CPP for the over 65 and still working

There are really two decisions that you are faced with concerning the CPP for the over 65 and still working:

  1. Should you apply to receive your CPP retirement pension at age 65 or wait until you stop working, or even until age 70?
  2. If you decide to start your CPP retirement pension at age 65, should you continue contributing to the CPP?

In this article, I’ll try to give you enough information so that you can decide when to start receiving your CPP retirement pension. I’ll deal with the decision as to whether to continue contributing to CPP beyond age 65 shortly, in a separate article.

BooksSome of the factors to consider in deciding when to start your CPP retirement pension are:

  • How badly do you need the money now?
  • What are your future income streams?
  • How long do you expect to live?
  • What is the “breakeven point” for waiting versus applying now?

Related article:  Should you take CPP early? 

The breakeven point past 65 

To determine your breakeven point for yourself, you must have a good understanding of how CPP benefits are calculated.

Related article:  How much will you get from CPP?

To calculate an exact breakeven point, you would need the following:

  • Your current CPP record of earnings and contributions, which is available online:
  • A good estimate of your future earnings up to age 70
  • An accurate way of calculating your CPP retirement pension under various scenarios (you can try using the online calculator at service Canada, or you can leave a comment below.

Before deciding when to start your CPP retirement pension, an individually calculated breakeven point is important if any one of these factors applies to you:

  • Your CPP record of earnings shows nil contributions for more years than you can “drop out” in calculating your retirement pension.
  • Your earnings after age 65 will be significantly lower than your previous “average lifetime” earnings.
  • Your earnings after age 65 will be significantly higher than your previous “average lifetime” earnings.

For most people, however, an approximate breakeven point is sufficient, and that can be determined using the following table (which uses the maximum CPP entitlement for 2015 as the “Monthly CPP”):

Approximate CPP Breakeven Points for Ages 65 to 70








Monthly CPP$1,065.50$1,154.46$1,243.92$1,333.98$1,422.84$1,512.30
Adjustment factorn/a+8.4%+16.8%+25.2%+33.6%+42.0%
Amount of increasen/a$89.46$178.92$268.38$357.84$447.30
“Foregone” incomen/a$12,780$25,560$38,340$51,120$63,900
Breakeven (months)n/a143143143143143
Breakeven (age)n/a7879808182


  • Monthly CPP: Maximum amount of monthly CPP retirement pension that anyone would be entitled to receive in 20153, at the age indicated.
  • Adjustment factor: 0.7% for every month delayed past age 65, to a maximum of 42% at age 70.
  • Amount of increase: Amount of monthly CPP retirement pension received at delayed age, minus amount that would have been received at age 65 ($1,065.00).
  • Foregone income: $1,065.00 times number of months delayed.
  • Breakeven (months): Foregone income divided by amount of increase.
  • Breakeven (age): Age at which CPP starts plus number of breakeven months/12.

Related article:  CPP Breakeven points for taking CPP early

A case study

If Alfred is eligible for a maximum CPP retirement pension at age 65, he can choose to apply immediately and receive $1,065.00 monthly.

If he chooses to wait until age 70, his monthly CPP retirement pension would be $1,512.30 (an adjustment of 0.7% for each of the 60 months that he delayed, for a net increase of 42.0%).

He would have foregone the opportunity to receive $63,900 in CPP retirement pension (60 months @ $1,065.00 monthly), in exchange for an increase of $447.30 in his monthly CPP retirement pension.

The number of months it would take him to break even is calculated by dividing the amount of pension forgone by the increased amount that he would receive if he started receiving CPP at age 70:

$63,900 / $447.30 = 143 months

Age 70 + 143 months/12 = 82 years old.

His breakeven age would be 82. At age 82, he would have recouped all of his foregone pension and he would be ahead $447.30 monthly, from that age forward.  If he dies before age 82, he would have been better off in strictly dollar terms if he had applied for his CPP retirement pension at age 65.

As you perhaps noted in the above table, the number of breakeven months remains constant at 143 months. This basically means that if you don’t apply for your CPP retirement pension at age 65, you will have to live for approximately 12 years after whatever age you do apply for it to start, in order to catch up on the CPP retirement pension that you have “foregone”. After those 12 years, you will be further ahead by having delayed the start date of your CPP retirement pension beyond age 65.

Written by Doug Runchey

Doug Runchey worked for the Income Security Programs branch of Human Resources and Skills Development Canada for more than 32 years, and was a specialist in the Canada Pension Plan and Old Age Security legislation, regulations and policy areas. He now runs his own company, DR Pensions Consulting, which provides pension advice, including detailed calculations for CPP retirement planning and “credit splitting” purposes. Doug can be reached by email @ DRpensions@shaw.ca or check out his website at http://www.drpensions.ca/.

8 Responses to CPP for the over 65 and still working

  1. I don’t have anything to add other than praise for an excellent article. I love articles that are completely unique in terms of content, that include an analysis to answer a question we need to know – great job, and thanks!

  2. Does the .7% adjustment apply to the CPP amount that you would have gotten @ age 65, or to the CPI adjusted CPP amount for the year in which you choose to finally start taking CPP?

    If CPI averages 2% annually the $1012.50 value at age 65 would have increased to $1959.25 by age 70. An extra $946.75 per month.

    If that is the case the breakeven months would be reduced to 64.

  3. Gary
    Thanks for the questions!
    The .7%/mth adjustment applies to the calculated retirement pension for the year in which you choose to finally start taking CPP. That could be different from your calculated age-65 retirement amount, either because your earnings during that “wait period” increased or decreased your average lifetime earnings, or because the 5-year average YMPE (not CPI) had increased during that period of time. You could try to factor the YMPE increases into your breakeven calculation, but it would be quite complex, and could be less accurate if you don’t guess accurately.
    I don’t follow the math on your 2nd question? Increases in the CPI affect benefits in pay, not future benefits (as explained above). That means that if you want to factor in CPI changes, you would have to apply that 2% annual increase to the “forgone CPP benefits” that you would lose by waiting until age 70, which would increase not decrease your breakeven calculation. Even so, I don’t see how a 2% annual increase would ever get you up to an amount of $1959.25?
    Overall, you are correct suggesting that increases in the CPI (and the YMPE) should be taken into account if you wanted to calculate a truly accurate breakeven period. Unless you have a crystal ball however, I would question the value in doing so. You also run the risk of comparing apples to oranges however; as it’s one thing to tell somone what amount their pension will be in the future, but that wouldn’t be relative to today’s purchasing power.
    Again, thanks for the questions!

    • FWIW, on this last comment: I found that on average the growth in the YMPE exceeded the CPI. Over the past 5 years, CAGR for the YMPE was 2.62%, vs. 1.64% for CPI. (10 yrs: 2.50% vs 1.75%. Inception: 5.07% vs. 4.26%.)

      The difference arises because YMPE growth is driven by the increase in the average industrial wage, a measure different than the CPI that’s used to increase a benefit that already started.

      So in theory there _may_ be a small additional benefit to postponing CPP beyond the increase afforded by the more obvious 0.7%/month late retirement increase.

      That being said, this excess historical growth in the YMPE over the CPI is small, variable, and certainly not guaranteed.

  4. What this doesn’t do is include the potential interest earned when taking CPP at age 65. If you assume some rate of interest and invest what you receive from CPP then the break even point is moved out, a lot.

    • Don

      You’re right that including potential investment interest would extend the breakeven points, but if you’re going to do that you should probably also factor in CPI increases which would reduce the breakeven points.

      For the purposes of this article, I think that ignoring both factors makes it more applicable to the majority of situations.

  5. Are you available for a consultation.

    I will be 65 next March, wish to collect my OAS and CPP.

    My advisor wants me to wait till I am 70.

    I am not comfortable with this.
    Gladys Cook

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