The decision of when to start CPP is one of the most significant financial choices Canadians face approaching retirement. The math is straightforward — waiting means more per month — but whether it’s the right choice for you depends on your health, your finances, and who else depends on your benefits.
How CPP Deferral Works
CPP benefits can start as early as age 60 or as late as age 70. Every month you delay past 65 increases your monthly benefit by 0.7% — or 8.4% per year.
| Start Age | Adjustment vs Age 65 | Monthly CPP (Example: $900 at 65) |
|---|---|---|
| 60 | −36% | $576 |
| 61 | −28.8% | $641 |
| 62 | −21.6% | $706 |
| 63 | −14.4% | $770 |
| 64 | −7.2% | $835 |
| 65 | 0% | $900 |
| 66 | +8.4% | $976 |
| 67 | +16.8% | $1,051 |
| 68 | +25.2% | $1,127 |
| 69 | +33.6% | $1,202 |
| 70 | +42% | $1,278 |
For the 2025 maximum CPP retirement benefit, the maximum at 65 is $1,364.60/month. At 70, that would be $1,937.73/month.
The Breakeven Analysis
If you delay CPP from 65 to 70, you give up 5 years of payments (~$54,000 at $900/month) in exchange for an extra $378/month for life.
To recover those foregone payments: $54,000 ÷ $378/month = ~143 months, or about 12 years.
Breakeven age: approximately 82–83 (70 + 12 years).
If you live past 83, you come out ahead by waiting. If you die before 83, you would have received more by starting at 65.
According to Statistics Canada, a 65-year-old Canadian man has a life expectancy of approximately 83.9 years; a 65-year-old woman, approximately 86.4 years. On a pure statistics basis, deferral is slightly advantageous on average — but this is a life expectancy average, not a guarantee for any individual.
Factors That Favour Delaying to 70
1. Good health and family longevity If you’re healthy, don’t smoke, and have parents/grandparents who lived into their late 80s or 90s, your personal breakeven is more likely to be hit.
2. You have other income to live on If you have employer pension income, RRSP/RRIF withdrawals, rental income, or significant TFSA/investment assets, you can live on those from 65 to 70 without needing CPP.
3. You’re still working CPP income while still working is fully taxable and may push you into a higher bracket. Delaying until retirement reduces this tax inefficiency.
4. You want to minimize RRSP/RRIF withdrawals Starting CPP at 70 means you’re drawing down RRSP/RRIF assets from 65–70. This can be a tax-efficient strategy: withdraw RRSP funds at a lower rate in your early 60s and 70s, while deferring CPP to maximize the guaranteed, inflation-indexed pension.
5. Inflation protection CPP is fully indexed to the CPI. A higher monthly benefit at 70 provides greater inflation protection over a long retirement than a lower benefit taken at 65.
Factors That Favour Taking CPP at 65 (or Earlier)
1. Health concerns or shortened life expectancy If you have a serious health condition or family history of early death, the breakeven age may never be reached. Taking CPP earlier maximizes what you collect in a shorter window.
2. Financial need If you genuinely need the income at 65 or earlier, deferral is not a practical option. Running out of savings to live on while waiting for a higher CPP isn’t a viable strategy.
3. Low-income and GIS eligibility If you rely heavily on the Guaranteed Income Supplement (GIS), higher CPP income at 70 will reduce your GIS dollar for dollar. In some cases, taking a lower CPP earlier and retaining more GIS may produce a better net income outcome. This is a complex interaction — model it with a financial planner.
4. Survivor benefit considerations If you die first, your surviving spouse receives the lesser of: 60% of your CPP (if they are 65+), or the CPP maximum minus their own CPP (if they are already collecting). A higher CPP at 70 means a larger survivor benefit for your spouse — which favours deferral if protecting a lower-income spouse is a priority.
CPP + OAS Deferral: Compounding the Benefit
OAS can also be deferred past 65, increasing by 0.6% per month (7.2% per year), for a maximum of 36% more at age 70.
Deferring both CPP and OAS to 70 provides the most guaranteed, inflation-protected income for a long retirement — at the cost of drawing down other savings from 65 to 70.
| Combined Deferral Strategy | Monthly Income at 70 (Illustrative) |
|---|---|
| CPP at 65 + OAS at 65 | ~$2,265 |
| CPP at 70 + OAS at 65 | ~$2,953 |
| CPP at 65 + OAS at 70 | ~$2,812 |
| CPP at 70 + OAS at 70 | ~$3,500 |
How to Apply
Apply for CPP through My Service Canada Account. Apply 6 months before you want payments to start — there is no retroactive CPP payment for delays past your chosen start date (unlike OAS, which can be retroactive up to 12 months).