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In Canada, citizens can apply for the Canada pension
plan as early as the age of 60. Usually, individuals apply for
the Canada pension plan retirement benefits at the age of 65.
However at the time of applying for your CPP you have the options
to receive the benefits as early as at 65 years of age but with
reduced benefits or on the other hand you also have the option
to elect and receive your benefits as late as at the age of 70
but with an increased amount.
You can with no trouble download Canada pension plan details,
Canada pension plan applications and Canada pension plan forms
from servicecanada.gc.ca. Canada pension plan offers monthly pension
amount to Canadian citizens who have contributed to the Canada
pension plan during their employment period. As of 2010, the maximum
monthly pension amount is fixed to be $934.17. In order to
receive the pension amount upon reaching the specified age, an
individual should fill out the Canada pension plan application
which can easily be obtained online.
An individual who is undergoing the retirement process and who
is in the process of completing the Canada pension plan application
should also make an evaluation of his or her other sources of
retirement income. Similarly, the individual should also check
his or her investment holdings when he or she is about to retire
or has recently already retired. Organizing a proper investment
plan in this situation is very crucial as well. Individuals with
RRSPs need to start planning for income from these plans and individuals
need to familiarize themselves with registered retirement income
funds (RRIFs).
The investment options should be more safe and secure and the
investments which provide a smooth cash flow may be necessary.
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If you are an investor in Canada who does not want to get involved
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for additional information.
How can I become eligible to receive Canada
pension plan retirement benefits when I am between the ages of
60 to 64 years?
According the rule, you must fulfill one of the
following two requirements in order to be eligible to receive
the pension amount if you are between the ages of 60 to 64 years:
- Stop working and receive
no earnings
This means that you should not be working and earning
anything, since one month before the initiation of the pension
and during the month in which the pension begins as well.
For example, if you want your pension
to begin in the month of April, then you should have quit working
in the month of March and should not have obviously worked in
April as well.
OR
- Earn less than the specified
amount
This means that in the month preceding the month
of the beginning of pension, and in the month of the beginning
of pension, you earn at most an amount which should be less than
the maximum amount of CPP retirement pension payment, i.e. $934.17
( according to the rates set 2010).
For example, if you want your pension to start in April, then
you should have earned an amount less than $934.17 in March and
April. It is important to note here, that once the receiving of
a pension has started, you can again work as much as you want
without the pension amount being affected, however, you would
not be able to contribute to the CPP on any future earnings from
this employment.
How is my CPP pension amount calculated?
For calculating the amount of your monthly pension,
it necessary to take into account what amount of income have you
contributed to the CPP, and since how long have you been contributing
to the CPP, or to both, the CPP and the Quebec Pension plan (QPP).
The age of the individual when he or she prefers to retire also
plays a significant role in this regard.
The CPP protects your pension by making certain
adjustments before calculating 25% of the earnings you contributed
over your working life. For example, some low-earning periods
during your career may be "dropped out," so they do
not reduce the amount of your pension.
Every year, the CPP retirement pension is indexed
to the Consumer Price Index. The average monthly retirement
pension (at age 65) in January 2010 was $502.57.
How does my age affect the amount
of my pension?
Typically, the CPP retirement pension starts the
month after the 65 birthday of the individual. However, it is
also possible for you to start receiving the pension anytime after
the age of 60 years. If you decide to receive the pension amount
before the age of 65 years, then the pension amount would be less
than the amount when you receive the pension at the age of 65
years. The CPP offers great flexibility regarding the age of retirement
which you choose. At the earliest, you can be eligible to receive
the pension amount at the age of 60 years, or you can wait till
you turn 65 years and receive a higher amount of pension.
- If you start receiving the
pension amount between the ages of 60 to 65 years: before
the age of 65 years, the CPP reduces the pension amount by
0.5 percent for each month. Calculated from the time you begin
receiving your pension. The maximum reduction is 30 percent,
which applies if you start receiving your CPP pension on your
60th birthday. This adjustment is permanent–if you choose
to start your pension before age 65, your reduced pension
amount does not increase when you reach 65.
- If you start receiving the
pension amount at the age of 65 years: You will get
the full pension amount you are eligible to receive.
- If you start receiving the
pension amount between the ages of 65 and 70 years: The
CPP increases your pension amount by 0.5 percent for each
month after age 65 and before age 70, calculated
from the time you begin receiving your pension. The maximum
increase is 30 percent, which applies if you start receiving
your CPP pension at age 70.
- If you start receiving the
pension amount after the age of 70: If you delay
starting your pension until after you turn 70, you will only
receive the pension amount you would have received at age 70.
There is no financial benefit in delaying receiving your pension
after the age of 70.
How do I decide when to take my retirement
pension?
The decision is totally yours and depends on the
conditions and situations in which you live. We would recommend
you to consider the following points:
- If you are still earning an income
and contributing to the CPP
- The time period since when have
you been contributing to the CPP
- The amount which you have contributed
and the pension amount which are anticipating to receive
- Any other retirement income you
have
- Your health conditions
- Your overall retirement plans
What happens if you don't work after the
age of 60 and delay receiving your pension until you turn
65?
After the age of 60 years, if you don’t work then
these five years of no earnings will lower the amount of CPP retirement
pension payable at age 65 years, since this is the period
when you should be contributing to the CPP till you start receiving
the monthly pension. This is the reason you should carefully consider
your personal situation when deciding when to start your CPP retirement
pension.
Can I get an estimate of my retirement
pension before I decide to apply?
Yes. For an estimate of your CPP retirement pension,
check your CPP Statement of Contributions, or contact
us.
The closer you are to the date you want your pension to begin,
the more accurate the estimate will be.
When should I apply?
We would recommend you to go through the Canada
pension plan applications at least six months previous to when
you want the pension amount to start receiving. It is important
to mention here that there are governmental restrictions on retroactive
payments. Even a slight delay in going through the Canada pension
plan applications can result in loss of benefits. For further
details in this regard, feel free to contact us.
How do I apply?
You would be required to fill the Canada pension
plan applications in order to apply for the pension amount. You
can easily obtain the Canada pension plan application online through
servicecanada.gc.ca.
Did you have children after 1958?
If your earning had stopped, or went short anytime
just because we were raising your children, under the age of seven,
we can assist you in getting that period of time excluded from
the calculation of your retirement pension. This facility is known
as the child-rearing provision. This provision ensures that those
years when you did not earn enough money since you were raising
your children, are not included in the calculation and this enables
you to receive the highest possible pension amount. If you are
interested to know more about this provision, kindly contact us.
What happens if a CPP contributor dies before
applying for a retirement pension?
If a CPP contributor dies before applying for the
retirement pension, then the amount of the pension cannot be paid
to anyone else, unless the deceased was more than 70 years of
age and the Canada pension plan application is submitted within
one year of the death.
In this situation, retirement pension of up to 12 months could
possibly be paid. Moreover, the spouse or the common law partner
of the decease contributor might also be eligible for a CPP survivor’s
pension. To know more about the CPP survivor’s pension, kindly
get in touch with us.
Receiving your retirement pension
When does my pension begin?
From 60 to 65 years of age
Right after the month when you stop working and
earn nothing OR you earn less than the maximum retirement pension
amount, i.e. $934.17 for two successive months.
- Your pension would start on the
month after your 60th birthday if you fill the Canada pension
plan application to receive the pension when you turn 60.
- Your pension would start on the
month after the Canada pension plan application is received
if to fill the Canada pension plan application to receive
the pension after you turn 60 but before you turn 65 years
of age.
From 65 years of age onwards
You would be eligible to receive your retirement
pension from the month after your 65th birthday. If you specify,
the initiation of the pension can be possible after a later date
as well. You can also prefer to have your pension paid back to
a maximum of 11 months from the date when the Canada pension plan
application is received, however, not earlier than the month after
your 65th birthday.
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