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Taking your CPP at age 60 will reduce your payment by 36% versus waiting until age 65.
We find that most of our clients jump to take CPP at age 60…it’s something they have paid into for many years and are eager to get something back out of it. While I understand the eagerness, it doesn’t always make sense.
Maybe you’re still working or you have a pension along with registered investments to fund your early 60s…if that is the case, it’s probably not best to start collecting CPP payments at 60. When does it make sense though?
1) You need the extra income stream to support you and pay your bills.
2) You didn’t work between age 55-60.
3) You have a shorter life expectancy – either from a current health issue or based on family medical history.
4) You are a conspiracy theorist and think that CPP will run out of money and you better gets yours now – this is a surprising large number of people.
Based on the 2019 CPP Chief Actuary report the CPP is sustainable for over a 75 year projected period.
5) You are concerned for OAS clawback and would prefer to have a lower amount for longer.
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DISCLAIMER: The videos and opinions on this channel are for informational and educational purposes only and do not constitute investment advice. Adam Bornn is not registered to provide investment advice and as such does not provide recommendations – those looking for investment advice should seek out a registered professional. Adam is not responsible for investment actions taken by viewers and his content should not be used as a basis for investment trades….(read more)
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Canada Pension Plan (CPP) is a national social insurance program that provides financial support to retired Canadians. CPP benefits are designed to replace a portion of an individual’s income after retirement. While the standard age to start collecting CPP is 65, individuals have the option to begin receiving CPP as early as age 60. In this article, we will discuss five reasons why starting to collect CPP at 60 may be a wise decision.
1. Early retirement: Many individuals dream of retiring early and enjoying the freedom that comes with it. By collecting CPP at 60, you can kick-start your retirement plans, allowing you to pursue other interests, hobbies, or even part-time work. Starting to receive pension income from CPP can provide financial stability and allow you to enjoy your retirement years to the fullest.
2. Longer life expectancy: Although the standard age to start receiving CPP is 65, it’s important to consider your life expectancy. If you have a family history of longevity or are in good health, the decision to start collecting CPP at 60 can make financial sense. Remember that the longer you live, the more you will receive in total CPP benefits.
3. Bridging the income gap: Some individuals may choose to retire from their main careers before they are eligible for other forms of income, such as Old Age Security (OAS) or employer pensions. In such cases, starting to collect CPP at 60 can help bridge the gap between retirement and other sources of income. This can help cover your expenses until you become eligible for other retirement benefits.
4. Financial need: Life is unpredictable, and unforeseen circumstances such as health issues or job loss can lead to financial challenges. If you find yourself in a situation where you require additional income, starting to receive CPP at 60 can provide some much-needed financial support. It can help supplement your savings or other sources of income during difficult times.
5. Enhanced quality of life: The decision to start collecting CPP at 60 can have a significant impact on your overall quality of life during retirement. With additional income, you may have the ability to travel, indulge in hobbies, or spend time with your loved ones. Starting CPP at 60 can open up opportunities that you may not have otherwise had if you waited until the standard age of 65 to begin receiving benefits.
While the decision to start collecting CPP at 60 is enticing, it’s important to weigh the financial implications carefully. Collecting CPP early can result in a reduced monthly payment, as you will receive benefits for a longer period of time. Additionally, if you continue to work while collecting CPP before the age of 65, you may be subject to a CPP reduction threshold.
Overall, starting to collect CPP at 60 can be a strategic move for those who are financially prepared and considering early retirement. However, it is advised to seek professional financial advice to evaluate your individual circumstances and determine if this option aligns with your retirement goals.
Great information, much appreciated. Question if I retire at 60 and not take CPP until 65 so I can receive $1100 instead of $650 I am told because I am not contributing for those 5 years I will get less than the $1,100 it says now I will receive. Is this true?
New on here. What is OAS Clawback?
You’re forgetting that most people make CPP part of their overall plan. You want to make sure that a persons spouse or significant other will benefit from having collecting early or they get nothing if you were to pass away before applying for CPP. You know that already.
Your GIS situation plays a role too.
None of those 5 reasons to take cpp at 60 apply to me yet my financial adviser advised me to take it at 60.Maybe its because i will empty my rrsp before 65 and then get gis at 65
Ah that's why they lie about the inflation percentage
….i wish we were a nation like France. they see the value of early retirement whereas here in North America our motto is work work work until you drop or end up in a nursing home…oh, but you'll have an extra few hundred dollars each month that the gov will take to pay for said nursing home! freedom and good physical/mental health is priceless
.hi Adam I work seasonal ,, I want to take my CPP at 62 .. Can I still collect EI while I get my CPP ,, I have misread I hope ,,,that CPP will not. I work seasonal ,, I want to take my CPP at 62 .. Can I still collect EI while I get my CPP ,, I have misread I hope that CPP will be deducted from my EI,,, I am still (working seasonal) If I read right is there a way around this being deducted from my EI,,, I am still (working seasonal) I read right is there a way around this
. I work seasonal ,, I want to take my CPP at 62 .. Can I still collect EI while I get my CPP ,, I have misread I hope that CPP will be deducted from my EI,,, I am still (working seasonal) I I read right is there a way around this
Good vid
Is an excellent idea.
I will be 59 yrs old this year and my husband and I are looking into moving to Panama and if I can get my CCP at age 60, I may be able to get into Panama under the Pensionado Visa. I have not worked since 55-60 as my husband has a good job also. I find out where to apply so I set up an account but when I try to apply, it says I can't use this service at this time. It showed how I should apply ahead of time so I am not sure what to do now. Any help would be appreciated. Thx
That was cool, now I am looking for an OAS clawback video. Lets see if you have one.
Is it true that if you are retired and keep working, the gouvernement will take 50% of every dollar earned at work?
A large amount of CPP is invested in China…
I don't think you even mention some other helpful facts-
I believe the break even is age 74. If you live beyond that, you left money on the table. Live to 90 and that's a lot of money.
Being single and perhaps having kids. No beneficiary. Die at 64 and they get nothing. Take it at 60, INVEST it and it will still go to your kids.
Bridge pension. If you have another source of income to offset the amount to get you to 65 or even 70.
You mention health and family health but obesity or if you are a smoker. You could be on good health but the odds are not in your favour.
Hi Can my 1950 born mother get OAS? SHE IS BCRESIDENT
Found out today that if both you and your spouse die the government considers what you have left in your RRSP that year as income and if its say $800,000.00 the Canadian Government takes slightly more than half of it. Shouldn’t we start taking it at 60 and putting it in a TFSA? At least in the TFSA your kids get it all. Most men don’t live past 78 and most women don’t live passed 84. I have a good pension, but not a great pension and a very small RRSP. I’m 69 and most of what I have don’t mature till I am 71. I am fairly healthy. No major diseases yet but Murphy could be anywhere.
Take it at 60….. Take it, use it as needed, reinvest it, throw it in an RRSP and make money. At some point YOU HAVE TO PAY THE TAX REGARLESS…Almost every "financial advisor" will tell you to wait unless in distress. I don't like leaving MONEY on the Table, NO GUARANTEES, your LIFE can change in a minute. When you hit the break-even point what the heck are you going to do with it anyways… You DIE once…Live EVERDAY 2023 Motto.
No guarantee you will make it to 65. I took it at 60. No regrets.
Reason 6: I started taking it at 60. Setup a self directed TFSA. My CPP goes right into there. I am now 64 with a 70,000 next egg I can draw on at anytime.
what if I take it at 60 and invest every cent of it in good canadian dividend payers? Wouldn't that pay off somewhat?
Hi I am wanting to get a rif.but do not want in stock market can I get a rif without investing my rrsps in the market?
Thanks Mike.
I took it at 60 and like my job. i will likely work until 67-68. I am also in good health. I continue to contribute to CPP and my rate continues to rise. I will receive far more when i fully retaire than the initial amount at 60. I have 25% taxes taken off at present which breaks me even at the end of the year when it is added to my salary. When I retire , I will pay no taxes(or close to zero) and be far ahead of starting CPP at 65 or67.. I calculate I won't be in a lose scenario until close to 80 and by then wont need as much…Enjoy CPP while you are of an AGE to do so. !!
I’ve watched the whole CPP series (I may have said this here already I’m sorry if it’s a duplicate) .. my situation is that I am 60, I have a lot of RRSP contribution room accumulated, and won’t have the resources to contribute fully between now and 67 .. I’m took the CPP at 60, bcz at 7% and tax free, I will make enough between 60 and 67 to more than make up for the loss from 67 through 90 – I’m about $100 a month ahead
I am 59! I am wanting to take CCP! At 60 and continue working at list till 65! The income would help alot to get a new vehicle to get to work! Plus do some renovation to the house!
Amen. .Hope.
Thank you very much for the excellent video. As always, your videos are quite informative and very easy to understand.
I have a question and I hope you will be able to answer it.
I am going to be 60 years old soon and I have decided to retire and start getting Government pension. I understand that I will get a reduced amount of pension if I retire this year (as opposed to retiring 5 years later at the age of 65).
My question is: Does early retirement at the age of 60 have any effect on OAS Pension, which begins at 65? What I mean is, does OAS Pension amount depend upon the CPP amount? Will my OAS be the same if I retire this year or after 5 years at the age of 65? Please provide some insight into this topic. Thank you very much.
Apply early cause you have to wait nearly a year. Just tell your bill collectors they have to Waite a year, shouldn’t be a problem..
I’m 63 and retired, still waiting after 8 months. Living off my wife’s paycheque, what a joke! I guess there working real hard at home!
I really appreciate your channel and all the great advice you give. You break everything down so I can understand it. Great content!
If taking CPP at 60,once you hit(if a person makes it there) 65,OAS is still 100% or does a person get punished because they took CPP early?
What if you are getting a spousal survivor benefit of 330 dollars a month and I’m going to get max CPP at age 65 I’m 61 now
To figure how long you are going to live compare how long your Mom/Dad lived.After that just go down the family line. Its not exact science but it should give you an idea.
I have no doubt that CPP funding will be there for a long time…its the eligibility requirements I am concerned may change. Lets face it, its scary how many conspiracy theories are coming true!
Stop foreign aid and increase Canadian old age seniors pensions, build hospitals in Canada, pay for children's dental in Canada, etc., etc. "instead" in Canada. A Government of Canada website did explain that since the 2010 earthquake in Haiti the Canadian Government has given away $1.8 Billion dollars to Haiti. That's Billion not Million, and that's only "one" country of many, many other countries we give away free money to. Take care of our own people in Canada first and foremost instead. The Canadian Government is in a very massive approximate $1 Trillion (1000× Billion) debt with interest, that debt was about doubled since the Liberals got into power. With borrowed money on interest, the Canadian Government can"not" afford to give away free money like water to other countries all around the world. Would you give money away to charity that was charged to your "credit card" with interest.?
Question for you. I work for a municipality and my employer pays half of the total contribution. My pension plan allows me to contribute an additional sum annually. It’s called an AVC. I turn 60 in the new year. Is it worth it to draw CPP to add to this AVC? I intend to work a little while longer and I’m wondering if the tax hit would be too great. The pro would be those CPP pay outs would now be in my estate and therefore transferable to my spouse upon my demise. Is this a good strategy? Thanks.
Hi Mr Adam ,
My name Helen
I would like to ask you questions : onTFSA and RRSP should be name beneficery or successor holder to the kids if parents passed away ,so they can get money with out pay tax
Thank you