The CPP Retirement Pension is an important part of Canada’s system to help people with money when they stop working. It started in 1966 and works like insurance, where both workers and their bosses put money into it. The main goal is to make sure Canadians have enough money for a secure retirement, especially if they get sick or pass away. The government, along with provinces and territories, manages the CPP to take care of people’s financial well-being at different stages of their lives.
Knowing about the benefits you could get from the CPP Retirement Pension is really important when you’re planning your money for the future. Things like who can get it, how much you’ve contributed, and when you decide to start getting the money all affect how much pension you’ll get each month. If you understand these things, you can make smart choices that fit your own situation. It gives you the power to decide when to start getting your pension, how to get the most out of it, and plan well for your money needs in retirement. This knowledge is like a key to having a stable and secure financial future after you stop working.
CPP Retirement Pension 2024
The CPP Retirement Pension is like a strong base for many Canadians’ money safety during their retirement. It gives you a regular monthly income to support the lifestyle you want when you’re not working anymore. Here’s a simple look at how it works:
Who Gets It and How Much: If you’ve been putting money into the CPP while working, you automatically qualify for the retirement pension when you turn 65. The amount of money you get each month depends on the average amount you earned during your best 40 working years. The longer you’ve been paying into it and the more money you made, the bigger your pension will be. You can start getting this money as early as 60, but the amount will be less. Or, you can wait until you’re 70 for a bigger monthly payment.
Choosing Smartly: Deciding when to start getting your CPP is a big decision. Think about how much money you need, your health, and other ways you get money. If you really need the money right away, starting at 60 might be the right choice. But if you can wait, starting after 65 means you’ll get more money every month. Look at what you expect to spend in the future and all the ways you’ll get money, and think about things like prices going up. This will help you make the best decision about your CPP.
Remember, the CPP is just one part of your money plan for retirement. You can mix it with other money sources like pensions, savings, and investments to make sure you have a comfy and safe future. Don’t be afraid to ask for help from a money expert to create a plan that fits you and keeps your money safe in retirement.
Are you eligible?
To get a Canada Pension Plan (CPP) retirement pension, you need to:
- Be at least 60 years old.
- Have made at least one valid contribution to the CPP.
- Valid contributions can come from work you did in Canada or from credits received after the end of a relationship with a former spouse or common-law partner.
Working while on CPP retirement pension: If you’re getting a CPP retirement pension, you can still work without reducing the pension amount. In fact, you might increase it with the CPP post-retirement benefit.
If you work while getting your CPP retirement pension and are under 70, you can continue making CPP contributions. Each year you contribute will result in a post-retirement benefit, boosting your retirement income. This benefit is automatically paid the following year and lasts for your lifetime.
You can choose to stop post-retirement contributions at 65, and your CPP contributions will automatically stop at age 70, even if you’re still working.
Special circumstances:
If you lived and worked in Quebec: The CPP and Québec Pension Plan (QPP) collaborate to ensure all contributors receive a retirement pension. Contact Retraite Québec if:
- You’ve only worked in Quebec.
- You worked in Quebec and at least one other province/territory, and currently live in Quebec.
- You worked in Quebec, currently reside outside Canada, and your last province of residence was Quebec.
When to Get Your Retirement Pension
You can begin getting your pension at the age of 65, which is the standard age. However, you have the option to start as early as 60 or delay it until you’re 70.
Starting earlier means you’ll receive a smaller monthly amount, while starting later results in a larger monthly payment. Waiting beyond 70 doesn’t increase your pension; the maximum monthly amount is reached at 70.
Retroactive Payments
If you apply after turning 65, you can receive retroactive payments for up to 12 months (11 months plus the application month). The chosen start date impacts your monthly payment. No retroactive payments are available for a CPP retirement pension taken before 65.
Considerations for Starting CPP
Age influences your pension amount:
- Starting before 65 leads to a 0.6% monthly decrease, up to a 36% maximum reduction if you start at 60.
- Starting after 65 results in a 0.7% monthly increase, up to a 42% maximum increase if you start at 70 or later.
Personal Factors to Consider
Various factors impact the decision of when to start your CPP retirement pension, including health, financial situation, and retirement plans.
For instance, if you anticipate a long, healthy life or have other income sources, delaying CPP may yield a larger monthly pension, enhancing long-term financial security.
On the other hand, if you want immediate funds for debt payments or early retirement plans, starting before 65 provides a smaller but more immediate monthly payment.
The Canadian Retirement Income Calculator can assist in understanding your future financial security better.
How Much You Could Receive
How much money you get from your CPP retirement pension depends on a few things:
- When You Start: The age you decide to begin getting your pension matters.
- Your Contributions: The amount and duration you paid into the CPP influence your pension.
- Your Earnings: How much money you made on average during your working years plays a role.
In 2024, if you start your pension at age 65, the most you could get each month is $1,364.60. But everyone’s situation is different, and you might get less. In October 2023, the average monthly pension for new retirees at age 65 was $758.32.
You can find out how much you might get by checking your My Service Canada Account. If you don’t have one, you can sign up, and we’ll give you a code to finish registering.
The Canadian Retirement Income Calculator is another tool that can help you see how secure your money might be in the future.
Factors That Might Impact Your Pension Amount
We look at some extra stuff when figuring out your CPP retirement pension, but only if you told us everything we need in your application.
Working While Getting CPP Retirement Pension:
If you work and keep paying into CPP while getting your pension and you’re under 70, you can qualify for a post-retirement benefit. This extra benefit boosts your retirement income, and you get it every year for life. You can stop paying into this when you’re 65 or by 70, even if you’re still working.
Contributions After 65:
If you’re working after 65 and not getting your CPP pension yet, we might add those earnings to increase your pension, but we only do this if it helps.
Periods of Low Earnings, Raising Children, or Disability:
If you had low earnings for some years, raised kids, or had a disability, we do some special things:
- Low Earnings: We ignore up to 8 years of your lowest earnings, which makes your pension more.
- Raising Children: Taking time off for kids might increase your pension, and you might get other benefits too.
- Disability: If you got a CPP disability pension, we tweak your calculations. You get credits for the time you were disabled, making sure you don’t lose money when you switch to a retirement pension.
Pension Sharing, Divorce, or Separation:
You can share your pension with your spouse to lower taxes in retirement. If you split up, you can divide CPP contributions with your ex equally.
How To Apply
Ready to begin collecting your deserved CPP retirement pension? The application process is simple! Let’s break down the essential steps:
Step 1: Check if You Qualify
To qualify for your Canada Pension Plan (CPP) retirement pension:
- You must be at least 60 years old.
- You should have made at least one valid contribution to the CPP. Valid contributions can be from work in Canada or credits from a former spouse or common-law partner after the relationship ends. If you’re in Quebec and contributed to both CPP and QPP, apply to the QPP for your retirement pension.
Step 2: Choose When Your Pension Starts
Decide when you want to start receiving your pension:
- As soon as you qualify
- At age 65 (starting the month after your 65th birthday)
- On a specific date of your choosing
Understand the best time for you to start receiving your pension.
Step 3: Decide How to Apply
Apply Online:
- Use My Service Canada Account (MSCA).
- If you don’t have MSCA, register and get a personal access code.
- Through MSCA, see an estimate of what you’ll receive.
- After submitting, you’ll be immediately notified about your application status.
Apply using a Paper Application:
- Download the application form.
- Apply well in advance to ensure you receive your pension by your chosen date.
Note: Use a paper application if you had a previous CPP disability benefit, received a CPP children’s benefit, are under 18, are a CPP survivor through an International Social Security Agreement, live outside Canada, or have an authorized third party managing your CPP account.
How Long Does It Take?
We process your application when we get your completed form. You should get a decision notice by mail within 120 days.
If Service Canada lacks complete information, it may take longer.
Step 4: Submit Your Application Submit Online
Submit a Paper Application Complete the Application for a Canada Pension Plan Retirement Pension (ISP-1000) form and mail it or drop it off at a Service Canada office.
Step 5: Check Your Application Status
Use your MSCA and select “Application Status” to view your application status.
Contact Service Canada for updates.
Note: Fines can apply for false information. Correct any mistakes or give important info not shared earlier to avoid penalties and interest. Learn about Penalties, Interest, and Disclosure Policy.
CPP Retirement Pension: What Happens After Applying
Once you begin receiving your CPP retirement pension, you’ll get payments every month for the rest of your life. Each January, your monthly payment might increase if the cost of living rises, as measured by the Consumer Price Index. Importantly, your payment won’t decrease if the cost of living goes down.
Payments: Your payment will be deposited directly into your bank account monthly. If you didn’t choose direct deposit, a cheque will be mailed during the last three business days of each month.
Taxes: Your CPP retirement pension is considered income and is taxable. Taxes aren’t automatically deducted. You can request federal income tax deductions from your monthly payments by signing into your My Service Canada Account or completing the Request for Voluntary Federal Income Tax Deductions CPP/OAS (ISP3520CPP) form.
If you live outside Canada, you’ll receive a T4 or NR4 tax slip early each year, showing the amount you received the previous year. T4 slips are for residents of Canada, while NR4 slips are for those living outside the country. You can access and print these tax slips online through My Service Canada Account or the Canada Revenue Agency services.
Disagreement with Decision: If you disagree with the decision, you can request a review within 90 days of receiving your decision letter. Submit your request online, using a printable form, or in writing. Reconsiderations may take several months, and the decision will be mailed to you.
Appeal to Social Security Tribunal: If you disagree with the new decision after the reconsideration, you can appeal to the Social Security Tribunal. Start the appeal through the Social Security Tribunal website or My Service Canada Account.
Help with Tribunal Communication: If you need help communicating with the Social Security Tribunal, you can complete a form or call a representative. Make direct contact with the Social Security Tribunal to change or cancel your representative.
Stop receiving your CPP retirement pension after you’ve already begun
You have the option to stop your CPP retirement pension within 12 months after you begin receiving it. To do this, you need to submit a written request and repay the entire CPP income you’ve received. To initiate the cancellation, get in touch with Service Canada.
Cancel CPP Retirement Pension After a Death
If you’re reading this due to the passing of a loved one, we extend our condolences. In the event of a death, please notify us promptly to prevent any overpayment. Learn the process for canceling CPP benefits for a deceased individual.
The estate and survivors might qualify for additional CPP benefits, including the death benefit and survivor’s pension.
CPP Retirement Pension and Additional Benefits
Apart from the CPP retirement pension, you may be eligible for other CPP benefits. Here are some key benefits:
- CPP Post-retirement Benefit:
- Qualification: You qualify for this benefit if you work while receiving your CPP retirement pension under age 70 and choose to continue contributions.
- Contribution Impact: Contributions increase post-retirement benefits, enhancing your retirement income.
- Automatic Payment: Additional benefits are automatically paid the year after each contribution, lasting for your lifetime.
- Option to Stop Contributions: You can choose to halt post-retirement contributions at age 65, even if you continue working.
- CPP Disability Pension:
- Ineligibility with Retirement Pension: You cannot receive both CPP disability and retirement pensions simultaneously.
- Automatic Conversion: CPP disability pension transitions to a CPP retirement pension at age 65.
- CPP Post-retirement Disability Benefit:
- Eligibility: If under 65, receiving CPP retirement pension, and facing a severe and prolonged disability, you may qualify.
- Application Required: You need to apply for this additional benefit, which is added to your monthly CPP retirement pension until age 65.
- Children’s Benefit:
- Monthly Benefit: Available for dependent children (under 18 or between 18 and 25 attending school full-time) of CPP disability benefit recipients.
- CPP Survivor’s Pension:
- Combination of Pensions: If you receive both CPP survivor’s and retirement pensions, they are combined following specific rules, not necessarily equaling their sum.
- Application Needed: You must apply for this combined pension benefit.
- Children’s Benefit (After Death):
- Monthly Benefit: Provided to dependent children (under 18 or between 18 and 25 attending school full-time) of deceased CPP contributors.
- Death Benefit:
- One-time Payment: In the event of a CPP contributor’s death, the Death Benefit offers a single payment to the estate or on behalf of the deceased.
Understanding these additional benefits and their application processes is crucial to maximizing your CPP entitlements.
FAQ
How is the CPP Retirement Pension calculated?
The CPP Retirement Pension is calculated based on factors such as your contribution history, average earnings, and the age at which you choose to start receiving benefits.
When can I start receiving my CPP Retirement Pension?
You can start receiving your CPP as early as 60 or delay it until as late as 70. The age you choose will impact the monthly amount you receive.
What is the impact of starting my CPP before 65?
Starting your CPP before 65 results in a permanent reduction of 0.6% for each month before 65. Your benefit will be 30% lower if you start at 60.
When is the standard age to receive the full CPP amount?
The standard age to receive the full, unreduced CPP benefit is 65. This is the default option if you don’t choose an earlier or later start date.
Can I change my mind about when to start receiving CPP?
Yes, within six months of your initially selected date. After six months, changes take effect in the following calendar year.