yourself at less income and decide to continue to work , you still have to contribute to the CPP even though you’re locked in at the $ amount you choose to start it until age 65?
This is so funny. I'm 62. Two and a half years from pulling the plug and I read the comments and feel like home. LOL
I have no clue what to do. Last year they found a 4cm brain tumour in me that I had to have removed during a surgery. They couldn't get it all out and shot what was left of it with radiation. They don't expect it to grow back but who knows? Also to make sure there were no additional tumours they did more tests and inadvertently found I have a mild fatty liver. I think I want to take it at 60 if I make it long.
Considering the reported returns of CPP, contributions @ 5% returns per year (which seems conservative) the pool of pension available vs the payback seem to be out of sync. Can you do an analysis with regards to this. The proponets of the APP are using this as a talking point.
I started taking CCP at 60 years young. I am 74 now.
I'm taking mine at 65 because a) I'm in perfect health (knock on wood), and B) the amount I'll receive far exceeds the amount I would've received at 60.
This guy always make thing complicated. One key point to take CCP at 60 if you do not have employment income is to have more money to enjoy life while you are young, who cares I will have more money at 90’ that at that time likely spending the whole day sitting and looking outside my window!
And if you're in a nursing home, they will take a portion of it no matter how much it is!
Well I guess if you have a defeatist attitude to aging it may work for you.
I for one don’t plan on just sitting around in retirement waiting to die.Those that continue to enjoy life to its fullest after retirement live longer. Both my parents were very active until the last few months of their lives which ended for both at 93.
Because it IS complicated. Whether to take it at 60 is different for each person.
Hi @parallelwealth, I understand CIPF protects your assets up to $1,000,000 but is there any way to get protection if you have more than that?
Yes the coverage is per financial institution so just spread those big bags of cash across multiple banks and you're covered.
im thinking of taking it at 60. my thoughts is if i pass away that my family can get that money but if i wait till 65 to get money family will get nothing. my health is not the best.
What bothers me is if I use my rrsps to fund my living from 60 to 65 and delay cpp until 65, then I or my spouse dies, the cpp drops dramatically, oas stops and I've taken a large chunk of rrsp that could have still been working for me and providing dividend income.
You spouses CPP/OAS stops - not yours!
@@GordCheswick Yes, I realize that, but if my spouse and Ive been dipping into our rrsps to delay taking cpp and then if one of us dies, the spousal cpp drops dramatically the spousal oas is gone and we've used rrsp funds that we can never get back. It only works if both spouses live long after retirement.
@@GordCheswickmost couples use net income. The loss of the spouse’s income directly harms the survivor. For this reason we got 400k life insurance years ago and take reduced company pensions so on death we’d lose oas only.
Technically true, but if your household is based on that higher figure loss of a good chunk of it is often the difference between living in your home and being forced to live in a studio senior's apartment. @@GordCheswick
Took mine at 60, if I waited until 65 it would be $300-$400 more per month, but from 60-65 I will amass close to $50,000 . It would take me until I am 72 to make that $50 k back @ $300-$400 per month
Every situation is different fortunately in my case I have no debt so I’m waiting till 65
I am no accountant however when you speak of losing thousands of dollars by taking it early, I see it the other way. Let's say my CPP is 600 bucks a month at 60, that's 7200 a year x 5 =$36,000. How many more years would I have to live beyond 65 to every re-coup that 36 grand that I gave up by deferring it until 65... Something to think about folks...
I encourage you to look at it outside of a silo and integrate with other assets. The different compounds quickly
I think the same way as you think! Take CPP at 60
I am almost 66 years old in June..
I have 0 income, who can help me to fill out my applications for OAS AND CPP. In a way more efficient.
Any cost to pay to any financial advisor.
Any advise?
If you take it at 60, but you're still working (salary or freelance),do you still have to contribute until 65? Or does taking it stop the obligation to contribute ?
Imagine paying into CPP for 45-50 years and then croaking at 66, take early if you can!
I decided to take my CPP a few months(Sept) before I turned 62(Nov). I'm still working until I turn 63. I saw that my CPP increased in December. I have a defined pension, a small RRSP, TFSA, and some stocks (>100k). My health is "okay" but I've been in Healthcare for 20 years, time to go!
Imagine paying into CPP for 45-50 years and living pass 80 or 85. Now you’ve left so much money on the table for the government to keep. In this scenario I’d feel pretty stupid. If I died at 66 I’d be dead and wouldn’t feel anything.
@@kevlar111 you must work for the government
@@ShitWrangler Why would I work for the government?
People are living longer than they ever have in the history of humanity. So take this guys advice with a grain of salt. If you are worried about dying sooner than look at your parents lives coz you will possibly perish at the same age …
After 5 years of collecting it you have 60 months of payments in hand. Thats yours why wait for them to change the rules and they will.
Adam
I never hear about self employed people about taking ccp early. You must factor in tat a self employed persons pays both employee and employerortion of the capital premium to cra. As soon as you start taking cpp this is reduced to 0. I took cpp at 60 and happy that I did as a self employed person.
quick question, i have maxed out my cpp contributions. I plan to retire @ 60 and only take my cpp @65. Will i get a clawback because I did not contribute for 5 years?
CPP does not have a clawback
I will start collecting CPP this year in June at age 65 after paying the max for 42 years. I retired at 62. I figure I would receive the max but was surprise that it was slightly reduce. Not sure why? Should I inquire regarding their calculations?
Definitely challenge them, but don't expect logic or math.
Self-employed pay 2 times the CPP premiums. Take it early
I have opted for CPP after 65 years.
But I am still working and contributing CPP.
I will be eligible for OAS and GIS after 5 years as I came to Canada only five years ago.
Should I continue to opt for CPP or stop.
Check on the OAS assumption. You need to be in Canada for 40 years to get the maximum amount. 10 years here will get you 25% of OAS or about $182/mo
How can you find out how much $ you will get if you take your CPP at 60 or 65? Is there a Government website that you can go to that will provide you with this information so you have an idea of the money you will be able to take at 60 vs waiting until 65?
Hi Adam.
Can you please clarify something about delaying CPP payments to age 70. For this exercise, let me make the following assumptions. I am currently age 65. I am eligible to receive the maximum amount of CPP of $1364.60 per month ($ 16,375.20 annually). The rate of inflation for the next five years will be 3%, which means a corresponding annual 3% increase in CPP payments. Therefore at my age 70, the maximum CPP payment will be $ 18,983.34 annually.
My question is: Is the 42% maximum increase (by waiting to my age 70) applied to the CPP benefit that I was entitled to at age 65 ($16,375.20 for a new value of $23,252.78) or to the current maximum payment value at age 70 ($18,983.20 for a new value of $26,956.14)?
Thanks Adam
CPP is indexed to inflation. If the maximum is X currently and the CPI is 2% then the following year its X plus 2%, plus 7.2% of the increase for delaying for 1 year. If you wait the five years until 70 it's the yearly increase ( Cpi) X 5 years of those rates plus the increase of 7.2% / year for a total of 42%.
@garth217 Good reasoning, imo. But, cpp increases 8.4 % percent for every year you delay it (.7%/mo). It is OAS that increases 7.2 % each year you delay it (.6%/mo). Maybe you just got them mixed up.
in any case, given the factors you indicated, it seems that CPP would increase by at least 10 percent for each year you delay it for the amount you would have received at age 65 if you did not delay it.
Hello Adam, I am hoping you can provide some quick insight regarding how low or no income years will affect my CPP payment.
I have been retired since my 55 birthday. We have been living off my wife's defined pension with no issue. I deferred my pension until my 60th birthday. We are doing very well on one pension. Therefore, any extra funds go into our TFSA account, which we will be making out. I know you had indicted that anyone with 8+ non contributory years should consider taking CPP early.
The longer I wait seems to indicate that this will adversely affect my CPP payments. Since we really don't need our CPP now, I was planning on pushing it back to 70. However, it now looks like it would be best to take it anywhere between 60 & 65 to reduce the overall impact on the funds i will receive. Can you let me know that despite having 8+ non contributory years by the time, I would start Cpp at 70. Would you still recommend staring CPP later rather than earlier to gain the additional 42% increase in payment.
I will have over 15 years of no contribution to my CPP. THANK YOU
I would contact government of Canada for an accurate estimate on your situation.
Cost of living getting too expensived in canada ! Extra cash needed why wait at 65 ?
For financial reasons I had to take my CPP at 60. I can barely survive on the meagre amount they pay out. From what I can tell there no other sources of government benefits that I am eligible for until I turn 65. I was just wondering if you knew of any other government benefits for people like me.
Never compare yourself to the kind of health, or how long your parents and grandparents lived, including genes. Deepak Chopra said we can change our genes.
No rrsp for me. Useless. TFSA connected to mutual funds. Working fantastic and much better growth.