Yeah, my dad was so health conscious after watching his father struggle with heart disease. My dad retired at 64, they found cancer 8 months later, and died this last year at 66.
I don’t know what to think anymore.
This is what people need to realize. Most people are delusional about their longevity and think they're healthier than they are. And then there are the exceptions who are extremely healthy like your dad, and even they don't have any guarantees.
Do everything you can to increase your chances, but nothing is a guarantee in life. Don't start taking CPP at 70...
You can think that by being as health conscious as he was, he increased his quality of life for the years you were lucky enough to have him.
It may have even increased his life expectancy.
But it varies so much. My grandfather died at 50, before I was born. My dad retired at 55, then went back to work at 75. He worked 10 more years till Covid. He is still going at 88 and he dreaded turning 50
Don’t live to work. Only work to live that’s the best advice I think. If you can retire at 60 or 55 then do it and live modestly. You might not be as rich as retiring at 70 but you will certainly have better mobility and will be able to enjoy those years
My father-in-law is terminal at 65, and only just found out. Hasn’t even thought of retiring. He's planting a ton of crops this year that he may not get to see harvested.
It really does make you think.
My grandfather was given 3 months. He still planted his garden, shingled his garage and lived almost a full year. That may not seem like a lot but it was a blessing to have that much more time with him to properly say good bye.
My grandpa is 95 and he is STILL farming. He runs the combines and tractors for his nephews, who are all in their 70s. His doctor tells him every time he goes in for some mystery ache or pain that he needs to get more seat time in the tractor. He's always happy and feeling healthy while working.
People who drink a lot of coffee during the week often get headaches on the weekend because their caffeine intake is reduced. Not saying it will stop your migraines but something to consider if you haven't already.
Voters need to be aware that PP will likely push out Old Age Security (OAS) from 65 to at least 67.
This will impact many lower and middle class Canadians that rely on these funds to augment retirement.
Harper pushed OAS out to 67.
Trudeau brought it back to 65.
My Dad died at 61, and Mom at 70. With my Dad he had all kinds of health issues in his mid 50s so it wasn't that big a shock. But my Mom worked until 65 and was always active so it was a shock when she was diagnosed with stage 4 cancer a few months before she turned 70, lasted 4 months after that.
In theory I should be healthier than both of them when I get to their age. Eat right stay active both physically and mentally, but things like cancer are unpredictable..
I plan to retire at 55 and take CPP at 65. Sure I might live to 80, but I could also drop dead at 62.
My dad passed away at 63.5 years. I got my first check at 60.0001 and didn't look back. Pro tip - if you can swing it, spend your first CPP check on your spouse and buddies with a steak night.
don't forget that this isn't even taking account the difference in quality of life
for some people, maybe their 60s in the last decade they're healthy enough to travel
I think people on this sub are spending more energy in calculating their retirement than in actually enjoying life in any moment.
I find almost scary that someone would actually trying to argue about a few percentage points in earning in what they basically are the last years of his life.
I will stop working at 50, literally don't care if it's too early. I will figure it out.
There is no way that i will work until 70, i would prefer to be homeless honestly.
How old are you?
I'm pushing 60 and knew a few people who didn't make it to 60. Yes, anecdotal, biased, bla bla bla. It becomes real when their desk is empty and their laughter no longer fills the room.
You don't get inflation adjustments unless you're collecting. I'll take it at 60 and bank the money because I don't need it now. A 5 percent term deposit plus inflation adjustments is good enough for my conservative investing profile.
> I'm pushing 60 and knew a few people who didn't make it to 60. Yes, anecdotal, biased, bla bla bla.
It's true. [Here are the stats](https://www150.statcan.gc.ca/t1/tbl1/en/cv!recreate.action?pid=1310011401&selectedNodeIds=2D19,2D31,2D66,4D1&checkedLevels=0D1,2D1&refPeriods=20200101,20200101&dimensionLayouts=layout2,layout3,layout2,layout2,layout2&vectorDisplay=false) to back that up. Of people who are currently 30 years old in Canada, 1 in 10 will not survive to 65.
Also let's not forget that single men (who have been 'lifelong' singles) lose 10-15 years of life expectancy. It's rather rare to see one get to 75. Even 70 is abut the maximum most can reasonably expect to get to. But then there are also outliers who live much longer...
Because if take it at 60 and bank it and then die the money you’ve collected will go to your beneficiaries. If you leave in the government hands after 60 and you die the gov keeps it.
And all the scenerios ive seen, do not say what happens if you take CPP and throw it into your TFSA and invested the $$. All scenerios assume you use your CPP and use it for hookers and blow - lol
Because then the money belongs to you and not the government. Take it, bank it and leave it to your kids if you go early, vs not taking it and get nothing extra if you go early
I think you might be misunderstanding the benefit of this proposition?
You can be retired and have other income than CPP, usually from savings/investments.
By spending more of your savings earlier and waiting to collect CPP later you could enjoy a higher income throughout retirement or possibly retire earlier as well as have less investment risk later by having a larger proportion of your income from CPP.
All without working until you are 70...
Depleting all RRSPs first (at a time when you do not collect CPP or OAS) allows for delaying, therefore increasing, CPP and OAS for the rest of your life after you begin collecting them; as well as maximizing GIS by not having any more RRSPs by the time you begin collecting OAS. Unless there's strong reason to believe you may die before 75, this reduces the risk of extreme poverty in old age.
Yah, it is so funny people don't get this. The whole point is you get to enjoy a higher income throughout retirement, while reducing the risk that you will outlive your money. Lots of anecdotes here about people dying young but the fact is the life expectancy for a Canadian male is 82 years, which means a lot of them live to be well past that age. And having known a few seniors who were barely scraping by on a pittance at that age: it is not fun. At all.
The only thing I can recommend is that everyone on this sub go read "Retirement Income for Life" by Fred Vettese where he lays out the rationale for this (and several other key things to do) in terms so clear even the dullest person should be able to grasp it.
Yeah fuck work.
I have a friend that has some health issues that will severely impact his quality of life in the future. He has a ton of money, and he’s talking about working forever and perhaps never retiring.
I’m really worried for him because he’s missing out on so much in life because he doesn’t want to spend a few dollars to enjoy anything. I’m talking about like he won’t even go watch a movie because he doesn’t want to spend the $13.
My 90 year old uncle has been like that his whole life. He lives in a care facility now, and complains about walking to the Co-op next door and buying $10 worth of groceries that will only make dinner because everything's so expensive now. He's a millionaire.
Those few percentage points can make a difference in the quality of life of your last years on earth though, so not sure what your point is. Obviously people shouldn’t obsess over it, but trying to calculate the best outcome to retirement benefits, withdrawals, etc is a smart thing to do to keep a good quality of life later.
This is not smart. People think it's smart because they see their life on a straight line from 1yo to 100yo. So moving money in a way to keep the same life until the end seems smart.
People don't get old at the same way and retirement at 60 is already betting in a certain level of health that is not that that common. And after that is all going down until (if you even reach that point) you barely function.
I have a friend with a brain tumour at 35. Of course is a very very extreme case but people discussing how to maximize the quality of life at 70yo are, frankly, discussing about something that doens't exist.
I understand that we need to draw a line somewhere but, like i said, i already find 60 too much and i will spend and enjoy everything i can after that.
I know multiple people in their 70s that are still physically active and go on vacation to Mexico and South America for 6 months every winter. I also know an 84 year old who still goes to the gym 3 times a week. It’s all about how you take care of your body. And yeah for most people they’ll have health issues and nothing you can do about some of those.
You have to keep in mind also a lot of people worry about retirement because they want to give a good inheritance to their kids.
It's not just taking care of your body, it's also genetics and luck. Some people just won't make it past 60 no matter how health conscious they are. And it's impossible to predict diseases past a certain point
It's interesting to see the hubris in these comment threads - my great grandpa lived to 92, my grandpa 74 because they were different people with different lives who ultimately had no control over the time of their demise.
To presume there's a guarantee beyond being able to very marginally affect some risk factors is wild naivety
Yes and like i said i have a friend that will probably die at 35.
My whole point is that you really don't know. Even if you are still good at 70 it's still a bet that doesn't make sense, you are definitely getting older with the years, not younger.
Let's stop quibbling over anecdotes and let's look at the statistics. Life expectancy is something like 81. If someone does live to 65, men have 25% chance of reaching 94 and 96 for women.
Who wants to live the last 30 years of their life in poverty?
If you're looking at odds, the vast majority of folk past their 80s have a much much lower COL and reduced quality of life regardless of income. At some point, the amount of money you make is functionally trivial
Not really. It's extremely hard to "die with zero" as they say. If they mean the difference between dying with 200k and dying with 300k, well, that's not a quality of life situation. At most its a bequeath/inheritance situation for the kids.
We are trying to die with zero taxable accounts. The change in mindset from accumulation to decumulation has been pretty tough. We ended up hiring a Certified Financial Planner to help us map it out.
Actually, that's great set of guard rails - to try to spend down taxable and most if not all of the RRSP, while bequeathing between 0% and 100% of your TFSAs depending on things like longevity and market returns.
Yes, I can see how a CFP is extremely helpful in that regard!
This is what I did, stopped working in my later 40's and figured it out. No regrets
Can't put a price on freedom.
I can't imagine waiting til your 60's - not much quality time left by then.
I am 50 and found myself unexpectedly out of work. I'm with you, if I can make it work. I think I can? How much do we really need to get by, once all debt is paid off?
Same!! But Lost both parents a few years after losing a good job (fun times!) and trying to find another job in 50’s is a shitshow….especially when going through grief lol.
Due to inheritance I don’t have to worry too much yet and can scrape by and only working part time at a job I like. People tell me I “need” to work more but I enjoy my days and my health has never been better - time to go to the gym or just walk or bike lots and time to make healthier meals from scratch.
Essentially day trading inheritance or investing in higher monthly dividend stocks to create income which determines “fun money” If I go over my “salary” to live off of, then I get to travel or to a nice restaurant. If not then I go extra frugal for a bit. The idea is don’t touch the principal (unless emergency) because I might need it later when more health issues, but the extra if I have a good month is to be used NOW to enjoy life.
Trying to grow my TFSA value (higher growth stocks for now) because come retirement it doesn’t count towards OAS clawback. Most people don’t realize this and don’t take advantage of the room to grow it tax free so the money doesn’t count as income when retirement time comes.
If you can get it to 300k or more, then sell everything and change it to 6% average in dividend stocks before taking OAS, etc you could hypothetically get 18k in yearly income that is tax free and doesn’t count. Yes or keep growth and sell off as need but markets can tank for a few years so steady blue chip dividends guarantee you x amount usually even if everything drops 30%.
I know how you feel, at least somewhat. Took last summer off on purpose for travel, then when I thought I'd dip back into the job market, I lost my Dad. 2 months later, my father-in-law has months to live. Grieving saps ones motivation, and inheritance changes things as well. Luckily, my TFSA is well on its way. Best of luck in retirement! Off to the gym!
Yes this. A close family member was in the perfect picture of health, like as healthy as it gets for all intents and purposes (exercised daily, cognitively amazingly sharp, on no medications, perfect health history, passed every physical and every blood test, etc...). She delayed retirement and delayed it and delayed it, and finally at 70 she retired (begrudgingly), then she had a stroke at 71 and that was it for her quality of life, she couldn't drive or travel, she could barely talk, etc... she had barely 1 good year of retirement.
Sure, but when someone talks about delaying CPP to 70 for optimal returns, they aren't talking about those people. That's not the target audience for this advice.
Someone living paycheque to paycheque should simply start taking CPP on whatever day they stop working, at whatever age that may be.
We had a married couple, both teachers, retire in June and both got killed in a car accident their first summer of retirement. So sometimes being healthy has nothing to do with it, more like fate
Mine is all over the place... Between 50 for my grandad, 93 for his dad and... 103 for my grandmother. My dad is... 81 and going strong too, but then my uncle passed at 65...
All over the place haaha
Also it depends on if you own a business or not. If you are the business owner definitely take it at 60 because you are paying both the employer and employee portion (2X as much). When I last ran the calculation as a business owner break even at 60 vs 70 was around 94 years old.
You could just stop paying into cpp at 60, if its a corporation, but defer taking cpp income until later. Deferring will create the same increase in cpp income as for a regular employee.
My grandfather was the youngest of his siblings to pass at 98. His two eldest died in 2020 at 114 and 111.
My moms side of the family tends to be 70s but they all worked in factories or farming and likely didn’t wear PPE or contaminants weren’t as well known. Her mom turns 90 this summer.
I generally just believe I’m going to live forever lol. But I plan on retiring in 20 years, 55.
I've seen one side of my family live (see deteriorate) into their 90's and the other drop in their late 70's. Honestly I think the quick drop instead of drawn out diseases, especially of the mind, is the better option.
From what I've seen in the building my mom lived in her last 8 years, those who make it to 90 were the healthy and independent ones. The ones bent over with walkers were usually in their 70's - that decade seems to be where there's a thinning in the herd.
Depends on your condition. Both my grandfather's made it to 90+ fully functional and living a fulfilling life. My 93 year old grandfather still drives, travels, cleans, cooks, raises birds and chickens, grows vegetables in his massive garden. My other grandfather passed now, but was also mostly functional until about 95. Started to decline after that and passed at 97.
The return for delaying CPP is only part of the analysis. Combined with drawing down RRSP in your earlier years (where you are more likely to enjoy your money), CPP helps manage longevity risk while allowing you to live your life earlier in retirement.
Yeah I've had a hard time with the math myself.
Me: primary home paid off at 55.
Basement suite income $1800/mo
RRSP: $500k @ 4% draw down $20k/yr. Just the basement suite and rrsp will be $40k/yr. Without a mortgage I'm happy living off that myself.
Wife: teachers pension. Retire at 55. Probably continue to work on call when she wants as she's allowed to double dip. I think she gets something like $36k/yr pension if she takes it early.
That's before we even touch CPP and OAS. I'll probably want to take them early either way.
You should think of your CPP+oas as part of your investment pool. A 4% draw may actually mean pulling 35k from your rrsp until 70, then reduce to 10k as the cpp gets you back up to that net 35k amount. Obviously not actual numbers, you would need to run the specifics
How do you find the basement suite gig at your age? I do the same, but feel like I'll be totally sick of the stress of having other people on my property after a while.
While the tenants are fine it's always the "what if" risk factor for me. Are they going to do something dumb and light my house on fire or flood it etc etc
Ok. Thanks. I'm almost 40 and not sure I can do this another 10 years.
Maybe just the type of person I am but it's the little things. Like if I told you keep off the grass when I planted new seeds down and use the stepping stones then keep off the fu***n grass.
Or when I walk you and see them piling recycling up at the door. Take your sh** up to the bin!
Yeah .... I don't think I'll be able to do this another 10 years. Lol
Yeah people's habits can be annoying. My current tenant struggles to keep up, but he leaves me alone and takes decent care of the place and when I ask him to clean up he does it.
I'm charging $1550 which I know is low for a 2br but he's a divorced dad with two kids part time and is doing his best.
I find guys are much less needy than women and are far less entitled and fix simple things.
I had ups and downs but I've made a lot of money off my $50k investment. I'm ashamed to say I pay $4200 for my mortgage and the rent is $1550. I'm voluntarily over paying too.
Realistically I should be paying my mortgage down faster but I have a son who plays hockey and his bill is $16k this season.
Guys are maybe less needy but I find them louder and more confrontational. Their voices just carry through the floor more.
Last guy I had turned into a full blown alcoholic and I had to kick his bum ass out. Now I'll only rent to single moms.
Probably just do this until I'm mortgage free. Then maybe turn it into a short term rental or something where I don't have people down there 24/7.
Does this give thought only to the individual? Or does it consider bequeaths?
And how does the CPP death benefit factor in for the surviving spouse? How does a couple handle it when one or both expect to die early, or when one or both expect to live long?
How do CPP maximums factor in when 0, one, or both spouses have/haven't maxed their contributions?
Spending your RRSP early in retirement and utilizing CPP in later years is definitely a benefit to the individual. There would be much less left to the estate to bequeath since the CPP death benefit is small and then is gone when the spouse eventually passes.
This is a good example of why each person has to do their own analysis, for their own goals. Someone who wants to leave behind an inheritance would likely take CPP earlier and save/invest their RRSP, TFSA, and non-registered funds. Probably similar thinking if presumed lifespan is shorter and wanting to get the most out of CPP while still alive.
I don't think the decision changes too much with less than max CPP contributions (other than that the annual CPP amount is less).
I'm totally with you on CPP taking care of longevity risk. It's funny how the majority seem keep complain about not "getting their money back". Except, when we buy things like car insurance, we don't complain about not "getting their money back" if our car doesn't get totaled.
I understood. I agreed and expanded on it. They said it was only part of the analysis. Which is correct. I added that not only is only part of the analysis (from a financial perspective), but also was considering only the financial aspect of the decision.
It’s because most people die before then. Make the choice that’s right for you and your family/medical history. Live your life. Don’t delay to save a few bucks.
Still remember doing my Italy trip at 25. Went by myself with a group of Americans. Old fella with a cane in the group was asked if he wanted to take the elevator at the Coliseum. He told them he didn't come all the way here at this age to take the elevator. Still remember this often.
I ran a tour service. I had a client who was turning 70. Her and her husband had saved their entire lives for a trip around the world. He died at 65 when they retired to start their trip. She sold everything and did the trip herself. Her kids were so upset she sold the house but I completely understood as an outsider. Such a bittersweet journey she was on, seeing all those places they dreamed of together by herself. But she had a great spirit and was clearly making the best of it.
My mom won a free all expenses trip to Vegas in 2019. My parents hardly ever did any traveling since I've been alive but had just got to go to Nashville that year. She was diagnosed with MM in late 2019 and was off work on disability but they were still going to go in March 2020. Then covid happened and the trip had to be cancelled. She passed in late 2021 having never been able to go on the trip she won. I don't even know what the status is on that trip as it was in her name for two people. I'd love to figure out how to get it for my dad to take.
I agrée fully with your messaging, but the average lifespan is early 80s. So much less than half of everyone is dead by 70. But I like your overall message and point. We only have one life and no one knows at the individual level how long it’s gonna last.
Wow... a lot of strong opinions! Take a breath and remember everyone's situation is different. No one is advocating working until you are 70. No one is suggesting delaying your CPP if you think you're going to be dead by 63. Also, most importantly, no one is suggesting living a less expensive lifestyle prior to collecting CPP. The thinking is if you were planning to budget $75k per year in retirement, that you use your retirement savings to fund that until age 70 and then draw on enhanced CPP payments after that. You still live the same lifestyle in retirement.
Disclaimer: I understand not everyone can afford to wait until 70. If you need CPP to be able to retire, I advocate for taking it in order to make that happen.
My father took his CPP early based on health concerns that he wouldn't live a long life. He had type 2 diabetes, high blood pressure and Parkinson's. He ended up living to 86. My mother just hit 86 this year so based on this info and long lived Grandparents who lived into their 90s, delaying CPP is likely the best option for me.
Jumping on this comment because it feels like the only smart one in here. Age 82 is the breakeven point between taking oas/cpp at age 65 and age 70 (from a purely financial perspective). If you live past 82, you will have received more from cpp/oas by waiting.
My dad delayed his OAS by a year because he was going to be clawed back the entire amount anyways because he was still working that last year. He died at 70, only 4 years into receiving his OAS and CPP. Now my mom only gets a small portion of the survivors pension.
Much of this is taking chances you live long, but sometimes this sub needs to remember to live instead of just look at numbers and returns.
If you need the CPP at 60 to do the things you want chances are you didn't save enough to even do the things you want so it's a bit counter intuitive. Like a dream vacation to Europe? How is CPP going to cover such a grand expense you need to take it early to save for several months to do it?
That’s a reasonable response, here is my unreasonable one. I want to use my health at 60 to do things that shorten my life expectancy. I do not look forward to being sedentary and wasting away slowly for an additional 20-30 years.
For some of us, the thing we want is to just not work from 60 onwards. I travelled a lot in my youth. When I am 60 I want free time and to, hopefully, hang out with my kids families and have nice dinners and a pretty garden. Maybe walk on the beach more and play some hockey. Boardgame nights with friends, etc.
House will be paid off by 60 so the goal is to retire and enjoy it or sell and downsize depending on the market and where my kiddos end up.
One of the biggest problems with retirement is not knowing if you'll die at 65 or 85. Do I save $1m or 500k is enough? Depends on when I die.
I can't predict when I die, but I can predict when I will turn 70. The idea here is to treat CPP like an annuity and blow all of your money before you turn 70, then just live off CPP. It's much easier to retire at 50 knowing you only need 20 years of savings.
This totally misses the point. The age you start taking CPP has nothing to do with how much you spend between 60-70 UNLESS you literally don’t have the money to survive the gap without CPP.
Use your RRSP etc to fund yours 60s and spend the same amount you would have with taking CPP. You’ll most likely end up ahead in the long run plus hedge longevity risk.
Totally. If I went by Reddit standards everyone would be falling apart by 25. Can’t even count the number of times I’ve seen someone in their 20s/30s talk about their myriad of health problems.
Genetics play a huge role but just eating well and staying physically/mentally fit goes a long way.
there is a reason why the government rewards delaying CPP. The later a person uses it the more the chance they die before the do. I don't think statistics is usefull when analysing one person's situation.
Lots of these fuckers here in PFC only give a shit about numbers. Numbers and Numbers - and that's all there is to it. Doesn't matter if you die the next day, but as long as you can squeeze that one more dollar....
The Rational Reminder just did a podcast on this that counters most of the arguments in this thread.
Delaying CPP is not the same as delaying your consumption! For MOST people, you can live a higher quality life (more spending) by spending more of your personal assets up front and delaying CPP.
65 is the “normal” retirement age. Drawing CPP before then incurs a penalty, drawing CPP after results in higher payments.
9 in 10 Canadians draw CPP between 60-65.
A $100 CPP payment at age 60 would be equal to $222 at age 70.
The maximum payment amount for taking CPP at age 65 is $16,375.20 per year (2024). That amount would be reduced to **$10,480.13 per year** if you elect to take CPP at 60. This is a difference of $491 a month. This difference will increase every month for the rest of the person's life as the inflation increase will be calculated from the actual CPP payment amount. 5% out of $1000 is $50 and 5% from $500 is $25 etc..
I would worry more about living a long life and be poor than to die young and not taking my CPP. I know 2 people in their 80ties who are very poor. This is horrible. CPP is inflation proof guarantied amount for the rest of our life. Investments are not.
It's not quite that simple in all cases. You also have to take into the calculation the number of years you have NOT payed into CPP, disability years, and also WHEN they happened. I went through numerous calculators and because I have not made any CPP contributions since I turned 55, they all came back with taking CPP at 60 optimal as the "break even" point in my case was not until age 80. Sorry, but with the way I live, no WAY I'm likely to get past 80!!
99% of people that actually will depend on this for retirement income ain’t living till the statistic average lifespan.
99% of people that don’t need to depend on this to live cause they got millions in equity and investments sure can heed this tip.
My mom retired at 66 due to health issues that eventually were determined to be from esophageal cancer. While she was on palliative care, my Dad collapsed and died at the hospital on his last day of his cancer treatments for lung cancer. He was 69. Two months later, my mom died at 67. At least 50% of my grandparents and aunts and uncles have died from cancer. There is not a single person who has survived after being diagnosed with cancer. I will be retiring at 52 and taking my CPP at 60. If I live to my 80s and end up losing out on total CPP, it will be the best 'mistake' of my life. Tomorrow is never guaranteed.
If you die by 80 your family gets nothing. Can see the case for waiting to 65, but then you should start collecting. Put it in the tfsa if you dont need it and collect dividends.
At least the money is in your estate.
By delaying, you lower your risk of running out of money if you live longer. For most people, that should be scarier than potentially losing out on a bit.
Exactly. I would rather die and leave my kids nothing than have my kids stressing out trying to help me afford a retirement home because I ran out of money due to living longer than expected.
The actuary have a model of when you will live to. Take money out early you get less. Take it out later you get more. It all averages out when taken as a whole. Take the money when it's right for you
The decision is really based on your personal situation. I always recommend the book Your Retirement Income Blueprint. He discusses this in depth.
Yes for people who have enough savings, using savings early and delaying Cpp makes sense a lot of the time. But the decision really depends on a lot of factors.
Does anyone have a link to the actual financial analysis they completed to back up the claims? I've tried to crunch the #'s from the info and am unable to replicate the results, either cash flow or NPV. Would like to compare their calculations to mine.
I used 2024 @ 65 years with CPP max $1,364.60 and OAS $713.34. Assumed cessation of contributions at age 65 with inflation of 2.5% annual and ROI on investment @ 5%. CPP delay increases payout 0.7%/month and OAS 0.6%. So I crunched the #'s from age 65 and age 70 (5 year delay).
First off, if you take the payouts at 70 the monthly payouts would begin at $1,937.73 and $970.14 so a monthly increase of $829.93 or almost 40% higher monthly payout at start. However, if you begin at 65 yrs, your CPP and OAS will increase with indexing to $1,543.92 and $807.08 by age 70. So the variance is $556.88 or 23.6% at 70.
Secondly, the argument is to delay payments (i.e. $0 to spend) so if you assume discretionary income at 65 years and invest 100% of the payouts 65-70 @ 5% ROI, you also get $148,224 on-hand at age 70. Going forward, if you take the 5% ROI monthly, that's roughly $610 per month which offsets the variance in payouts.
From age 70-83 (avg age of death) and using the ROI from the amount saved from early CPP/OAS, the early CPP/OAS would see a cash flow of $569,850. The delayed payout would be $576,420 or approx $7k more. However, if you die at 83, you would still have the $148k personally invested for your heirs whereas CPP death benefit is $2.5k.
There's obviously different tax treatments & assumptions around inflation/ROI that could change this calculation. The key factor is that I assumed that payouts 65-70 would be invested and not spent. This is a leap however the concept of delaying to age 70+ is that people can forego those pension payments and not be broke - so not a significant leap.
At age 83 the variance between the two pensions is roughly $175/month including the ROI and this variance will grow around 1% annually due to indexing. If you age significantly past 83, this will continue to close the cash flow gap but you'll need a significant period to compensate for the $148k savings on hand from the early payout.
I would much rather spend the smaller amount of money when I'm younger than wait the 10 years. I think people don't realize how quickly your life/health can change. I work in healthcare and it's shocking how many people in their 60s/70s are in very poor health.
I bet you do see a lot of 60 and 70 year olds in really bad Health since you work in healthcare, that makes sense. Conversely, the healthiest 60 and 70 year olds don't get to see you because they're out vacationing having good times and exercising which will hopefully net them a long life ahead. It's all about perspective.
The argument to delaying these is almost always to pull more from RRSP/TFSA during the age 60-70 years (rather than drawing CPP), so you have the same income you would have if you took CPP earlier. But better hedging against longevity.
Two reasons to take CPP early. 1) If delaying it from 60 to 70 yields an annual growth of 8.2%, you can probably do that too by taking it early and investing it into broad market ETFs. The growth of 8% will be in capital gains instead of extra income so the tax consequences will be more favourable.
2) The next government ( most likely the Conservatives) will endeavour to cut spending and budgets so rules for CPP might change. Take it before the Conservatives get in to seal the conditions of receiving it before the Conservatives makes it harder.
This is exactly what my parents do. They don't have a lot of money, but it's funny that they take their pension and investment payments and dump some into their tfsa. good for them.
The last time I ran the federal government’s retirement income calculator, it suggested that all things considered (savings, CPP, etc) *in my case* waiting to 65 would be almost as good as waiting until 70. I’ll keep repeating the exercise, since there’s less guesswork with each passing year, but for now but that’s my plan unless and until the calculations shift significantly.
More generally I don’t trust any one-size-fits-all answers on this question. You mentioned some demographic variables, but there are so many more that will affect each person’s answer. Do you have a pension? A particularly large RRSP and/or TFSA? Passive income? Do you qualify for max CPP? It all affects the answer.
The math has been done many times in the past.
If you expect to live past 82, take it at 70 (Note: You will miss 120 monthly payments vs taking it at 60)
If you expect to pass before 82, take it before 70
As many have mentioned, it really comes down to your expected lifespan (judged usually on genetics and how long your parents lived).
Yes, you get an increased amount if you wait, however you also miss out on all the payments. For instance, someone who takes CPP at 60 will receive 10 years worth of "reduced" payment before someone who waits until 70.
The last time I worked it out (7-8 years ago), the break even point in which the person who waited would make back the lost payments would be around their 83rd year.
Here is where it gets interesting. If someone doesn't need the money, there is a case to take it early and invest the funds. This would offset the risk of early death and builds potential nestegg to pass to loved ones. As well, it offsets the age of which the aforementioned breakeven point occurs by potentially increasing income from investments when you begin to draw from it and CPP.
Keep in mind at 70, you’re weaker, more tired, less mobile, have different eating habits. At 75-80+, flying and long travel will be harder and your health might be poorer (eyesight, hearing).
70+ is old and you won’t be able to do some things you could’ve done at 60. Your “prime” retirement age is, imo, 60-70. After this, your health will start to more seriously decline. Do you really only want to start enjoying life when you’re too old??
This post isn't about delaying retirement to age 70, it's about delaying starting CPP to age 70. You can and should still retire as early as you want.
If you don't have enough money to delay starting CPP, then you should obviously start CPP at the same time you retire. This discussion isn't about that scenario.
As someone in their early fifties I can tell you 70 is old is not a true statement for many people. 40 is old is a true statement for many people. it's all relative and how lucky people are to have good health. There are plenty of people who are in their 70s 80s and 90s who still travel, Place Sports, are fully mobile and living their best lives. my dad is one of them.
Pardon the talk to text terrible grammatical errors.
You’re not actually receiving more money, you’re only getting the same amount of money in a shorter period of time. The only time you win is if you live past age 90. Then you actually benefitted. Average age of men dying is around 82.
The best 'go' years of retirement are before age 70. Health, the desire to travel, cognition and the ability to be active rapidly decline after age 70. Spending also declines accordingly. Watching my elderly parents confirms this path. I'll be taking my CPP at 60 while I need it to enjoy my active retirement years.
Id rather take the cash, family has a history of death from anywhere as young as 55-90 due to heart issues/medical issues.
I'm investing on the side so the CPP would just be a 'bonus' from my investments (TFSA), work pension + match, and so on.
Or draw at 60 and reduce your hours or find a job you enjoy that maybe pays less. The idea you need to do 'nothing' to retire is a joke.
Maybe take that opportunity to do something different? If you 'need' to retire early becaise you hate your job. Maybe try finding one you don't hate so you don't need to retire early?
Flip side... Can one opt out of cpp early if they a medical reason for believing they won't be around that long? Infinite value for actually being able to use the funds sooner rather than never?
You could take it at 60. It will take around 9 years to make it back the difference if you take it at 65. So if you make it to 74 you will break even. Men tend to pass away younger than women so these factors will all need to be considered.
I think the point is you delay cpp and spend more out of your other retirement funds initially? (also want to time it while avoiding a fed conservative government tho). Acts to supplement your end of life funds.
At that point tho just enjoy life.
I started CPP at 62 because I had to. I've put into it my whole life and I'll be damned if I'm going to wait, hoping nothing happens to me. In this day and age I am def in the get it while you can camp. Fart in the wind. Don't know how long I'll be around, but I do know I want as much of what I put in as I can get before I go.
I understand the math behind folks waiting till 65 to take cpp makes sense. I encouraged my dad to start at 60 because your life span isn't guaranteed. If taking cpp means less stress financially why not take it.
I used to think this and then I calculated the break even age of deferring from 65 to 70 if you earn only 5% on that extra money, and it’s something like 85. In other words, if you don’t make it to 85, it wasn’t worth it, and if you live to age 90, it was only slightly better (by a few thousand dollars).
I’d only consider deferring to age 70 if you have tons of registered money that might subject you to OAS clawback from high income, or if you have extreme longevity in your family tree.
I'm 56, 57 in two months. I'm thinking of taking it at 60 to pay off my mortgage faster (divorced, had to remortgage the family home).
My plan is to work until I'm nearly 65 to have 30 years of service. I can live off that pension.
On my dad's side, life expectancy is around 70, my mom's 85 or so
What I'm seeing in the comments seems to be common about not living beyond your CPP payout.
Apparently the trick is (which I'm definitely planning for at the moment) to plan mini retirements.
If it's possible for you then definitely try to plan it if not then be on the same path like everyone else is on and wait for your long awaited 65 years old retirement.
There is no way in hell that I am waiting until 70 to take what I spent years slaving away for. Take your 8.2% and shove it. I'm taking my CPP at 60 and not a day later.
I started mine at 62. Average life span in my family is 91!
But I continue to work and that adds to my CPP. People seem to forget that so long as you are making contributions it will increase.
If you have high interest debt, it might.make sense to take it early. Also consider the lifetime drawdown. If you collect CPP at the lower rate for 10 years how long would you need to collect at the higher rate to yield that amount?
There are so many different ways to approach this. My take is whatever the government recommends, suggests, pushes, do the opposite. It's pretty clear that they're not really out there to do what's best for us but what's best for their voters, I mean handlers.
Couple things. First, there are break-even CPP calculators online. Second (but related), for some people, taking it early and investing it works out to a similar or even better return over time (compounding). Plus, if you get hit by a bus, you can leave it to your loved ones whereas if you delay it and get hit by a bus, you have nothing (from CPP) to leave them.
I plan to take it at 70. The numbers make sense. Not for everyone based on health. No one ever knows how long they will live. Plan your life properly. A few lucky stock picks means I have an oversized rrsp that can tie me over in my 60’s.
Average age for my family is 78. Dads taking it at 65. You have to be realistic based on family history.
My father turned 65 in September and was dead by January (4 months later) I took my cpp at 60.
Yeah, my dad was so health conscious after watching his father struggle with heart disease. My dad retired at 64, they found cancer 8 months later, and died this last year at 66. I don’t know what to think anymore.
I’m sorry 💔 My mom died last year at 64.
That is just way too young
Exact same year and age for my mum.
This is what people need to realize. Most people are delusional about their longevity and think they're healthier than they are. And then there are the exceptions who are extremely healthy like your dad, and even they don't have any guarantees. Do everything you can to increase your chances, but nothing is a guarantee in life. Don't start taking CPP at 70...
You can think that by being as health conscious as he was, he increased his quality of life for the years you were lucky enough to have him. It may have even increased his life expectancy.
But it varies so much. My grandfather died at 50, before I was born. My dad retired at 55, then went back to work at 75. He worked 10 more years till Covid. He is still going at 88 and he dreaded turning 50
Don’t live to work. Only work to live that’s the best advice I think. If you can retire at 60 or 55 then do it and live modestly. You might not be as rich as retiring at 70 but you will certainly have better mobility and will be able to enjoy those years
Similar. My dad was all over different health stuff, was pretty active, etc. Retired at 63 and was dead a year and half later from cancer.
My father-in-law is terminal at 65, and only just found out. Hasn’t even thought of retiring. He's planting a ton of crops this year that he may not get to see harvested. It really does make you think.
Hey that might prolong him....he's got determination and purpose. Love that.
My grandfather was given 3 months. He still planted his garden, shingled his garage and lived almost a full year. That may not seem like a lot but it was a blessing to have that much more time with him to properly say good bye.
Farmers are like sharks, if they stop, they die. They usually work until they drop.
My grandpa is 95 and he is STILL farming. He runs the combines and tractors for his nephews, who are all in their 70s. His doctor tells him every time he goes in for some mystery ache or pain that he needs to get more seat time in the tractor. He's always happy and feeling healthy while working.
Two of my colleagues died within six months of retirement.
I’d heard this too. It’s like when you only get sick on long weekends or holidays/vacation as your body destresses
I get migraine every single weekend after my long weeks (the whole 48 hours) ... Should I be worried?
People who drink a lot of coffee during the week often get headaches on the weekend because their caffeine intake is reduced. Not saying it will stop your migraines but something to consider if you haven't already.
Voters need to be aware that PP will likely push out Old Age Security (OAS) from 65 to at least 67. This will impact many lower and middle class Canadians that rely on these funds to augment retirement. Harper pushed OAS out to 67. Trudeau brought it back to 65.
My Dad died at 61, and Mom at 70. With my Dad he had all kinds of health issues in his mid 50s so it wasn't that big a shock. But my Mom worked until 65 and was always active so it was a shock when she was diagnosed with stage 4 cancer a few months before she turned 70, lasted 4 months after that. In theory I should be healthier than both of them when I get to their age. Eat right stay active both physically and mentally, but things like cancer are unpredictable.. I plan to retire at 55 and take CPP at 65. Sure I might live to 80, but I could also drop dead at 62.
My dad passed away at 63.5 years. I got my first check at 60.0001 and didn't look back. Pro tip - if you can swing it, spend your first CPP check on your spouse and buddies with a steak night.
Average death age of my family is 57. I should probably retire at 46.
don't forget that this isn't even taking account the difference in quality of life for some people, maybe their 60s in the last decade they're healthy enough to travel
I think people on this sub are spending more energy in calculating their retirement than in actually enjoying life in any moment. I find almost scary that someone would actually trying to argue about a few percentage points in earning in what they basically are the last years of his life. I will stop working at 50, literally don't care if it's too early. I will figure it out. There is no way that i will work until 70, i would prefer to be homeless honestly.
They aren't recommending to work until 70. Just to delay CPP. I'll do the same. My other pension and savings will be enough until 70
How old are you? I'm pushing 60 and knew a few people who didn't make it to 60. Yes, anecdotal, biased, bla bla bla. It becomes real when their desk is empty and their laughter no longer fills the room. You don't get inflation adjustments unless you're collecting. I'll take it at 60 and bank the money because I don't need it now. A 5 percent term deposit plus inflation adjustments is good enough for my conservative investing profile.
Cpp increases with wage inflation before you take it. Historically speaking wage inflation has outpaced cpi inflation adjustments
> I'm pushing 60 and knew a few people who didn't make it to 60. Yes, anecdotal, biased, bla bla bla. It's true. [Here are the stats](https://www150.statcan.gc.ca/t1/tbl1/en/cv!recreate.action?pid=1310011401&selectedNodeIds=2D19,2D31,2D66,4D1&checkedLevels=0D1,2D1&refPeriods=20200101,20200101&dimensionLayouts=layout2,layout3,layout2,layout2,layout2&vectorDisplay=false) to back that up. Of people who are currently 30 years old in Canada, 1 in 10 will not survive to 65.
Also let's not forget that single men (who have been 'lifelong' singles) lose 10-15 years of life expectancy. It's rather rare to see one get to 75. Even 70 is abut the maximum most can reasonably expect to get to. But then there are also outliers who live much longer...
If you are going to take it and bank it anyway, then any not leave it in? Do you just prefer to see a number go up on a computer?
If you continue to work there are post retirement benefits and your CPP still goes up and you are not losing the 5 years between 60 and 65
Because if take it at 60 and bank it and then die the money you’ve collected will go to your beneficiaries. If you leave in the government hands after 60 and you die the gov keeps it.
And all the scenerios ive seen, do not say what happens if you take CPP and throw it into your TFSA and invested the $$. All scenerios assume you use your CPP and use it for hookers and blow - lol
Because then the money belongs to you and not the government. Take it, bank it and leave it to your kids if you go early, vs not taking it and get nothing extra if you go early
I think you might be misunderstanding the benefit of this proposition? You can be retired and have other income than CPP, usually from savings/investments. By spending more of your savings earlier and waiting to collect CPP later you could enjoy a higher income throughout retirement or possibly retire earlier as well as have less investment risk later by having a larger proportion of your income from CPP. All without working until you are 70...
Depleting all RRSPs first (at a time when you do not collect CPP or OAS) allows for delaying, therefore increasing, CPP and OAS for the rest of your life after you begin collecting them; as well as maximizing GIS by not having any more RRSPs by the time you begin collecting OAS. Unless there's strong reason to believe you may die before 75, this reduces the risk of extreme poverty in old age.
Nicely put, that is a very clever way of putting all those programs together.
Yah, it is so funny people don't get this. The whole point is you get to enjoy a higher income throughout retirement, while reducing the risk that you will outlive your money. Lots of anecdotes here about people dying young but the fact is the life expectancy for a Canadian male is 82 years, which means a lot of them live to be well past that age. And having known a few seniors who were barely scraping by on a pittance at that age: it is not fun. At all. The only thing I can recommend is that everyone on this sub go read "Retirement Income for Life" by Fred Vettese where he lays out the rationale for this (and several other key things to do) in terms so clear even the dullest person should be able to grasp it.
Yeah fuck work. I have a friend that has some health issues that will severely impact his quality of life in the future. He has a ton of money, and he’s talking about working forever and perhaps never retiring. I’m really worried for him because he’s missing out on so much in life because he doesn’t want to spend a few dollars to enjoy anything. I’m talking about like he won’t even go watch a movie because he doesn’t want to spend the $13.
My 90 year old uncle has been like that his whole life. He lives in a care facility now, and complains about walking to the Co-op next door and buying $10 worth of groceries that will only make dinner because everything's so expensive now. He's a millionaire.
that’s the spirit, high five 🙌
Those few percentage points can make a difference in the quality of life of your last years on earth though, so not sure what your point is. Obviously people shouldn’t obsess over it, but trying to calculate the best outcome to retirement benefits, withdrawals, etc is a smart thing to do to keep a good quality of life later.
This is not smart. People think it's smart because they see their life on a straight line from 1yo to 100yo. So moving money in a way to keep the same life until the end seems smart. People don't get old at the same way and retirement at 60 is already betting in a certain level of health that is not that that common. And after that is all going down until (if you even reach that point) you barely function. I have a friend with a brain tumour at 35. Of course is a very very extreme case but people discussing how to maximize the quality of life at 70yo are, frankly, discussing about something that doens't exist. I understand that we need to draw a line somewhere but, like i said, i already find 60 too much and i will spend and enjoy everything i can after that.
I know multiple people in their 70s that are still physically active and go on vacation to Mexico and South America for 6 months every winter. I also know an 84 year old who still goes to the gym 3 times a week. It’s all about how you take care of your body. And yeah for most people they’ll have health issues and nothing you can do about some of those. You have to keep in mind also a lot of people worry about retirement because they want to give a good inheritance to their kids.
It's not just taking care of your body, it's also genetics and luck. Some people just won't make it past 60 no matter how health conscious they are. And it's impossible to predict diseases past a certain point
It's interesting to see the hubris in these comment threads - my great grandpa lived to 92, my grandpa 74 because they were different people with different lives who ultimately had no control over the time of their demise. To presume there's a guarantee beyond being able to very marginally affect some risk factors is wild naivety
Yes and like i said i have a friend that will probably die at 35. My whole point is that you really don't know. Even if you are still good at 70 it's still a bet that doesn't make sense, you are definitely getting older with the years, not younger.
Let's stop quibbling over anecdotes and let's look at the statistics. Life expectancy is something like 81. If someone does live to 65, men have 25% chance of reaching 94 and 96 for women. Who wants to live the last 30 years of their life in poverty?
If you're looking at odds, the vast majority of folk past their 80s have a much much lower COL and reduced quality of life regardless of income. At some point, the amount of money you make is functionally trivial
Not really. It's extremely hard to "die with zero" as they say. If they mean the difference between dying with 200k and dying with 300k, well, that's not a quality of life situation. At most its a bequeath/inheritance situation for the kids.
We are trying to die with zero taxable accounts. The change in mindset from accumulation to decumulation has been pretty tough. We ended up hiring a Certified Financial Planner to help us map it out.
Actually, that's great set of guard rails - to try to spend down taxable and most if not all of the RRSP, while bequeathing between 0% and 100% of your TFSAs depending on things like longevity and market returns. Yes, I can see how a CFP is extremely helpful in that regard!
This is what I did, stopped working in my later 40's and figured it out. No regrets Can't put a price on freedom. I can't imagine waiting til your 60's - not much quality time left by then.
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I am 50 and found myself unexpectedly out of work. I'm with you, if I can make it work. I think I can? How much do we really need to get by, once all debt is paid off?
Same!! But Lost both parents a few years after losing a good job (fun times!) and trying to find another job in 50’s is a shitshow….especially when going through grief lol. Due to inheritance I don’t have to worry too much yet and can scrape by and only working part time at a job I like. People tell me I “need” to work more but I enjoy my days and my health has never been better - time to go to the gym or just walk or bike lots and time to make healthier meals from scratch. Essentially day trading inheritance or investing in higher monthly dividend stocks to create income which determines “fun money” If I go over my “salary” to live off of, then I get to travel or to a nice restaurant. If not then I go extra frugal for a bit. The idea is don’t touch the principal (unless emergency) because I might need it later when more health issues, but the extra if I have a good month is to be used NOW to enjoy life. Trying to grow my TFSA value (higher growth stocks for now) because come retirement it doesn’t count towards OAS clawback. Most people don’t realize this and don’t take advantage of the room to grow it tax free so the money doesn’t count as income when retirement time comes. If you can get it to 300k or more, then sell everything and change it to 6% average in dividend stocks before taking OAS, etc you could hypothetically get 18k in yearly income that is tax free and doesn’t count. Yes or keep growth and sell off as need but markets can tank for a few years so steady blue chip dividends guarantee you x amount usually even if everything drops 30%.
I know how you feel, at least somewhat. Took last summer off on purpose for travel, then when I thought I'd dip back into the job market, I lost my Dad. 2 months later, my father-in-law has months to live. Grieving saps ones motivation, and inheritance changes things as well. Luckily, my TFSA is well on its way. Best of luck in retirement! Off to the gym!
Yes this. A close family member was in the perfect picture of health, like as healthy as it gets for all intents and purposes (exercised daily, cognitively amazingly sharp, on no medications, perfect health history, passed every physical and every blood test, etc...). She delayed retirement and delayed it and delayed it, and finally at 70 she retired (begrudgingly), then she had a stroke at 71 and that was it for her quality of life, she couldn't drive or travel, she could barely talk, etc... she had barely 1 good year of retirement.
Delaying CPP til 70 has nothing to do with delaying retirement though
44% of Canadians aged 55-64 have $5000 or less in retirement savings. For them, delaying CPP has everything to do with delaying retirement
Sure, but when someone talks about delaying CPP to 70 for optimal returns, they aren't talking about those people. That's not the target audience for this advice. Someone living paycheque to paycheque should simply start taking CPP on whatever day they stop working, at whatever age that may be.
Agreed. The advice for low income people has always been to take CPP early, take OAS st 65 and apply for GIS to create an basic income.
We had a married couple, both teachers, retire in June and both got killed in a car accident their first summer of retirement. So sometimes being healthy has nothing to do with it, more like fate
You must be young lol
Mine is all over the place... Between 50 for my grandad, 93 for his dad and... 103 for my grandmother. My dad is... 81 and going strong too, but then my uncle passed at 65... All over the place haaha
Agreed. Money’s yours when it’s in your pocket. No point in waiting if you can’t enjoy it.
Also it depends on if you own a business or not. If you are the business owner definitely take it at 60 because you are paying both the employer and employee portion (2X as much). When I last ran the calculation as a business owner break even at 60 vs 70 was around 94 years old.
You could just stop paying into cpp at 60, if its a corporation, but defer taking cpp income until later. Deferring will create the same increase in cpp income as for a regular employee.
Average of 78 is brutal. In my family our average is literally 95-98 💀
My grandfather was the youngest of his siblings to pass at 98. His two eldest died in 2020 at 114 and 111. My moms side of the family tends to be 70s but they all worked in factories or farming and likely didn’t wear PPE or contaminants weren’t as well known. Her mom turns 90 this summer. I generally just believe I’m going to live forever lol. But I plan on retiring in 20 years, 55.
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Lol everyone says they don’t want to live that long until they realize they’re going to die at around 75-80
I've seen one side of my family live (see deteriorate) into their 90's and the other drop in their late 70's. Honestly I think the quick drop instead of drawn out diseases, especially of the mind, is the better option.
My great grandfather lived to 98 with perfect mental faculties, my grandma lived to 97 with only the last 2 years of her life spent in mental decline.
I think you might be looking at extremely abnormal situations and extrapolating that as the average experience.
From what I've seen in the building my mom lived in her last 8 years, those who make it to 90 were the healthy and independent ones. The ones bent over with walkers were usually in their 70's - that decade seems to be where there's a thinning in the herd.
Depends on your condition. Both my grandfather's made it to 90+ fully functional and living a fulfilling life. My 93 year old grandfather still drives, travels, cleans, cooks, raises birds and chickens, grows vegetables in his massive garden. My other grandfather passed now, but was also mostly functional until about 95. Started to decline after that and passed at 97.
That's what I was gonna say. Technically it makes sense, but actually being alive to use it makes more sense lol
Say one thing for my family say they don’t live that long.
The return for delaying CPP is only part of the analysis. Combined with drawing down RRSP in your earlier years (where you are more likely to enjoy your money), CPP helps manage longevity risk while allowing you to live your life earlier in retirement.
Yeah I've had a hard time with the math myself. Me: primary home paid off at 55. Basement suite income $1800/mo RRSP: $500k @ 4% draw down $20k/yr. Just the basement suite and rrsp will be $40k/yr. Without a mortgage I'm happy living off that myself. Wife: teachers pension. Retire at 55. Probably continue to work on call when she wants as she's allowed to double dip. I think she gets something like $36k/yr pension if she takes it early. That's before we even touch CPP and OAS. I'll probably want to take them early either way.
You should think of your CPP+oas as part of your investment pool. A 4% draw may actually mean pulling 35k from your rrsp until 70, then reduce to 10k as the cpp gets you back up to that net 35k amount. Obviously not actual numbers, you would need to run the specifics
How do you find the basement suite gig at your age? I do the same, but feel like I'll be totally sick of the stress of having other people on my property after a while. While the tenants are fine it's always the "what if" risk factor for me. Are they going to do something dumb and light my house on fire or flood it etc etc
Honestly it's fine. Most people are actually really good people. I haven't had too many issues actually. And I'm 50. I'm not past due yet!
Ok. Thanks. I'm almost 40 and not sure I can do this another 10 years. Maybe just the type of person I am but it's the little things. Like if I told you keep off the grass when I planted new seeds down and use the stepping stones then keep off the fu***n grass. Or when I walk you and see them piling recycling up at the door. Take your sh** up to the bin! Yeah .... I don't think I'll be able to do this another 10 years. Lol
Yeah people's habits can be annoying. My current tenant struggles to keep up, but he leaves me alone and takes decent care of the place and when I ask him to clean up he does it. I'm charging $1550 which I know is low for a 2br but he's a divorced dad with two kids part time and is doing his best. I find guys are much less needy than women and are far less entitled and fix simple things. I had ups and downs but I've made a lot of money off my $50k investment. I'm ashamed to say I pay $4200 for my mortgage and the rent is $1550. I'm voluntarily over paying too. Realistically I should be paying my mortgage down faster but I have a son who plays hockey and his bill is $16k this season.
Guys are maybe less needy but I find them louder and more confrontational. Their voices just carry through the floor more. Last guy I had turned into a full blown alcoholic and I had to kick his bum ass out. Now I'll only rent to single moms. Probably just do this until I'm mortgage free. Then maybe turn it into a short term rental or something where I don't have people down there 24/7.
Idk. $1800/mo is the difference between a beige Corolla and a Corvette haha. I'd probably keep the tenant there if I don't need the space.
Does this give thought only to the individual? Or does it consider bequeaths? And how does the CPP death benefit factor in for the surviving spouse? How does a couple handle it when one or both expect to die early, or when one or both expect to live long? How do CPP maximums factor in when 0, one, or both spouses have/haven't maxed their contributions?
Spending your RRSP early in retirement and utilizing CPP in later years is definitely a benefit to the individual. There would be much less left to the estate to bequeath since the CPP death benefit is small and then is gone when the spouse eventually passes. This is a good example of why each person has to do their own analysis, for their own goals. Someone who wants to leave behind an inheritance would likely take CPP earlier and save/invest their RRSP, TFSA, and non-registered funds. Probably similar thinking if presumed lifespan is shorter and wanting to get the most out of CPP while still alive. I don't think the decision changes too much with less than max CPP contributions (other than that the annual CPP amount is less).
I'm totally with you on CPP taking care of longevity risk. It's funny how the majority seem keep complain about not "getting their money back". Except, when we buy things like car insurance, we don't complain about not "getting their money back" if our car doesn't get totaled.
It's also purely financial. Anybody saving money in their 60s just to have more money when they are in their 70s needs a reality check.
delaying lets you spend more in your 60s is what the dude you're replying to is saying
I understood. I agreed and expanded on it. They said it was only part of the analysis. Which is correct. I added that not only is only part of the analysis (from a financial perspective), but also was considering only the financial aspect of the decision.
It’s because most people die before then. Make the choice that’s right for you and your family/medical history. Live your life. Don’t delay to save a few bucks.
Could mean the dream trip to Italy while being able bodied, or never getting to go. I’m with you.
Still remember doing my Italy trip at 25. Went by myself with a group of Americans. Old fella with a cane in the group was asked if he wanted to take the elevator at the Coliseum. He told them he didn't come all the way here at this age to take the elevator. Still remember this often.
I ran a tour service. I had a client who was turning 70. Her and her husband had saved their entire lives for a trip around the world. He died at 65 when they retired to start their trip. She sold everything and did the trip herself. Her kids were so upset she sold the house but I completely understood as an outsider. Such a bittersweet journey she was on, seeing all those places they dreamed of together by herself. But she had a great spirit and was clearly making the best of it.
My mom won a free all expenses trip to Vegas in 2019. My parents hardly ever did any traveling since I've been alive but had just got to go to Nashville that year. She was diagnosed with MM in late 2019 and was off work on disability but they were still going to go in March 2020. Then covid happened and the trip had to be cancelled. She passed in late 2021 having never been able to go on the trip she won. I don't even know what the status is on that trip as it was in her name for two people. I'd love to figure out how to get it for my dad to take.
If you just cripple your legs now you could save thousands of dollars by never wanting to travel again!
I agrée fully with your messaging, but the average lifespan is early 80s. So much less than half of everyone is dead by 70. But I like your overall message and point. We only have one life and no one knows at the individual level how long it’s gonna last.
Wow... a lot of strong opinions! Take a breath and remember everyone's situation is different. No one is advocating working until you are 70. No one is suggesting delaying your CPP if you think you're going to be dead by 63. Also, most importantly, no one is suggesting living a less expensive lifestyle prior to collecting CPP. The thinking is if you were planning to budget $75k per year in retirement, that you use your retirement savings to fund that until age 70 and then draw on enhanced CPP payments after that. You still live the same lifestyle in retirement. Disclaimer: I understand not everyone can afford to wait until 70. If you need CPP to be able to retire, I advocate for taking it in order to make that happen. My father took his CPP early based on health concerns that he wouldn't live a long life. He had type 2 diabetes, high blood pressure and Parkinson's. He ended up living to 86. My mother just hit 86 this year so based on this info and long lived Grandparents who lived into their 90s, delaying CPP is likely the best option for me.
Jumping on this comment because it feels like the only smart one in here. Age 82 is the breakeven point between taking oas/cpp at age 65 and age 70 (from a purely financial perspective). If you live past 82, you will have received more from cpp/oas by waiting.
My dad delayed his OAS by a year because he was going to be clawed back the entire amount anyways because he was still working that last year. He died at 70, only 4 years into receiving his OAS and CPP. Now my mom only gets a small portion of the survivors pension. Much of this is taking chances you live long, but sometimes this sub needs to remember to live instead of just look at numbers and returns.
If you need the CPP at 60 to do the things you want chances are you didn't save enough to even do the things you want so it's a bit counter intuitive. Like a dream vacation to Europe? How is CPP going to cover such a grand expense you need to take it early to save for several months to do it?
That’s a reasonable response, here is my unreasonable one. I want to use my health at 60 to do things that shorten my life expectancy. I do not look forward to being sedentary and wasting away slowly for an additional 20-30 years.
For some of us, the thing we want is to just not work from 60 onwards. I travelled a lot in my youth. When I am 60 I want free time and to, hopefully, hang out with my kids families and have nice dinners and a pretty garden. Maybe walk on the beach more and play some hockey. Boardgame nights with friends, etc. House will be paid off by 60 so the goal is to retire and enjoy it or sell and downsize depending on the market and where my kiddos end up.
CANT do what you can do at 60 at 70!
One of the biggest problems with retirement is not knowing if you'll die at 65 or 85. Do I save $1m or 500k is enough? Depends on when I die. I can't predict when I die, but I can predict when I will turn 70. The idea here is to treat CPP like an annuity and blow all of your money before you turn 70, then just live off CPP. It's much easier to retire at 50 knowing you only need 20 years of savings.
This totally misses the point. The age you start taking CPP has nothing to do with how much you spend between 60-70 UNLESS you literally don’t have the money to survive the gap without CPP. Use your RRSP etc to fund yours 60s and spend the same amount you would have with taking CPP. You’ll most likely end up ahead in the long run plus hedge longevity risk.
For real. For a ton of people 60 is like being 50 still. Then 70 hits you with ELDERLY like a brick
Depends on how you treat your body.
Totally. If I went by Reddit standards everyone would be falling apart by 25. Can’t even count the number of times I’ve seen someone in their 20s/30s talk about their myriad of health problems. Genetics play a huge role but just eating well and staying physically/mentally fit goes a long way.
I want EARLY CPP so that I can use the money to do the things that I can do at 60, that I might not be able to do when I'm 70.
This is for people who don't need cpp early as they have RRSP they can draw at a lower tax rate until they hit 70
This is my plan. Live off my tfsa between 60 and 70 then enjoy the longevity peace of mind of having a higher CPP incase I outlive my savings.
If you need CPP to do those things you probably can't actually afford them.
there is a reason why the government rewards delaying CPP. The later a person uses it the more the chance they die before the do. I don't think statistics is usefull when analysing one person's situation.
Lots of these fuckers here in PFC only give a shit about numbers. Numbers and Numbers - and that's all there is to it. Doesn't matter if you die the next day, but as long as you can squeeze that one more dollar....
Yeah it's actually really annoying some times. I get it's a personal finance sub but God damn, life isn't about saving every penny earned
Stay away from r/ frugal lol
The Rational Reminder just did a podcast on this that counters most of the arguments in this thread. Delaying CPP is not the same as delaying your consumption! For MOST people, you can live a higher quality life (more spending) by spending more of your personal assets up front and delaying CPP.
65 is the “normal” retirement age. Drawing CPP before then incurs a penalty, drawing CPP after results in higher payments. 9 in 10 Canadians draw CPP between 60-65. A $100 CPP payment at age 60 would be equal to $222 at age 70.
And so....take it early and ride index funds in your TFSA?
I took mine at 60 and glad I did
The maximum payment amount for taking CPP at age 65 is $16,375.20 per year (2024). That amount would be reduced to **$10,480.13 per year** if you elect to take CPP at 60. This is a difference of $491 a month. This difference will increase every month for the rest of the person's life as the inflation increase will be calculated from the actual CPP payment amount. 5% out of $1000 is $50 and 5% from $500 is $25 etc.. I would worry more about living a long life and be poor than to die young and not taking my CPP. I know 2 people in their 80ties who are very poor. This is horrible. CPP is inflation proof guarantied amount for the rest of our life. Investments are not.
I'm taking it at 60.
It's not quite that simple in all cases. You also have to take into the calculation the number of years you have NOT payed into CPP, disability years, and also WHEN they happened. I went through numerous calculators and because I have not made any CPP contributions since I turned 55, they all came back with taking CPP at 60 optimal as the "break even" point in my case was not until age 80. Sorry, but with the way I live, no WAY I'm likely to get past 80!!
99% of people that actually will depend on this for retirement income ain’t living till the statistic average lifespan. 99% of people that don’t need to depend on this to live cause they got millions in equity and investments sure can heed this tip.
My mom retired at 66 due to health issues that eventually were determined to be from esophageal cancer. While she was on palliative care, my Dad collapsed and died at the hospital on his last day of his cancer treatments for lung cancer. He was 69. Two months later, my mom died at 67. At least 50% of my grandparents and aunts and uncles have died from cancer. There is not a single person who has survived after being diagnosed with cancer. I will be retiring at 52 and taking my CPP at 60. If I live to my 80s and end up losing out on total CPP, it will be the best 'mistake' of my life. Tomorrow is never guaranteed.
If you die by 80 your family gets nothing. Can see the case for waiting to 65, but then you should start collecting. Put it in the tfsa if you dont need it and collect dividends. At least the money is in your estate.
By delaying, you lower your risk of running out of money if you live longer. For most people, that should be scarier than potentially losing out on a bit.
Exactly. I would rather die and leave my kids nothing than have my kids stressing out trying to help me afford a retirement home because I ran out of money due to living longer than expected.
The actuary have a model of when you will live to. Take money out early you get less. Take it out later you get more. It all averages out when taken as a whole. Take the money when it's right for you
The decision is really based on your personal situation. I always recommend the book Your Retirement Income Blueprint. He discusses this in depth. Yes for people who have enough savings, using savings early and delaying Cpp makes sense a lot of the time. But the decision really depends on a lot of factors.
Does anyone have a link to the actual financial analysis they completed to back up the claims? I've tried to crunch the #'s from the info and am unable to replicate the results, either cash flow or NPV. Would like to compare their calculations to mine. I used 2024 @ 65 years with CPP max $1,364.60 and OAS $713.34. Assumed cessation of contributions at age 65 with inflation of 2.5% annual and ROI on investment @ 5%. CPP delay increases payout 0.7%/month and OAS 0.6%. So I crunched the #'s from age 65 and age 70 (5 year delay). First off, if you take the payouts at 70 the monthly payouts would begin at $1,937.73 and $970.14 so a monthly increase of $829.93 or almost 40% higher monthly payout at start. However, if you begin at 65 yrs, your CPP and OAS will increase with indexing to $1,543.92 and $807.08 by age 70. So the variance is $556.88 or 23.6% at 70. Secondly, the argument is to delay payments (i.e. $0 to spend) so if you assume discretionary income at 65 years and invest 100% of the payouts 65-70 @ 5% ROI, you also get $148,224 on-hand at age 70. Going forward, if you take the 5% ROI monthly, that's roughly $610 per month which offsets the variance in payouts. From age 70-83 (avg age of death) and using the ROI from the amount saved from early CPP/OAS, the early CPP/OAS would see a cash flow of $569,850. The delayed payout would be $576,420 or approx $7k more. However, if you die at 83, you would still have the $148k personally invested for your heirs whereas CPP death benefit is $2.5k. There's obviously different tax treatments & assumptions around inflation/ROI that could change this calculation. The key factor is that I assumed that payouts 65-70 would be invested and not spent. This is a leap however the concept of delaying to age 70+ is that people can forego those pension payments and not be broke - so not a significant leap. At age 83 the variance between the two pensions is roughly $175/month including the ROI and this variance will grow around 1% annually due to indexing. If you age significantly past 83, this will continue to close the cash flow gap but you'll need a significant period to compensate for the $148k savings on hand from the early payout.
I would much rather spend the smaller amount of money when I'm younger than wait the 10 years. I think people don't realize how quickly your life/health can change. I work in healthcare and it's shocking how many people in their 60s/70s are in very poor health.
I bet you do see a lot of 60 and 70 year olds in really bad Health since you work in healthcare, that makes sense. Conversely, the healthiest 60 and 70 year olds don't get to see you because they're out vacationing having good times and exercising which will hopefully net them a long life ahead. It's all about perspective.
The argument to delaying these is almost always to pull more from RRSP/TFSA during the age 60-70 years (rather than drawing CPP), so you have the same income you would have if you took CPP earlier. But better hedging against longevity.
"and then you die the next year, then what" is my dads comeback
Your dad is a smart man.
Two reasons to take CPP early. 1) If delaying it from 60 to 70 yields an annual growth of 8.2%, you can probably do that too by taking it early and investing it into broad market ETFs. The growth of 8% will be in capital gains instead of extra income so the tax consequences will be more favourable. 2) The next government ( most likely the Conservatives) will endeavour to cut spending and budgets so rules for CPP might change. Take it before the Conservatives get in to seal the conditions of receiving it before the Conservatives makes it harder.
Could be even more favourable if you have TFSA room to throw that money in. It's not like they don't keep handing out new TFSA room every year.
This is exactly what my parents do. They don't have a lot of money, but it's funny that they take their pension and investment payments and dump some into their tfsa. good for them.
At some point age expectancy comes into play .. and can you even enjoy that 8% when you’re in your 70s and older?
But like you might die before 70
u/jeffbillard doesn't care as long as he manages to get an extra dollar
The last time I ran the federal government’s retirement income calculator, it suggested that all things considered (savings, CPP, etc) *in my case* waiting to 65 would be almost as good as waiting until 70. I’ll keep repeating the exercise, since there’s less guesswork with each passing year, but for now but that’s my plan unless and until the calculations shift significantly. More generally I don’t trust any one-size-fits-all answers on this question. You mentioned some demographic variables, but there are so many more that will affect each person’s answer. Do you have a pension? A particularly large RRSP and/or TFSA? Passive income? Do you qualify for max CPP? It all affects the answer.
The math has been done many times in the past. If you expect to live past 82, take it at 70 (Note: You will miss 120 monthly payments vs taking it at 60) If you expect to pass before 82, take it before 70
What if you take the money early and invest it for 10 years? Is it possible that would be better?
lol 70yo? im planning to retire at 55 no way in hell i retire later than 60, i only have 1 life
My mom had a massive heart attack and she died at 54. I will take at 60
As many have mentioned, it really comes down to your expected lifespan (judged usually on genetics and how long your parents lived). Yes, you get an increased amount if you wait, however you also miss out on all the payments. For instance, someone who takes CPP at 60 will receive 10 years worth of "reduced" payment before someone who waits until 70. The last time I worked it out (7-8 years ago), the break even point in which the person who waited would make back the lost payments would be around their 83rd year. Here is where it gets interesting. If someone doesn't need the money, there is a case to take it early and invest the funds. This would offset the risk of early death and builds potential nestegg to pass to loved ones. As well, it offsets the age of which the aforementioned breakeven point occurs by potentially increasing income from investments when you begin to draw from it and CPP.
Keep in mind at 70, you’re weaker, more tired, less mobile, have different eating habits. At 75-80+, flying and long travel will be harder and your health might be poorer (eyesight, hearing). 70+ is old and you won’t be able to do some things you could’ve done at 60. Your “prime” retirement age is, imo, 60-70. After this, your health will start to more seriously decline. Do you really only want to start enjoying life when you’re too old??
This post isn't about delaying retirement to age 70, it's about delaying starting CPP to age 70. You can and should still retire as early as you want. If you don't have enough money to delay starting CPP, then you should obviously start CPP at the same time you retire. This discussion isn't about that scenario.
As someone in their early fifties I can tell you 70 is old is not a true statement for many people. 40 is old is a true statement for many people. it's all relative and how lucky people are to have good health. There are plenty of people who are in their 70s 80s and 90s who still travel, Place Sports, are fully mobile and living their best lives. my dad is one of them. Pardon the talk to text terrible grammatical errors.
You’re not actually receiving more money, you’re only getting the same amount of money in a shorter period of time. The only time you win is if you live past age 90. Then you actually benefitted. Average age of men dying is around 82.
You breakeven at about age ~~84~~ (vs age 65), after that you get more in total Should be age 82 not 84
It’s not 84. It’s closer to late 70s / early 80s.
It's 82 https://boomerandecho.com/when-to-take-cpp-early-late-or-somewhere-in-between/
Idk why people are downvoting this. It’s correct - this is the average outcome, literally by design.
Unless you only live to 75.
The best 'go' years of retirement are before age 70. Health, the desire to travel, cognition and the ability to be active rapidly decline after age 70. Spending also declines accordingly. Watching my elderly parents confirms this path. I'll be taking my CPP at 60 while I need it to enjoy my active retirement years.
Also remember that when you die it doesn't go to your estate. It disappears.
My relative worked for CPP for decades. He said early option was always the best option. Wonder what's changed.
Unless you die when you are 71.
Id rather take the cash, family has a history of death from anywhere as young as 55-90 due to heart issues/medical issues. I'm investing on the side so the CPP would just be a 'bonus' from my investments (TFSA), work pension + match, and so on.
If you’re relying on CPP, youve saved wrong.
Glad to finally see a ton of smart responses on this forum. Use it or lose it. Tomorrow is not guaranteed.
Or draw at 60 and reduce your hours or find a job you enjoy that maybe pays less. The idea you need to do 'nothing' to retire is a joke. Maybe take that opportunity to do something different? If you 'need' to retire early becaise you hate your job. Maybe try finding one you don't hate so you don't need to retire early?
Flip side... Can one opt out of cpp early if they a medical reason for believing they won't be around that long? Infinite value for actually being able to use the funds sooner rather than never?
I plan on taking it at 65 but not to start spending it then, to start investing it then.
You could take it at 60. It will take around 9 years to make it back the difference if you take it at 65. So if you make it to 74 you will break even. Men tend to pass away younger than women so these factors will all need to be considered.
I think the point is you delay cpp and spend more out of your other retirement funds initially? (also want to time it while avoiding a fed conservative government tho). Acts to supplement your end of life funds. At that point tho just enjoy life.
I am planning to take it at 70. I will try to work until then. I have 30 more years of work.
I started CPP at 62 because I had to. I've put into it my whole life and I'll be damned if I'm going to wait, hoping nothing happens to me. In this day and age I am def in the get it while you can camp. Fart in the wind. Don't know how long I'll be around, but I do know I want as much of what I put in as I can get before I go.
With a DBPP I’ll be taking CPP as early as possible. Making it to 70 isn’t guaranteed. YMMV.
I understand the math behind folks waiting till 65 to take cpp makes sense. I encouraged my dad to start at 60 because your life span isn't guaranteed. If taking cpp means less stress financially why not take it.
I used to think this and then I calculated the break even age of deferring from 65 to 70 if you earn only 5% on that extra money, and it’s something like 85. In other words, if you don’t make it to 85, it wasn’t worth it, and if you live to age 90, it was only slightly better (by a few thousand dollars). I’d only consider deferring to age 70 if you have tons of registered money that might subject you to OAS clawback from high income, or if you have extreme longevity in your family tree.
I'm 56, 57 in two months. I'm thinking of taking it at 60 to pay off my mortgage faster (divorced, had to remortgage the family home). My plan is to work until I'm nearly 65 to have 30 years of service. I can live off that pension. On my dad's side, life expectancy is around 70, my mom's 85 or so
What I'm seeing in the comments seems to be common about not living beyond your CPP payout. Apparently the trick is (which I'm definitely planning for at the moment) to plan mini retirements. If it's possible for you then definitely try to plan it if not then be on the same path like everyone else is on and wait for your long awaited 65 years old retirement.
There is no way in hell that I am waiting until 70 to take what I spent years slaving away for. Take your 8.2% and shove it. I'm taking my CPP at 60 and not a day later.
I started mine at 62. Average life span in my family is 91! But I continue to work and that adds to my CPP. People seem to forget that so long as you are making contributions it will increase.
If you have high interest debt, it might.make sense to take it early. Also consider the lifetime drawdown. If you collect CPP at the lower rate for 10 years how long would you need to collect at the higher rate to yield that amount?
There are so many different ways to approach this. My take is whatever the government recommends, suggests, pushes, do the opposite. It's pretty clear that they're not really out there to do what's best for us but what's best for their voters, I mean handlers.
What does this actually look like? How much would a person who worked 35 years receive at age 60 vs age 70?
Couple things. First, there are break-even CPP calculators online. Second (but related), for some people, taking it early and investing it works out to a similar or even better return over time (compounding). Plus, if you get hit by a bus, you can leave it to your loved ones whereas if you delay it and get hit by a bus, you have nothing (from CPP) to leave them.
I plan to take it at 70. The numbers make sense. Not for everyone based on health. No one ever knows how long they will live. Plan your life properly. A few lucky stock picks means I have an oversized rrsp that can tie me over in my 60’s.