When should you start taking CPP — 60, 65 or 70?

You can start the Canada Pension Plan any time between 60 and 70, and the age you pick changes the payment permanently. Take it before 65 and it shrinks by 0.6% for every month you're early — a full 36% cut if you start at 60. Wait past 65 and it grows by 0.7% a month, so starting at 70 pays 42% more than the same pension at 65. That's not a one-year bonus; it's the size of every cheque for the rest of your life, and it's indexed to inflation.

Those percentages make the spread enormous. On a $1,200-a-month pension at 65, starting at 60 pays about $768 while waiting to 70 pays about $1,704 — more than double, for the same contribution history. See the whole curve for your own estimate with the CPP retirement benefit calculator.

The usual objection is the break-even: start early and you collect for more years, so when does waiting actually pay off? Roughly speaking, deferring from 65 to 70 catches up somewhere in your early-to-mid 80s. If you live past that, waiting wins — and the longer you live, the more it wins by. That framing matters because the real risk in retirement isn't dying early, it's outliving your money. A larger inflation-indexed cheque for life is essentially cheap longevity insurance, which is why many planners lean toward deferring when it's affordable.

But the answer genuinely flips for some people. Take it early if you need the income now and the alternative is drawing down savings faster, or if your health or family history points to a shorter-than-average life. Take it later if you're still working at 65, have other income to bridge the gap, and expect a long retirement. Being still employed matters twice over: CPP is taxable income, so claiming it while earning a full salary can push the whole amount through a higher bracket for no good reason.

One more interaction worth checking before you decide. CPP counts as income for the Old Age Security recovery tax, so a bigger CPP cheque can drag more of your OAS into the clawback once your net income passes the threshold — while deferring CPP and drawing on a TFSA instead keeps reported income down. Test that with the OAS clawback calculator, and see how the pieces fit together in the retirement income planner.