The Canada Pension Plan (CPP) is one of the most important retirement income programs for Canadians. For decades, age 65 has been seen as the “standard” retirement age when many workers stop working and begin drawing their CPP pension. However, new financial realities and government rules mean that “saying goodbye to CPP at 65” may not be the best strategy for everyone. In 2025, Canadians face important choices about when to start their CPP pension, how much they will receive, and whether delaying their benefits could be a smarter financial move.
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What is the Canada Pension Plan?
The CPP is a government-run retirement income program that provides monthly payments to eligible Canadians who have contributed during their working years. Contributions are made through payroll deductions, with both employees and employers paying into the plan.
To qualify, you must:
- Be at least 60 years old.
- Have made at least one valid contribution to CPP.
Your monthly amount is based on how much you contributed, how long you contributed, and the age at which you start taking your pension.
Why Age 65 Has Been the “Traditional” Retirement Age
For years, 65 has been considered the normal age to start receiving CPP benefits. This is because:
- It is the “standard” pension age set by CPP.
- The Old Age Security (OAS) program also begins at 65 for most Canadians.
- Many workplace pension plans are aligned with retirement at age 65.
At 65, you are entitled to your “full CPP retirement pension” — but this does not mean it’s always the best choice.
What Happens If You Take CPP at 60 or Delay Beyond 65?
Canadians now have more flexibility in deciding when to begin CPP:
- Taking CPP Early (as early as age 60):
Your payments are permanently reduced by 0.6% for each month before age 65. This equals a reduction of 7.2% per year, or up to 36% if you take CPP at 60. - Taking CPP Later (up to age 70):
Your payments increase by 0.7% for each month you delay past 65. This equals an increase of 8.4% per year, or up to 42% more if you wait until age 70.
This means “saying goodbye to CPP at 65” might actually cost you in lost potential income if you are in good health and expect to live longer.
How Much Can You Receive in 2025?
According to Canada.ca, the maximum monthly CPP retirement pension in 2025 is $1,433.01 for those starting at age 65. However, most people receive less because the actual payment depends on lifetime contributions.
- At age 60, the maximum is reduced to around $844 per month.
- At age 70, the maximum could increase to over $2,030 per month.
These numbers highlight why the decision of when to start CPP is critical for retirement planning.
Factors to Consider Before Starting CPP
Whether or not you should “say goodbye to CPP at 65” depends on your personal situation. Some factors include:
- Health and Life Expectancy: If you are in poor health or have a shorter life expectancy, taking CPP early may be better.
- Employment Status: If you are still working at 65, delaying CPP could maximize your future benefits.
- Other Income Sources: Those with workplace pensions, RRSPs, or investment income may choose to delay CPP.
- Tax Implications: Starting CPP earlier or later can affect your income tax bracket and OAS clawback risk.
Why More Canadians Are Delaying CPP in 2025
In today’s economy, many Canadians are living longer and working past age 65. With rising costs of living, healthcare expenses, and longer retirement periods, deferring CPP to age 70 is becoming increasingly common. By doing so, seniors can lock in higher guaranteed monthly income for life.
While 65 has long been the “default” retirement age, Canadians in 2025 have more flexibility and important financial decisions to make. Saying goodbye to CPP at 65 may not be the best choice for everyone. Some may benefit from starting earlier, while others may maximize their retirement security by waiting until 70.
The key is to assess your personal finances, health, and retirement goals before making a final decision.