Government Benefits

CPP payments: How much will you get from Canada Pension Plan in retirement?

CPP payments: How much will you get from Canada Pension Plan in retirement?

Canada Pension Plan (CPP) is one of the cornerstones of retirement income planning. Here are the maximum benefits at age 65:

YearMonthlyAnnual
2020$1175.83$14,109.96
2019$1154.58$13,854.96
2018$1134.17$13,610.04
2017$1114.17$13,370.04
2016$1092.50$13,110.00
2015$1065.00$12,780.00
2014$1038.33$12,459.96
2013$1012.50$12,150.00
2012$986.67$11,840.04
2011$960.00$11,520.00
2010$934.17$11,210.04
2009$908.75$10,905.00

Don’t count on the maximum

When planning for retirement, the first piece of advice I give is not to plan on getting the maximum. When you look at the average CPP payment, it’s just a little over $640 per month, which is a long way from the maximum. In other words, not everyone gets the maximum. At the most basic level, the amount you get from CPP depends on how much you put into CPP.

The best way to figure out how much CPP you qualify for is to get your CPP statement of contributions. Call Service Canada 1-800-277-9914 and ask for a CPP Statement of Contributions. They will provide you with access to your online statement.

How to get the maximum?

Why is it that so many people do not qualify for the maximum amount of CPP? The best way to answer that is to look at how you get the maximum retirement benefit. Eligibility to receive the maximum CPP benefit is based on meeting 2 criteria:

  1. Contributions – The first criteria is you must contribute into CPP for at least 83% of the time that you are eligible to contribute. Essentially, you are eligible to contribute to CPP from the age of 18 to 65, which is 47 years. 83% of 47 years is 39 years. Thus, the way I like to look at CPP is on a 39-point system. If you did not contribute into CPP for at least 39 years between the ages of 18 to 65, then you won’t get the maximum. If so, then you might get the maximum but there is another consideration.
  2. Amount of contributions – Every year you work and contribute to CPP between the age of 18 and 65, you add to your benefit. To qualify for the maximum, you must not only contribute to CPP for 39 years but you must also contribute ‘enough’ in each of those years. CPP uses something called the Yearly Maximum Pensionable Earnings (YMPE) to determine whether you contributed enough. Here’s the YMPE figures for the current and past years:
    • YearYMPE
      2020$58,700
      2019$57,400
      2018$55,900
      2017$55,300
      2016$54,900
      2015$53,600
      2014$52,500
      2013$51,100
      2012$50,100
      2011$48,300
      2010$47,200
      2009$46,300
Basically if you make less than $55,900 of income in 2018, you will not contribute enough to CPP to qualify for a point on the 39-point system. For those of you that make more than $55,900, you will probably notice that part way through the year, your paycheques will go up a little. This happens because you have paid the maximum amount of CPP for the year and no longer have a CPP deduction.
 
As you can see, it’s not easy to qualify for full CPP especially with the trend of people entering into the workplace later because of education and people retiring earlier.
 

Related article: New CPP Rules are here

The easiest way to figure out your CPP eligibility is simply get your CPP statement of contributions. Once you have that document, it will list all the years you are eligible to contribute from age 18 to 65. It will show you how much you contributed in each of those years. If you contributed the maximum, it will have the letter ‘M” assigned for that year. All you have to do is add up all the M’s to see if you are eligible for the maximum. If you have 39 M’s you’ll get the maximum. If you have 20 M’s you will get approximately half the maximum (you might get some partial credits for part years).

Planning your retirement needs and income requires some understanding of how much you will get from CPP. Many people either assume they will get the maximum or assume they will get nothing at all because they fear the benefit may not be there in the future. Both these assumptions have significant flaws. Take the time to personalize the planning by understanding how the CPP benefit is calculated and how much you will receive.

Here’s an article give you a more detailed calculation on How to Calculate Your CPP Retirement Pension

For more information on CPP and other government benefits, check out my ONLINE GUIDE to CPP And OAS

Comments

  1. Doug Runchey

    Hi Ginger – You should definitely be eligible for a CPP retirement pension, and you may also be eligible for an OAS pension under the Canada/France social security agreement. Check out this weblink: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-international.html

  2. Donna Alexcee

    I have a question, when a person turns 65, has never worked in his/her life, would they be eligible to collect pension and how much will he/she get

    • Doug Runchey

      Hi Donna – If a person has never worked in Canada, their CPP at age 65 will be zero.

    • Moss

      Certainly no CPP but there would be OAS. And depending on your spouse’s income and whether you had other income, you may be also eligible for GIS

  3. Wendy

    I worked from 18 years to 48 years and contributed to CPP but have not contributed for 11 years now (57 years) Is the CPP statement income accurate? .. since my income last 11 years has been zero? Because so many years have passed will the estimate be based on the projection of zero income in the future?

    • Doug Runchey

      Hi Wendy – No, the CPP estimate won’t be accurate. It “pretends” that you’re eligible now, which has the same effect as projecting your current lifetime average earnings through until age 65.

      • Kevin Lup

        Hi Doug,
        I have a question, I only worked 7 years and contributed CPP(about income 8,000/year)between 2006 to 2016. And I am 49 now and don’t think I will be working until retirement, How much minimum cpp benefit I could receive when I turn to 60 years old? Also how about 65 years old?
        Thanks a lot,
        Kevin

        • Doug Runchey

          Hi Kevin – Based on these limited earnings, you could receive a monthly CPP of approx. $26 at age 60 or approx. $36 at age 65.

        • Anthony Norman

          Hi I played Canadian football from 1980 till 1986….I’m and American…I’m I eligible to receive benefits since I’m 65 how….

          • Doug Runchey

            Hi Anthony – Did you and your family move to Canada and reside here fulltime for those six years, or was your primary residence still in the USA during that time? Did you pay income tax in Canada and/or USA? Did you make CPP contributions on your CFL earnings?

  4. Denis

    Hi Jim, my question. I retired at 55 and don’t plan on collecting CPP until 70. Willi I be penalized for 15 years of zero contributions as part of the calculation? I did have 35 years of max contributions. If I am penalized at which age should I collect? Thanks

    • Doug Runchey

      Hi Denis – You will definitely not be penalized for the 5 years of zero earnings between age 65 and 70, because those 5 years can all be dropped out under the “over age 65 dropout” provision. Similarly, you can drop out 8 of the 10 zero-earnings years from age 55 to age 65 under the 17% general dropout provision. Unfortunately, that means that the other 2 years of zero earnings will reduce your CPP calculation somewhat.

  5. Yeah right

    I have a hard time believing that 20 M’s and 19 more years of contributions that fall just shy of maximum, would knock you down to half of maximum payout.

    • Doug Runchey

      Yeah you are right. Who ever said that would happen?

  6. Javier

    But you have to consider that in order to be paid CPP when living outside Canada, you would have had to contributed for at least 20 years. I see that by working in the embassy -which is considered Canadian territory- you could claim those 10 years, but not more.

    • Doug Runchey

      Hi Javier – That is totally false! CPP benefits are payable anywhere in the world with no restrictions on how many years of contributions someone has. It’s OAS that is only paid outside of Canada if someone has 20 years of residence in Canada after age 18.

  7. Alan Hodgson

    He can get some portion of OAS at 65. OAS is available to everyone, although you have to have lived in Canada for 40 years after the age of 18, and for the full 10 years before you apply, to get the full amount.

    There’s also a fairly generous low-income supplement if that’s all he’s getting, but I don’t know the full criteria needed.

  8. Alan Hodgson

    You don’t get anything if you come here at 67 as a sponsored immigrant. Except free medical care, which could be significant.

    Even GIS won’t pay you anything until you’ve been here 10 years

  9. Alan Hodgson

    You don’t qualify for anything until you’ve been here at least 10 years, afaik.

  10. Moss

    Jim or Doug; please correct me if I’m wrong…

    Sara Fred. If your dad became a permanent resident or citizen in 2002 and lived here during all that time then that is 17 years of residence in Canada. 17 years qualifies him for partial OAS of 17/40ths of the maximum which comes to an additional $258.17 making his total now $327.93

    Then if his total taxable income (not including OAS) is $69.76 monthly / $837.12 yearly, he qualifies for GIS to top up his OAS from $327.93 to $1,495.71 monthly.

    Then add in the CPP of $69.76 and the monthly total is $1,565.47 including CPP, OAS and GIS.

    These numbers are for a single person.

    • Doug

      Hi Moss – You are 100% correct!

  11. Jamie

    Hi, I retired a couple of years back at 62 with a company pension, I have not taken CPP yet, my intention is to take it at 65. At the time of my retirement I had previously always paid max to CPP and thus I believe I am in line for the max payments at 65 (as far as I can tell from the Services Canada website). However after retiring I did take a part time job at $20k a year which I am still working at … I am wondering if this can have any negative affect on what I can receive at 65?

    Thanks

    • Doug Runchey

      Hi Jamie – If you have 39 years or more of max earnings/contributions, you will receive a max CPP (excluding the enhanced) regardless what you earn between age 62 and 65. If not, 20K earnings are better than zero earnings.

  12. Ginger

    Hi,
    I am back to this forum since I’ll be 65 years old in January 2021and I’d like to apply, if eligible, for CPP and/or OAS. As a reminder, I was Canadian resident and worked in Toronto between 1988-1990 and since then I’ve been living in France (French citizen). I’d like to know the appropriate entry point to the Canaddian administration handling these issues, so that to know if I am eligible, for what plan(s) and, if case, to advise the follow-up. I’ve searched for an email contact but failed to find one. Would you kindly give me a hand? Many thanks

  13. Steve Bridge

    Ed, YES! Wait until 70, much smarter.

  14. Mark Biddle

    I took my CPP at age 60, after 40 years of paying maximum, I am getting $849 a month but am still working so now I have a secondary contribution building up, I am still paying the maximum, I have been contributing to this secondary for 1 year and 3 months, and will contribute maximum for the next 2 years.
    Is there anyway to calculate this secondary contribution payment?

    • Doug Runchey

      Hi Mark – You should receive a post-retirement benefit (PRB) for each year that you contribute after you started receiving your CPP. Depending on when your CPP first started, it sounds like you should already be receiving a PRB for any 2018 earnings after you started receiving your CPP. Read this article if you want to better understand PRBs: https://retirehappy.ca/calculate-cpp-post-retirement-benefit-prb/

  15. Mike

    Question:
    I grossed $67,000 from Jan -Jun, before retiring Jul 1; I noticed both my CPP & EI premiums deducted at source were already at the max ( I.e. for tax deduction purposes);
    Shouldn’t it be prorated (i.e. 50% of max.)?
    – and can I claim ‘overpayment’ of such on my tax return?
    Thanks.

    • Doug Runchey

      HI Mike – I can’t comment on your EI deductions, but the only way that you will get a CPP refund would be if you turned age 70 in June.

  16. Sharon Heading

    I turn 65 this year. Can I choose to start receiving my pension at 67 or 68?

    • Doug Runchey

      Hi Sharon – Yes, you can defer your CPP until as late as age 70.

      • Hajzer Tafilaj

        Hi Doug… my question is when i turn 60 i will complet working in canada 21 yrs so for a about 10 yr my income was about $40.000 a yr and last 4 yr is $ 53.000 a yr .. so will be contribution cpp for about 21 yr.. so how much about i wil be geting cpp when i turn 60 .. thx

        • Doug Runchey

          Hi Hajzer – Figure out how many “max equivalents” your 21 years of earnings equal. Let’s pretend they total 15 max equivalents. If you take your CPP at age 60, it will be based on your best 35 years (ignoring the enhanced CPP for now). Using your 15 max years, your CPP at age 60 will be approx
          15/35 x $1,175.83 x 64% = $322.51 monthly.

  17. Patricia Mather

    Hi Doug, I’m self employed and I have been paying into CPP. late last year I turned 65 I’m now collecting CPP is it best to continue to pay in or should I opt out now? Self employment income is about $30,000 a year.
    Thank you

    • Doug Runchey

      Hi Patricia – In my mind, if you’re self-employed the ROI for PRBs is not very good. In 2020, self-employed earnings of $30,000 would require a contribution of $2,782.50 for a monthly PRB of approx. $18, meaning that you would “breakeven” in approx. 13 years.

  18. johnathan

    I am 49 yo. I contributed in the past on sporadic jobs. At the present, my yearly income is less than $15000. Is there a way a can contribute to my own CPP how and how much yearly, to gain some benefit at retirement time?

    • Doug Runchey

      Hi Johnathan – No, you can only make CPP contributions on valid earnings from employment or self-employment.

  19. Dave Dolman

    I am 65 and contributing $73.00 per month to CPP my PRB notice tells me I am entitled to $22.60 is it worth it to continue contributing

    • Doug Runchey

      Hi Dave – Do you expect to live for at least another 3.2 years? If so, it appears from your numbers that you will have recovered your contributions by then and you’ll be ahead by $271.20 each year that you live past then. Do you know of anywhere that you could get a better ROI?

  20. Yolanda

    Hello,

    I am not sure if it is correct, my friend won $50000 from a lottery and she retired. She told me that she was not given the pension(not sure which one) because she still has money in the bank. Another question, if you have a house, you will not be eligible for a guaranteed supplement, Is it true you have to sell your house before you reach 65 to avail of the guaranteed supplement? Thanks.

    • Doug Runchey

      Hi Yolanda – Neither the CPP nor OAS pensions would be affected by a lottery win, and there is no truth to the story that you have to sell your house in order to receive GIS (guaranteed income supplement).

  21. Cres Bolusan

    I am now receiving CPP next year I am planning to apply social security spousal benefit at age 62. Can i collect both CPP and Social Security Benefit.

    • Doug Runchey

      Hi Cres – You certainly can as far as CPP is concerned, but it’s possible that your social security benefit will be reduced partially under the Windfall Elimination Provision (WEP) because of the CPP that you’re receiving.

  22. Nancy

    I started to contribute from 2012 and plan to stop in 2021. I will contribute 9 full year with maximum contribution per year. My earning is from 75K to 95K. Am I qualified to apply CPP at 65? And how much can I receive monthly? Thanks

    • Doug Runchey

      Hi Nancy – Your CPP at age 65 would be approx. $285 per month.

      • Nancy

        Thank you Doug. If I only contribute 9 years, am I qualified to apply CPP? I heard that contributions must be accumulated to 10 years? Do I need to contribute 10 years? Thank you

        • Doug Runchey

          Hi Nancy – No, you only need 1 year of CPP contributions in order to qualify for a CPP retirement pension.

  23. Nenita Sevilla

    Hi, Doug, I have work for 34 years and have been contributed cpp ever since ,I will be 57 and will retire as of March 2021. Therefore, am no longer contributes CPP at that point. When I turn 60. I plan to start to collect CPP . Is it wise for me to do so? Or should I wait till 65. And Can I still continue to contribute. Thank you.

  24. Quratulain Sherazi

    Hi ! My husband is Canadian citizen he has worked in Canada (Quebec) for 10 years currently he’s age 55years ,he’s partially disabled living outside of Canada . Will he get pension and could he apply early pensioners benefits based on disability ? Thank you

    • Doug Runchey

      He may be eligible for a disability pension from QPP, but that depends on how disabled he is and when he last contributed to QPP (or possibly in whichever country he is currently living). If he doesn’t qualify for a disability pension, he would have to wait until at least age 60 before he can receive a retirement pension from QPP.

  25. Kelly Younker

    I am now close to 63 and have worked high paying jobs since I was 19 so I believe I will be eligible for the maximum when I hit 65. Waiting longer would be of no benefit if I am already going to get the maximum. Is this correct?

    • Doug Runchey

      Kelly – If you apply to start your CPP earlier than age 65, you can never receive “the maximum”, because it will be reduced by 0.6% for every month that you take it early. So you can receive as much as 85.6% of the maximum if you take it at age 63 or you can receive 100% of the maximum if you wait until age 65.

  26. Euje

    Hello i am receiving cpp survivors pension since the aged of 30 from my deceased husband that contributed CPP.I am living here in Philippines.Will i be also qualify for CPP MOnthly benefits when i turn 60 yrs. Old.Even i didnt got a job in Canada.Thank you.

    • Doug Runchey

      Hi Euje – No, if you never worked and contributed to CPP, you will not qualify for any CPP retirement benefits when you turn 60 years old.

      • Kelly Baird

        Hello I have paid into cpp for 32 years and this year became self employed, still paying into cpp. Will I still be eligible to receive the benefit at age 65?

        • Doug Runchey

          Hi Kelly – Yes, you will still be eligible to your CPP at the same age and based on your average lifetime earnings, including your self-employed earnings.

  27. Alan

    I am 58 years old and have been working for 2 years with a work permit(came to Canada at 56). I am American, my wife is Canadian. If I be come a Permanent Resident, lets say by 60, when it comes to retirement benefits (OAS, CPP) when they calculate my years of residency to qualify for benefits, will they count the years that I resided and worked prior to obtaining the new status? I ask this because besides Social Security from the US, I will need a supplement retirement benefit from Canada. I plan to work til 70 btw. I think you get the gest of what I’m getting at. Will I qualify and approx how much can I expect after putting in at least a decade or more of residency and work? Thanks in advance!

    • Doug Runchey

      Hi Alan – For OAS, each year that you reside in Canada is worth approx $15 per month at age 65. Those first two years probably won’t count as residence,, unless you can establish that it was always your intent to remain permanently in Canada. For CPP, each year that you worked and earned the YMPE is worth approx $30 per month at age 65 or approx $42.60 per month at age 70. Starting with 2023, these amounts increase to approx $40 per month at age 65 and approx $56.80 per month at age 70.

  28. Alan

    Thanks Doug, I’m still a bit hazy with the numbers. Based on 10 years residency from 60-70, can you give a ballpark total estimate of benefits between OAS and CPP if I keep working til 70? I earn 50K. I need to add whatever I can to future to American SS. Thanks.

    • Doug Runchey

      Hi Alan – OAS would be approx $150 per month and CPP would be approx $350 per month.

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