Canada Pension Plan (CPP)
You are eligible to begin receiving your Canada Pension Plan (CPP) as early as age 60. The base CPP payment is different for everyone because it's based upon how many years you've worked, how much you've contributed each year plus many other factors. To determine your amount, go to the Government of Canada website, login and on their main page select the row entitled "Estimated monthly CPP benefits". An example is shown to the right.
Once you know your base amount, your next decision is to decide when to start CPP. For every month you defer the start, the initial pension increases as follows.
Between age 60 to age 65: For each month you defer starting, you receive an additional 0.6% which works out to a 7.2% annual increase,
Between age 65 and age 70: For each month you defer starting, you receive an additional 0.7% per month which works out to an 8.4% annual increase.
Please note that once you begin to receive CPP, it increases quarterly based upon the increase in the Consumer Price Index (CPI).
It's important to consider when to start your CPP as it's fully taxable. This means that if you are still working, it's added to you gross income and you'll likely be paying a higher percentage in taxes.
Old Age Security (OAS)
If you haven't started CPP or OAS yet, I think there are two key takeaways.
1) Find out what your estimated CPP payment is projected to be.
2) Find out what your estimated OAS payment is projected to be.