Posthaste: This missed CPP opportunity is costing Canadians thousands, says report
Most Canadians — in fact nine out of 10 — say the Canada Pension Plan is an important source of their retirement income and six out of 10 say it’s essential and they can’t do without it.
Yet according to a new report from the National Institute on Aging, the vast majority are not making the most of the government retirement plan.
Canadians can start claiming at age 60, but the earlier you start, the lower your payments. You can defer your pension until age 70 and the longer you wait the higher payments climb.
According to the report, waiting until 70 would more than double your monthly pension than if you start collecting CPP at age 60.
A Canadian with median CPP income and average life expectancy is losing out on more than $100,000 worth of income, in current dollars, by taking CPP at age 60 rather than 70, said Bonnie-Jeanne MacDonald, the NIA’s director of financial security research and head author of the report.
Yet nine out of 10 Canadians opt to take these benefits by age 65 or earlier.
Claiming CPP is easy, but deciding when to claim is not, said MacDonald. Despite being one of the most important financial decisions Canadians will make, two out of five CPP recipients say they didn’t consult anyone or any resources before making it.
“This is a once-in-a-lifetime, high-stakes financial decision, and its complexity leads people to make choices that are not in their best interest,” said MacDonald. “By claiming too early, recipients are reducing the lifetime income security that they report to want and will most likely need.”
The stakes have never been higher. More than a thousand Canadian baby boomers are making the claiming decision every day, and while retirement costs are increasing, sources of secure long-term
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