Personal Finance

Starting your CPP in 2013 versus 2014

  • Last Updated:
  • Nov 25th, 2013 4:12 pm
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Dec 12, 2012
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Starting your CPP in 2013 versus 2014

If you're between age 60 and 65 now, and you're thinking of starting your CPP early in 2014, you may want to consider applying immediately for a December 2013 start date instead. That's because the reduction factor for starting your CPP earlier than age 65 increases to 0.56%/mth in 2014, from 0.54%/mth in 2013.

Using the most extreme example, if your 60th birthday was in Nov 2013 your retirement pension would be reduced by 32.4% (60 x 0.54%) if you start receiving it in December, but it will be reduced by 33.04% (59 x 0.56%) if you start receiving it in January. That means that if you wait until January 2014,you have passed up on a December payment of 67.6% plus your ongoing payment will be approx. 0.64% less monthly.

There is a slight advantage to waiting for 2014, in that the general dropout increases from 16% to 17%. It is highly doubtful however, that this extra dropout period will make up for passing up on the December payment, plus the greater % decrease in benefit in 2014.

If this applies to you, your application must be received by Service Canada on or before Nov 30th in order to request a December 2013 start date.