Cpp when to collect?

I am a healthy 62 year old who receives a CPP Survivors pension. I have been semi-retired now for about 15 years.

I took my CPP pension early at age 60 based on my accountant’s advice that no one knows when we are going to die.

First thing they did was take away $98.00 from my survivor’s pension because my combined pension, with the 36% early drawing penalty, was over the maximum monthly amount allowed.

Many do not know that Revenue Canada allows you six months to change your mind in regards to taking your pension. However, to stop receiving it you must return any pension amounts received in those months.

Within two months of receiving my pension I had done enough research to realize that getting my CPP at age 60 was not good advice in my case.

I contacted Revenue Canada, stopped my CPP payments, and returned the pension money I received for those two months back to them.

Further research now tells me that continuing to work part-time to age 70 and deferring both CPP & OAS benefits are probably my best options as I have no savings, no investments and will only have $375.00 income per month in a company pension plan when I do retire.

I like the idea of an every “Six months review period” to re-run the numbers in the event that my circumstances change.

But life expectancy is probably the biggest factor that impacts the CPP timing decision. My mother was in good health in her early 60s and I encouraged her to defer the start of her pension for this and other reasons. Unfortunately, she developed a terminal illness and died when she was 66. She began her CPP once we knew she was sick. One of her fears, like many others, was running out of money. If you die young, you may be less likely to run out. Those who live to age 100 are arguably more at risk and CPP deferral protects against this risk.

If we knew how long we would live, it would help with decisions such as when to start CPP, as well as other financial and non-financial choices. My best advice to those considering a CPP application is the same advice that I gave to my own mother: consider all the factors and make a personal decision on that basis. If circumstances change, so can your timing decision.

Jason Heath is a fee-only, advice-only certified financial planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

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When should I apply for CPP benefits? The standard age to start CPP is 65. You can start receiving as early as age 60 or as late as age 70. You should apply in advance of when you want your pension to start.