Readers ask about taking CPP at 60 and investing it - and what returns are needed to do better than waiting until 65
. Get exclusive investment industry news and insights, the week’s top headlines, and what you and your clients need to know. For more from Globe Advisor, visit our, in which Globe Advisor explores the decisions behind when to take CPP benefits and reviews different aspects of the beloved and often-debated government-sponsored pension plan.
Let’s assume your CPP at 65 would be $1,000 a month and your CPP at 60 would be $640 a month, which is 36 per cent lower for starting five years early. If you take the CPP starting at 60, there would be $38,400 in CPP payments made between 60 and 65. However, if you take the CPP starting at 65, these monthly payments are $360 more.
That the zero-earning years being added between 60 and 65 will not be a drag on your CPP benefit; this only applies to someone who has made a maximum contribution over 39 years.It doesn’t consider Guaranteed Income Supplement clawbacks after the age of 65 for lower- and moderate-income retirees. GIS clawbacks are triggered by CPP benefits and other taxable income, so a higher CPP benefit after 65 may not be as attractive.
Assuming higher real investment returns of 4 per cent , the break-even point happens later, at 77 and five months.
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