Normally, you would start your retirement pension the month after you reach 65. However, you can begin the CPP as early as your 60th birthday or as late as your 70th.
The amount of the pension is adjusted by 0.5% for each month that you start to receive your pension either before or after your 65th birthday. It is a permanent adjustment, which means that if you decide to take it before you reach 65, it will not be adjusted when you reach 65.
Here are some examples. If you commence your pension at age 60, your monthly payment will be 30% (12 months x 0.5% x 5 years) lower than if you wait until age 65. However, by starting sooner, you are more likely to get a pension for a longer period of time. Or if you start your pension at 70, your monthly payment will be 30% higher than it would have been if you had taken it at age 65. However, if you apply for the CPP after age 70, retroactive payments are only payable for a maximum of 12 months.
To qualify for the CPP between 60 and 64, you must do one of the following:
- Have low earnings. Your earnings must be less than the current maximum monthly CPP retirement pension ($934.17 in 2010) in the month prior to the month your pension begins and in the month it begins.
- Stop working. By stopping work, it means that you are not working by the end of the month prior to the month CPP retirement pension begins and also during the month in which it begins.
- Once you receive your Canada Pension Plan pension, you can work as much as you want and it will not affect your CPP payment. Unfortunately, you cannot contribute to the CPP on your future earnings.