# CPP sooner or later chart



## lonewolf :) (Sep 13, 2016)

Another thread that was closed was going to post on so started new thread to add info


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## lonewolf :) (Sep 13, 2016)

Would be interesting to see calculations if early payments were put into a deferred annuity & annuitize when CPP starts. Though would have to calculate taxes if having to with draw large RRSP amounts with higher CPP payments if waiting till 70 would effect results. Also if never worked a lot of years math might be better to take @ 60


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## Dogger1953 (Dec 14, 2012)

lonewolf :) said:


> View attachment 16722
> 
> 
> Another thread that was closed was going to post on so started new thread to add info


It's pretty tiny, but that looks like my spreadsheet!


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## lonewolf :) (Sep 13, 2016)

Hi, Dogger do you have chart showing how not working x amount of years effects taking CPP early or late thanks


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## Dogger1953 (Dec 14, 2012)

lonewolf :) said:


> Hi, Dogger do you have chart showing how not working x amount of years effects taking CPP early or late thanks


I don't generally produce generic charts, because there are too many variables and they don't necessarily apply to anyone. I did produce the earlier one that you posted, because it would definitely apply to anyone who had 39 or more years of maximum earnings/contributions. I am now also attaching this chart (if it works) that would apply to anyone who has exactly 35 years of maximum earnings/contributions and who doesn't qualify for the child-rearing dropout provision.


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## milhouse (Nov 16, 2016)

Hey Dogger. Have you done any analysis or have any general thoughts around the concept of taking CPP early (like at age 60) to allow you to pull less money from your RRSP and allow it to continue to grow sheltered longer? 
Obviously it's highly dependent on your RRSP rate of return but I'm curious if the additional growth from longer sheltering in your RRSP offsets taking a reduced CPP payments at age 60 (or vice versa in getting a larger CPP at age 70 but having to withdraw from your RRSP's through your 60's).


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## Dogger1953 (Dec 14, 2012)

milhouse said:


> Hey Dogger. Have you done any analysis or have any general thoughts around the concept of taking CPP early (like at age 60) to allow you to pull less money from your RRSP and allow it to continue to grow sheltered longer?
> Obviously it's highly dependent on your RRSP rate of return but I'm curious if the additional growth from longer sheltering in your RRSP offsets taking a reduced CPP payments at age 60 (or vice versa in getting a larger CPP at age 70 but having to withdraw from your RRSP's through your 60's).


My true expertise is limited to the CPP and OAS programs, so I haven't really done that analysis. There are certainly the two opposite school of thoughts, being: 
1) take your CPP early to reduce your early RRSP withdrawal, or 2) withdraw your RRSP early to delay and maximize your CPP payments.

In my mind, #1 has the advantage if you are comfortable with your RRSP investments and/or if you are concerned about leaving a larger Estate and/or if you have another source of an indexed pension; but #2 has the advantage of maximizing a "guaranteed" fully indexed pension and/or where you want to minimize the risk of your RRSP investment and/or where leaving a large Estate is not a concern.


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## Spudd (Oct 11, 2011)

#2 also has the advantage of potentially decreasing OAS clawback since required RRSP withdrawals will be smaller once the CPP starts coming.


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## steve41 (Apr 18, 2009)

choose....

1. it depends
2. it's complimicated
3. both of the above

take your pick


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## milhouse (Nov 16, 2016)

Thanks for the replies Dogger, Spudd, and steve. 
Didn't expect there to be a simple answer or a decision tree type solution otherwise, it'd be frequently referenced in all the "When to take CPP" type discussions everywhere. Just hoping for some opinions and pros and cons about the ideas.


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## Retiredguy (Jul 24, 2013)

milhouse said:


> Thanks for the replies Dogger, Spudd, and steve.
> Didn't expect there to be a simple answer or a decision tree type solution otherwise, it'd be frequently referenced in all the "When to take CPP" type discussions everywhere. Just hoping for some opinions and pros and cons about the ideas.



1/3 of seniors get GIS, and they effectively lose 1/2 of their CPP. Many of that group don't have a strong work record with a lot of CPP Max years, so many are also adding low amounts or zeros to their CPP calculation after 60. I expect there will be exceptions but I think if one is going to get GIS taking CPP at 60 is the way to go. Also I think its generally accepted that poorer individuals tend to have a shorter life expectancy.


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## lonewolf :) (Sep 13, 2016)

Doug nice chart

I think I will have about 23 years of full CPP contributions. I never raised any children so can not add any drop out years. Since I do not have a lot of years of contribution would I get penalty for waiting to 65 or 70 to take as do not plan on any more contribution years ? I read on internet if do not have a lot of years of service the penalty will off set increase by waiting to take CPP by a fair amount.

Does the penalty get worse, stays the same, or gets better each passing month to age 70 ?

Thanks


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## Dogger1953 (Dec 14, 2012)

lonewolf :) said:


> Doug nice chart
> 
> I think I will have about 23 years of full CPP contributions. I never raised any children so can not add any drop out years. Since I do not have a lot of years of contribution would I get penalty for waiting to 65 or 70 to take as do not plan on any more contribution years ? I read on internet if do not have a lot of years of service the penalty will off set increase by waiting to take CPP by a fair amount.
> 
> ...


LW - It depends a bit on whether you have any partial years of contributions in addition to your 23 years of full contributions, but assuming not your 3 choices would be approx.:
- 64% of 23/35ths max = $468.59 at age 60, or
- 100% of 23/39ths max = $657.07 at age 65, or
- 142% of 23/39ths max = $933.05 at age 70

Your "calculated CPP" does not decrease after age 65 (even with zero earnings), and the increase is a steady 0.7% for every month of delay from age 65 to 70.


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## Dogger1953 (Dec 14, 2012)

I wholeheartedly agree with what Retiredguy says above regarding GIS and taking CPP early.


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## lonewolf :) (Sep 13, 2016)

Thanks Doug for making the math simple.


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## OptsyEagle (Nov 29, 2009)

Also, it would be nice to see the chart for people who are retired before 60, making this decision. In those cases, they need to account for 5 more "zero" contribution years if they wait to take their CPP at age 65 ,instead of 60. That consideration always seems to be left out of most graphs, tables and retirement plans that I have seen.


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## heyjude (May 16, 2009)

OptsyEagle said:


> Also, it would be nice to see the chart for people who are retired before 60, making this decision. In those cases, they need to account for 5 more "zero" contribution years if they wait to take their CPP at age 65 ,instead of 60. That consideration always seems to be left out of most graphs, tables and retirement plans that I have seen.


That was my situation. How do two variables working in the opposite direction combine for the best result? I decided to engage Dogger and pay him for his expertise. I recommend that anyone with a more complex situation do the same.


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## lonewolf :) (Sep 13, 2016)

OptsyEagle said:


> Also, it would be nice to see the chart for people who are retired before 60, making this decision. In those cases, they need to account for 5 more "zero" contribution years if they wait to take their CPP at age 65 ,instead of 60. That consideration always seems to be left out of most graphs, tables and retirement plans that I have seen.


 OE take a look @ the math dogger did on post 13 You might get a better understanding of the math of how adding zero years from 60 to 65 makes to the equation. 

I was trying to figure it out from government website & the site made it way to complicated. Dogger made it simple


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## lonewolf :) (Sep 13, 2016)

heyjude said:


> That was my situation. How do two variables working in the opposite direction combine for the best result? I decided to engage Dogger and pay him for his expertise. I recommend that anyone with a more complex situation do the same.


 Probably a good idea I read some of doggers work on the internet he does know his stuff. I wont be able to collect for a few more years so see what rules are @ the time before I dial in


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## milhouse (Nov 16, 2016)

OptsyEagle said:


> Also, it would be nice to see the chart for people who are retired before 60, making this decision. In those cases, they need to account for 5 more "zero" contribution years if they wait to take their CPP at age 65 ,instead of 60. That consideration always seems to be left out of most graphs, tables and retirement plans that I have seen.


If all goes to schedule, I'm going to have a handful of 0 years prior to 60. According to a formula that Dogger confirmed in a previous post of mine, I calculated I'm still going to end up with about $200/month more by holding off to 65 instead of 60, even with the additional 0 years which I found kind of surprising. 

(My max contribution years)/(Number of years used for max monthly benefit) x (Max Benefit) x (Earlier Reduction Penalty) = Rough Monthly Benefit


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## Daniel A. (Mar 20, 2011)

I retired at 56 and waited till 63 before collecting CPP, I had 38 full contribution years. Had I taken CPP at sixty it would have been around 680.00 per month as it is I'm getting around 950.00 per month. The zero years one is aloud to drop 8 years now it was 7 before and that is what I based my decision on when to collect.


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