When should I take my CPP?

The world as we know it is a complicated ball of wax with many moving parts. So many decisions that are not in our control influence the outcome of our journey through life. The good old days of working for the man, retiring with the gold watch and living out our days on a well-earned pension have been replaced by a patchwork of poorly understood substitutes that pale in comparison to the real intent.

The list of programs that most will rely on gets longer each year and each one holds different requirements and conditions designed to include or exclude. From Old Age Security (OAS) which may also include Guaranteed Income Supplement (GIS), to the Canada Pension Plan (CPP), these government programs must integrate with your RRSP, DB plans, DC plans, LIRA, DPSP and of course the newest creation the TFSA which recently celebrated its 10th birthday.

The only program that Canadians are automatically entitled to receive is the OAS as it is based on years of residence in Canada. But be aware, if you receive more than the allowable levels of income from all of these other sources, which you or your employer-funded, you will be subject to “Clawback” on your OAS. The explanation is that it is an attempt to redistribute among all in a spirit of fairness. The application of the rules will always be open for debate.

My recommendation for most people is that there are no cookie cutter approaches to preparing for what could be close to half of your life. Each situation is different and the advice from the coffee shop may have adverse effects depending on what information is shared. The tool that I use to explain CPP optimization is attached but to be 100% certain of the decision, I also need to know the day of departure from this planet. So what we are left with is an educated guess based on a thorough discussion. Time is our ally and time is our enemy. The time to start preparing is right now.