CPP at 60 vs 65: Early Start Comparison

Early-start reduction (the math)

Service Canada decreases CPP by 0.6% for each month you start before 65 (7.2% per year), up to 36% at age 60. The adjusted amount is permanent; indexation applies to the reduced base.

Once both are in pay, waiting until 65 means about $5,616 more CPP per year in this illustration. Replace the base with your My Service Canada Account estimate.

Bridge income between 60 and 65

The early-start decision is often really a bridge decision. Without CPP at 60, spending still needs funding from:

• Employment or self-employment
• Workplace pension (if already payable)
• RRSP or TFSA withdrawals
• Non-registered investments or cash

Taking CPP at 60 can reduce how much portfolio you sell in the bridge years. Waiting until 65 can preserve a larger lifelong CPP cheque if something else covers the gap. OAS is not available before 65, so early retirees often feel this trade-off sharply-see retiring at 60.

Employment income and tax

CPP is taxable. Starting at 60 while employment income is still high can stack taxable income in peak-earning years. Starting later while earnings have stopped can look different after tax. If you work after starting CPP and are under 70, Service Canada post-retirement benefit rules may also apply.

Portfolio withdrawals avoided versus opportunity cost

Early CPP can mean fewer investment withdrawals from 60-65, which may help if markets are weak or if you want to leave TFSA/RRSP balances compounding. The opportunity cost is the permanently smaller cheque and the investment return you might have earned on money you would otherwise have kept invested while delaying. Neither effect is free; model both sides with your balances rather than assuming one dominates.

RRSP bridging while delaying CPP is common. Drawing an RRSP to wait until 65 raises taxable income now and can change later RRIF minimums. See RRSP withdrawal strategy.

Health and longevity in the 60 vs 65 slice

Living well past a notional break-even age favours the larger age-65 payment in pure CPP cash terms. Dying earlier favours the early start for cumulative CPP received. Health and family history inform that judgment; they do not produce a universal age.

Test 60 versus 65 in RetireIQ

1. Enter your age-65 CPP estimate, spending, and bridge accounts.
2. Run one plan with CPP at 60 and one at 65.
3. Compare withdrawals, taxes, and whether spending stays funded.

Test taking CPP at 60 versus 65 with your numbers. For delay past 65, continue to the CPP 65 vs 70 comparison. Return to the CPP timing decision framework when you need the full 60-70 factor list.