In this Video, I explain reasons to take CPP (Canada Pension Plan) early at Age 60

Canadian Government Pensions (CPP, OAS, GIS)

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Retirement planning is an essential aspect of financial management that individuals must consider as they approach old age. One crucial decision in retirement planning is when to start taking your Canada Pension Plan (CPP) benefits. While the standard age for CPP benefits is 65, individuals have the option to start receiving benefits as early as age 60. There are several reasons why taking CPP early at age 60 may be a smart financial move.

One of the primary reasons to take CPP early is the potential to receive benefits for a longer period. By starting to receive CPP at age 60, you will be able to enjoy the benefits for an additional five years compared to if you waited until the standard age of 65. This can be particularly beneficial for those who have a shorter life expectancy or have health concerns that may limit their ability to enjoy retirement in later years.

Another reason to take CPP early is the potential to receive higher total benefits over your lifetime. While starting CPP early will result in lower monthly payments compared to starting at age 65, the cumulative total received by age 65 may still be greater if you start early. This is because the payments received between ages 60 and 65, even at a reduced rate, can add up to a significant amount over those five years.

Furthermore, taking CPP early can provide financial flexibility that can be beneficial in retirement planning. By starting to receive benefits at age 60, individuals may be able to use the additional income to supplement other retirement savings or investments, allowing for a more comfortable retirement lifestyle. This extra income can also help address any unexpected expenses or financial challenges that may arise in retirement.

It is important to note that there are certain considerations to keep in mind when deciding to take CPP early. For example, taking CPP before age 65 may result in a reduction in monthly benefits of 0.6% for each month before the age of 65. Additionally, individuals who continue to work while receiving CPP benefits may be subject to a reduction in benefits if their earnings exceed a certain threshold.

In conclusion, taking CPP early at age 60 can be a wise decision for those looking to maximize their retirement income, enjoy benefits for a longer period, and achieve greater financial flexibility. However, it is essential to carefully consider all factors and consult with a financial advisor before making this decision to ensure that it aligns with your overall retirement planning goals. Ultimately, the choice of when to start taking CPP benefits will depend on your individual financial situation, health, and retirement objectives.