Cpp at 60 vs 65 Calculator Ontario

When planning your retirement in Ontario, one of the key decisions is when to start receiving your Canada Pension Plan (CPP) benefits. The Canada Revenue Agency (CRA) allows you to start receiving CPP as early as age 60, but there are important differences between starting at 60 versus 65.

Introduction

The Canada Pension Plan (CPP) is a social insurance program that provides retirement income to eligible Canadians. In Ontario, you can start receiving CPP benefits as early as age 60, but there are trade-offs between starting earlier and waiting until age 65.

This calculator helps you compare the monthly CPP benefits you would receive at age 60 versus age 65, based on your years of contributions to the CPP.

How CPP is Calculated

The amount of your CPP benefit depends on several factors, including:

Your average yearly earnings while contributing to CPP
The number of years you've contributed to CPP
When you start receiving benefits (age 60 or 65)

CPP Benefit Formula

The basic formula for calculating your CPP benefit is:

CPP Benefit = (Average Yearly Earnings × Contribution Rate × Years of Contributions) × Pensionable Earnings Factor

The exact calculation is more complex, but this gives you a general idea of how your benefit is determined.

In Ontario, the CPP contribution rate is 5.15% of insurable earnings, up to a maximum of $65,700 in 2023.

Comparison at 60 vs 65

Starting CPP at age 60 means you'll receive a reduced benefit compared to starting at age 65. The reduction is based on the difference between your actual start age and the normal retirement age (65).

Key Difference

If you start CPP at age 60, you'll receive about 71.2% of what you would receive at age 65. This is because the CRA reduces benefits for early retirement.

For example, if your full CPP benefit at age 65 would be $1,000 per month, starting at age 60 would give you approximately $712 per month.

Start Age	Monthly Benefit (Example)	Reduction Factor
60	$712	71.2%
65	$1,000	100%

Factors Affecting Your CPP

Several factors can affect the amount of your CPP benefit:

Years of Contributions: The more years you've contributed to CPP, the higher your benefit will be.
Average Earnings: Higher average earnings during your working years mean a larger CPP benefit.
Start Age: Starting at 60 instead of 65 reduces your benefit by about 28.8%.
Maximum Pensionable Earnings: CPP benefits are based on a maximum pensionable earnings amount, which changes each year.

It's important to consider these factors when deciding when to start receiving your CPP benefits.

Frequently Asked Questions

Can I start CPP at 60?

Yes, you can start receiving CPP benefits as early as age 60, but your monthly payment will be reduced compared to starting at age 65.

How much less do I get at 60 compared to 65?

You'll receive about 71.2% of what you would get at age 65, which is a reduction of about 28.8%.

Does starting CPP at 60 affect my OAS?

No, starting CPP at 60 does not affect your Old Age Security (OAS) benefits. You can receive both CPP and OAS.

Can I change my mind after starting CPP at 60?

Yes, you can change your mind and switch to receiving CPP at age 65. However, you would need to contact the CRA to make this change.