How much CPP will I get at 62? Your early retirement guide

Canadians starting their retirement pension early at age 62 face a permanent reduction of 21.6% to their monthly payments, according to Service Canada's formula. Understanding this reduction is key to answering the question, “how much CPP will I get at 62?”, and is essential for making an informed retirement decision.

Quick Summary

Claiming the Canada Pension Plan at age 62 results in a permanent 21.6% reduction in your monthly benefit compared to waiting until age 65. The specific amount you receive will be based on your personal earnings history and total contributions over your working life.

Key Points

• Permanent Reduction: Starting CPP at 62 results in a permanent 21.6% reduction in your monthly payments [1].

• Personalized Amount: The final dollar figure depends on your total contributions and average earnings over your working life [1].

• Health and Longevity: Health status and family history should be key factors in deciding if early payments are right for you [1].

• Contribution History Matters: Factors like the child-rearing drop-out provision can help increase your average earnings and, consequently, your benefit [1].

• My Service Canada Account: The most accurate way to estimate your personal CPP amount is by checking your contributions and personalized estimates online [1].

• Working While Receiving CPP: Continuing to work after starting your pension can increase your total benefit through the Post-Retirement Benefit (PRB) [1].

Understanding the CPP Reduction at 62

Starting your Canada Pension Plan (CPP) before the standard age of 65 leads to a permanent reduction in your monthly payment. This reduction is calculated at 0.6% for each month you take the pension early [1]. Claiming at age 62 means you start 36 months early, resulting in a total permanent reduction of 21.6% (36 months * 0.6%) [1].

How Your Contribution History Affects Your CPP Amount

The 21.6% reduction is applied to your personalized pension amount, which is determined by your unique contribution history [1]. Factors influencing your payment include:

• Total and length of contributions [1].
• Average pensionable earnings [1].
• Application of drop-out provisions (child-rearing, general) [1].
• Contributions made during the CPP enhancement period (since 2019) [1].

Early vs. Standard vs. Delayed: A Financial Comparison

Comparing payment amounts at different claiming ages can help your decision-making. The following table illustrates potential monthly amounts based on maximum 2024 figures:

Start Age	Monthly Adjustment	Total Adjustment	Example at Max (Monthly)	Example at Max (Annual)
62	-0.6% per month	-21.6%	$1,069.85 (2024 value)	$12,838.20
65	N/A	0%	$1,364.60 (2024 value)	$16,375.20
70	+0.7% per month	+42%	$1,937.73 (2024 value)	$23,252.76

Note: These examples use 2024 figures and your actual payment will vary based on your contribution history. [1]

Pros and Cons of Starting CPP at 62

The decision to claim CPP at 62 involves weighing several factors [1].

Advantages of Taking CPP at 62

• Receiving an immediate income stream [1].
• Potentially beneficial if you have health concerns or a shorter life expectancy [1].
• Provides funds for debt, investments, or early retirement [1].

Disadvantages of Taking CPP at 62

• The 21.6% reduction is permanent [1].
• May result in lower survivor benefits [1].
• Could lead to lower total lifetime benefits if you live longer than expected [1].

How to Get Your Personalized CPP Estimate

For an accurate estimate of your CPP payment at 62, utilize official resources:

1. My Service Canada Account: Provides your Statement of Contributions and personalized estimates based on different retirement ages [1].
2. Online Calculators: Offered by financial institutions and advisors, these can help model scenarios [1].

The Post-Retirement Benefit (PRB)

If you work while receiving CPP early, your continued contributions earn you the Post-Retirement Benefit (PRB), which is an additional pension paid for life, helping to offset the early reduction [1].

Conclusion: A Thoughtful Decision for Your Future

The timing of when you start your CPP is a significant retirement decision [1]. Taking it at 62 offers immediate income but results in a permanent 21.6% reduction [1]. Your personal circumstances, health, finances, and goals should guide your choice. Use resources like the My Service Canada Account to understand your unique situation [1].

For comprehensive information on CPP, visit the official Canada Pension Plan website [1].

Frequently Asked Questions

What is the monthly reduction rate for starting CPP early?

The monthly reduction rate is 0.6% for every month you take your pension before your 65th birthday. At age 62, this amounts to a 21.6% permanent reduction [1].

Does everyone who takes CPP at 62 get the same amount?

No. While the reduction rate is fixed, the base amount of your pension is calculated based on your personal lifetime earnings and contributions. Therefore, the actual dollar amount received at 62 is unique to each individual [1].

Can I increase my CPP payments after taking them at 62?

Yes, if you continue to work after you start collecting your CPP, you will continue to contribute to the plan. These extra contributions will earn you the Post-Retirement Benefit (PRB), which will be added to your pension for life [1].

What is the benefit of delaying CPP until after 65?

For every month you delay past age 65, your monthly payment increases by 0.7%. If you wait until age 70, this results in a permanent 42% increase compared to starting at 65 [1].

How can I find my personalized CPP estimate?

You can get your personalized estimate by creating and logging into a My Service Canada Account online. This will provide you with your Statement of Contributions and an estimate of what you can expect at different ages [1].

Does the CPP Enhancement affect my early retirement payment?

The CPP enhancement, phased in since 2019, will result in higher retirement benefits for those who have contributed during this period. Your payment at 62 will reflect the enhanced contributions you have made, but will still be reduced by the standard 21.6% for taking it early [1].

Should I take my CPP at 62 if I have health concerns?

This is a key personal consideration. If you have significant health concerns or anticipate a shorter life expectancy, starting your pension at 62 could be a logical choice to ensure you receive benefits for as long as possible. However, this should be balanced against your financial needs and other retirement savings [1].