We could have an endless discussion about whether it’s better to take CPP early at age 60, wait until 65, or delay until 70.
Everyone’s situation is different and there is no right answer.
But there are good reasons and bad reasons to take CPP early.
There are also good and bad reasons to delay taking CPP past 65.
Today we’re going to focus on the benefits of taking CPP early at Age 60.
1. Everyone Needs to Pay the Bills
If taking the CPP benefit today would make a big impact in your life then you should considering taking the benefit.
Technically you will receive more monthly income if you delay your CPP to age 65 or 70 but that doesn’t take into account the emotional benefit that taking away financial stress could have.
2. You can enjoy the money while your health is good
While more money is usually better than less money, you also need to account for your health at the time you receive the funds.
If you delayed CPP until 70 you’ll be receiving more money each month. But if you have health complications at 75 you may not be able to enjoy the money. Rather it just piles up in your account each month.
On the flipside if you’re in good health at 60 you’ll likely be able to use the income from CPP for longer, and in a meaningful way.
Whether that’s for travel, spending more time with grand kids, or having more dinners out because of the extra funds.
I think we all can agree that having the money at 60 is better than having it at 70.
3. The Retirement “Smile”
Research shows that retirees actually spend less money than they expect when they retire.
So you may not actually need as much money to retire as you think.
And having that extra money at ages 70 – 75 when you’re receiving the benefit of the extra funds, comes at a time when your expenses are at a low point.
Whereas in your 60s you’re still actively spending the money. Making at a good time to have the extra income from CPP coming in.
4. Low Life Expectancy
This is a strange one to think about. But if your family has a history of bad genes with parents and grandparents passing away in their 70s it’s worth looking into early CPP.
This is because of a thing called the “CPP Break Even Point” which is a calculation that determines at what age would you have received more money taking CPP at different ages.
Delaying CPP to 65
For example, here’s a comparison of taking CPP at age 60 vs. age 65
This shows that if you wait to take CPP at age 65 vs. taking CPP at age 60 you’ll have to live to 75 to get more financial benefit from that decision to delay.
Delaying CPP to 70
If you delay CPP until 70, you’ll have to live to 79 to see the benefit compared to taking CPP at 60
Summary
Whether or not you take CPP early at age 60 is not a black and white decision.
It’s dependent on a number of factors and is different for every person considering the decision.
The best you can hope for is weighing out the odds and making a decision that best serves for financial needs and goals.