CPP at 70 — Makes Cents and Sense… but CPP at 60? Everyone Seems to Be Doing It.

Choosing between taking CPP at 60 or waiting until 70 can be daunting. While deferring is often the best "math" move, the reality of human emotion often tells a different story.

I came across a Kitces blog post about deferring Social Security income to 70, and how it's the best long-term investment that money can buy. Akin to Social Security is our Canada Pension Plan (CPP).

Most planners will advise deferral to age 70 for obvious reasons — but even with the best advice, most people don't wait.

The benefits of delaying CPP

Waiting until you're 70 makes a lot of CENTS (dollars and cents) and SENSE (logic).

• Higher monthly payments: If your estimated CPP is $1,000 at 65, it rises to approximately $1,420 by waiting until 70. That's a guaranteed 8.2% annual increase for each year you defer past 65.
• Longevity protection: If you expect to live a long life, delaying CPP acts as insurance against outliving your money.
• Tax efficiency: Delaying CPP allows you to withdraw from tax-deferred accounts (like RRSPs) during lower-income years, preserving your portfolio longer.

The benefits of taking CPP early

There are valid reasons to take CPP at 60, even with the 36% permanent reduction:

• Financial hardship: For those without external resources, the income is a necessity.
• Shorter life expectancy: If health challenges are present, collecting early ensures you benefit from the system while you can.
• Psychological comfort: For many, "a bird in the hand is worth two in the bush."

What's really going on? (Real-life stories)

Why do affluent clients often ignore the math?

• The "enjoy it now" approach: One client with a healthy nest egg took it at 60 simply because "tomorrow isn't guaranteed." To her, the extra few hundred dollars a month for dinners now was worth more than a larger cheque at 85.
• The legacy play: Some prefer to spend their CPP (which has a meagre $2,500 death benefit) and preserve their investment portfolios to pass on to heirs.
• The survivor-benefit trap: If a high-earner passes away, the enhancement to a surviving spouse's CPP benefit is capped. If the survivor already receives a maximum benefit, the deceased spouse's deferral efforts may go to waste.

Who really needs to listen to "defer to 70"?

For lower-income earners with modest savings, deferring CPP can increase the likelihood of meeting basic lifestyle needs by over 50%.

However, this creates a "scarcity gap" between ages 65 and 70. If these individuals don't have enough savings to bridge that five-year gap, they may face excessive stress or be forced to incur debt — even if the long-term math says they should wait.

Final takeaways

• We are all individual humans: What works for one person doesn't work for all.
• Emotion trumps logic: Especially as we age and the years feel shorter.
• Planning is a verb: A financial plan isn't a stagnant document; it must evolve as your values change.
• Math isn't everything: If it were, we'd all be replaced by AI. Understanding personal values is where the real planning happens.

Want to run the numbers yourself? Try a CPP early-vs-late calculator. Ready for values-based planning? Talk to a planner at Modern Cents.