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CPP changes: Will you retire later? Add to ...

The later you retire, the less savings you will require to supplement your pension income. And now, with changes to the Canada Pension Plan being phased in starting next year, there is even greater incentive to stay employed longer.

Tina Di Vito, head of the BMO Retirement Institute, was here to answer your questions about what the CPP changes mean for you and how you should factor them in when choosing your retirement date.

Ms. Di Vito has calculated that, under the new system, the annual payment for a full CPP will be about $4,000 less if one decides to start collecting at age 60 instead of 65, and about $4,600 more if one decides to wait until age 70.

Assuming 100-per-cent eligibility for CPP and a life expectancy of age 90, Ms. Di Vito says someone who takes CPP at 60 will receive 64 per cent of the full benefit for 30 years, for a total lifetime amount (ignoring inflation adjustments) of $215,233, while someone who takes CPP at 70 will receive 142 per cent of the full entitlement for 20 years, totalling $318,365. That's a $100,000 difference if you wait an extra 10 years to begin collecting CPP.

For a transcript of this discussion, click the box below. Mobile users can view it by clicking here.

An earlier version of this article stated you must work an extra 10 years to receive $100,000 in additional CPP benefits. It has been corrected to state that you must wait until age 70 to begin collecting CPP in order to receive the additional benefits.





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