Every financial planner has been there.
You’re sitting across from a perfectly healthy 64-year-old who has more than enough saved, no debt, a paid-off home, a reasonable spending plan, and a strong likelihood of living well into their 80s or 90s. They have zero financial need to turn on CPP today.
And yet, as predictably as sunrise, they say, “I’m just going to start CPP at 65. Why wait?”
Or sometimes it’s the healthy 60-year-old who retired a bit early: “I can take CPP now, right? I’ve paid into it my whole life and I want to start getting something back.”
This is one of the most consistent behavioural puzzles in retirement. More than 90 percent of Canadians claim CPP at 65 or earlier, and fewer than 5 percent delay to age 70. All this despite the fact that delaying from 60 to 70 increases CPP benefits by 122 percent for life. Indexed, guaranteed, for as long as you live.
Bonnie-Jeanne MacDonald from the National Institute on Ageing has shown repeatedly that the average Canadian who claims CPP at 60 instead of 70 leaves more than $100,000 of secure, inflation-protected income on the table.
She calls delaying CPP the best retirement deal in Canada. And yet most people walk right past it.
Let’s unpack why.
The Boring but Important Math
CPP can start anytime between ages 60 and 70.
Start early and you get hit with a reduction of 0.6 percent per month before 65. That’s a permanent 36 percent cut at age 60.
Start late and you get a boost of 0.7 percent per month after 65. That’s a permanent 42 percent increase at age 70.
Those two adjustments together create the 122 percent difference between a pension taken at 60 and the same pension taken at 70.
All of this is indexed to inflation.
Add in the fact that a healthy 65-year-old in Canada today can expect roughly 20 more years of life, and delaying looks less like a gamble and more like prudent insurance. The real financial risk for most Canadians isn’t dying early. It’s living a long time without enough guaranteed income.
When Taking CPP Early Does Make Sense
There are absolutely cases where starting CPP early is rational.
Serious health concerns
Strong family history of dying young
No savings and a need to cover essential spending
High-interest debt that needs to be eliminated
Complex survivor income situations
This article is not about those cases.
This is about the many Canadians who absolutely can delay CPP, with almost no trade-offs, but simply don’t.
The Maddening Middle: People Who Could Delay, But Won’t
These are the regular Canadians I see all the time. They are healthy, financially secure, carry no debt, and have more than enough invested to support their spending in their 60s. Their retirement plans work beautifully without CPP. They could delay to 70 with confidence.
And yet they do not.
Here are the five most common objections I hear, and the responses that actually move people.
“I want my money back.”
This is the ownership instinct. They see CPP as a personal account they paid into, not as a pension.
What I say:
CPP is not a bank account. It is insurance against outliving your savings. Delaying CPP is equivalent to increasing the value of that insurance policy dramatically and permanently. If you are healthy, the value of delaying is far higher than the value of grabbing small cheques early. The math is not even close.
“What if I die early”
This is always rooted in fear. Maybe a parent died young. Maybe someone close to them never saw retirement.
What I say:
If someone had a serious diagnosis or a genuine reason to expect a shortened life, I would encourage them to take CPP early. But for a healthy 60- or 65-year-old in Canada today, the statistics heavily favour living a long time. The true financial danger is not dying young. It is living into your 80s or 90s without enough guaranteed income.
There is no financial tragedy in dying at 72 with money left over. But living to 92 and running short is a real risk.
“The government will probably change the rules”
This is one of the most common anxieties and one of the least grounded in reality.
What I say:
CPP is jointly governed by the federal government and the provinces. It cannot be changed on a whim. Every reform in the last 25 years has been gradual and aimed at strengthening the plan, not weakening it.
And if someone genuinely fears future cuts, that actually strengthens the argument for delaying. Governments want people to delay. Weakening that incentive would undermine the system.
“I’ll take CPP at 60 and invest it myself”
This usually comes from confident DIY investors.
What I say:
Delaying CPP is equivalent to earning a guaranteed 8.4 percent return each year from 65 to 70, plus inflation. There is no way to match that in a real-world portfolio without taking on substantial risk (and for markets to cooperate). And those risks get magnified if markets decline early in retirement.
Earning 8 to 10 percent per year after fees and taxes, for five straight years, without volatility or sequence risk, is extremely difficult even for skilled investors. CPP is offering a risk-free version of that.
“I like having all my income taps turned on”
This is more common than you’d think. People like the psychological comfort of multiple income streams flowing in at once.
What I say:
Think of CPP as your late-life raise. Your own portfolio can easily cover your early retirement years while you leave CPP in the oven to bake a while longer.
At age 70, a much larger, inflation-protected benefit kicks in at exactly the stage of life when cognitive ability starts to decline and you crave simplicity and automation. A larger, guaranteed, paid-for-life CPP payment landing in your chequing account every month sounds like a win.
And if psychological comfort is the goal, we can always carve out a cash wedge to support spending in your 60s while CPP keeps growing.
A Simple Rule of Thumb
If you are in decent health, have enough savings to support your 60s, and your retirement plan works with a starting withdrawal rate of around 4 to 5 percent while you wait, delaying CPP to 70 is usually the better option.
This is not about winning a break-even spreadsheet comparison. It is about giving your future self a larger, safer, inflation-indexed pension at the very time of life when guaranteed income matters most.
Delaying CPP remains the simplest, highest-value, least risky way to strengthen a Canadian’s retirement income.
And it still amazes me how few people take advantage of it.
