## Who can explain this CPP calculation?

Following is a question that someone asked on another forum, along with my reply. Is there anybody out there who can explain what situation would make my answer exactly correct and what situation might make it a little wrong. For bonus points and ignoring the enhanced CPP changes, who can tell me how far away from the truth my answer could be. If nobody can provide the correct explanations within 30 days, I'll explain it further then.

I've been working on my (early) retirement plans. I refer to it as "stop working" rather than retiring because I might still work here or there, doing something I enjoy. When I go see what sort of CPP I will qualify for, their website shows my work history and contributions. I'm 45, have been contributing since I was 18 with maximum contributions since 2002. For the estimated amounts, does this # assume I continue contributing the maximum amount until I hit the ages shown below? I have to assume so but they don't make it clear in their website. These are the numbers it's giving me:

at 60, you could receive $704.76 per month

at 65, you could receive $1,101.19 per month

at 70, you could receive $1,563.69 per month

How do I figure out what my CPP is worth if I stop working at an age earlier than 60? I realize 60 is the earliest I can collect it, and that delaying collecting it increases how much I will get each month.

I'm working on establishing what sort of income I will have at various ages of retirement so having a formula to calculate different age scenarios would extremely useful.

I found the retirement income calculator on the GOC website but it gives me the same results as the ones I posted above. I hope to stop working by the time I'm 50 but that's flexible. If I did continue to work it would consulting/contract work that likely wouldn't involve CPP contributions or it would be part time at some sort of low wage job so it likely wouldn't impact my CPP that much.

Thanks for any help you can share!

Ignoring the enhanced CPP changes, the closest thing to the truth is that for your CPP to remain at $1,101.19 (in 2021 dollars) when you turn age 65, you would have to have average earnings at 91.5% of the YMPE for 16.6 years out of the next 20 years. If you can figure out why that is true, you should be able to play with lots of different scenarios.

**Original question:**I've been working on my (early) retirement plans. I refer to it as "stop working" rather than retiring because I might still work here or there, doing something I enjoy. When I go see what sort of CPP I will qualify for, their website shows my work history and contributions. I'm 45, have been contributing since I was 18 with maximum contributions since 2002. For the estimated amounts, does this # assume I continue contributing the maximum amount until I hit the ages shown below? I have to assume so but they don't make it clear in their website. These are the numbers it's giving me:

at 60, you could receive $704.76 per month

at 65, you could receive $1,101.19 per month

at 70, you could receive $1,563.69 per month

How do I figure out what my CPP is worth if I stop working at an age earlier than 60? I realize 60 is the earliest I can collect it, and that delaying collecting it increases how much I will get each month.

I'm working on establishing what sort of income I will have at various ages of retirement so having a formula to calculate different age scenarios would extremely useful.

I found the retirement income calculator on the GOC website but it gives me the same results as the ones I posted above. I hope to stop working by the time I'm 50 but that's flexible. If I did continue to work it would consulting/contract work that likely wouldn't involve CPP contributions or it would be part time at some sort of low wage job so it likely wouldn't impact my CPP that much.

Thanks for any help you can share!

**My reply**Ignoring the enhanced CPP changes, the closest thing to the truth is that for your CPP to remain at $1,101.19 (in 2021 dollars) when you turn age 65, you would have to have average earnings at 91.5% of the YMPE for 16.6 years out of the next 20 years. If you can figure out why that is true, you should be able to play with lots of different scenarios.