Should You Take Your CPP Early? | Financial Tip 36

The Canada Pension Plan (CPP) is a government-run program that provides income to Canadians in retirement. The amount you receive in CPP benefits is based on your contributions to the plan during your working years. You can start receiving CPP benefits as early as age 60 or as late as age 70. However, the question remains – should you take your CPP early?

There are several factors to consider when deciding whether to take your CPP early or wait until you reach your full retirement age. One of the main considerations is your individual financial situation. If you are in need of additional income in retirement, taking your CPP benefits early may be a good option. However, if you are able to wait and have other sources of income, waiting to take your CPP benefits may provide you with a higher monthly payment in the long run.

Another factor to consider is your health and life expectancy. If you have a family history of longevity and expect to live a long life, waiting to take your CPP benefits may result in a higher total payout over the course of your retirement. On the other hand, if you have health concerns or a shorter life expectancy, taking your CPP benefits early may be the best option for you.

Additionally, your employment status and financial goals in retirement should also be considered. If you plan to continue working after the age of 60 and do not need the extra income from CPP, it may make sense to delay taking your benefits. However, if you plan to retire early or reduce your work hours, taking your CPP benefits early may provide you with additional financial security.

Ultimately, the decision of when to take your CPP benefits is a personal one that depends on your individual circumstances. It is important to weigh the pros and cons of taking your CPP benefits early and consider consulting with a financial advisor to help you make an informed decision.

In conclusion, while taking your CPP benefits early may provide you with immediate financial relief, waiting to take your benefits may result in a higher total payout over the course of your retirement. It is important to carefully consider your financial situation, health, employment status, and retirement goals before making a decision. Whichever option you choose, remember to plan for your future and make the choice that works best for you.

LEARN MORE ABOUT: Retirement Pension Plans

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