Canada Pension Plan – How much could you receive
3. How much could you receive
The amount of your CPP retirement pension is based on how much you have contributed and how long you have been making contributions to the CPP at the time you become eligible. Read more about CPP retirement pension amounts.
A certain number of your lowest earnings months may be automatically dropped from the CPP retirement pension calculation under the general drop-out provision. This may help increase the amount you will receive.
You can also request the child-rearing provision which may increase your retirement pension amount if you had zero or low earnings because you were the primary caregiver raising your children.
Credit splitting may affect the amount of the CPP retirement pension for both you and your former spouse or common-law partner.
If the cost of living goes up, so does the amount of your CPP benefits. Your monthly benefits are adjusted every year in January based on the Consumer Price Index.
How your age will affect your monthly payment
The standard age for beginning to receive your Canada Pension Plan (CPP) retirement pension is the month after your 65th birthday. However, you can take a reduced pension as early as age 60 or begin receiving an increased pension after age 65.
The amount of your pension will depend on how much and for how long you have contributed to the CPP and on your age when you want your pension to start. If you take it before age 65, your pension will be reduced, by up to 36% at age 60. If you take it after age 65, your pension may be larger, by up to 42% at age 70.
There have been recent changes to the early pension reduction and late pension increase to ensure that whether you choose to receive an early or late retirement pension, the amount you receive will reflect your contributions made to the Plan and your average duration of benefits.
Taking your pension before age 65
From 2012 to 2016, the Government of Canada is gradually changing the early pension reduction from 0.5% to 0.6% for each month you receive it before age 65. This means that by 2016, an individual who starts receiving their CPP retirement pension at the age of 60 will receive 36% less than if they had taken it at 65.
The following table shows the percentage by which your retirement pension will decrease for each month that you receive your pension before age 65. These amounts will change every year until 2016.
For example, if you begin receiving your retirement pension in 2013, it will be reduced by 0.54% for each month that you receive your pension before age 65.
|Year of retirement||% (monthly reduction)|
For a person who applies for and receives their retirement pension at age 60, this represents a maximum reduction of 32.4% if taken in 2013, 33.6% if taken in 2014, 34.8% if taken in 2015, and 36% if taken in 2016.
Taking your pension after age 65
If you take your pension after age 65, your monthly payment amount will increase by 0.7 percent for each month that you delay receiving it up to age 70 (8.4% per year).
This means that, an individual who starts receiving their retirement pension at the age of 70 will receive 42% more than if they had taken it at 65.
Although Amrita enjoys her job as a nurse, she plans to retire when she reaches 65 in 2014. Based on her CPP Statement of Contributions, she expects her CPP retirement pension in 2014 to be $6,220 annually. This amount will then grow with the cost of living, as measured by the Consumer Price Index.
However, if Amrita decides to delay taking her CPP pension until she reaches 66 in 2015, her CPP retirement pension will increase by 8.4% (0.7% x 12 months). Based on this change, the annual amount of her pension will increase by $522, and will then grow with the cost of living, as measured by the Consumer Price Index.
Note: After age 70
There is no financial benefit in delaying taking your pension after age 70.
Canada Pension Plan payment amounts
This chart shows the average and maximum monthly payment amounts for Canada Pension Plan (CPP) pensions and benefits, except for the death benefit, which is a one-time payment, not a monthly payment.
Note: Indexing of benefits
CPP payment amounts are adjusted every January if there is an increase in the cost of living as measured by the Consumer Price Index
|Type of pension or benefit||Average amount for new beneficiaries (January 2016)||Maximum payment amount (2016)|
|Retirement pension (at age 65)||$664.57||$1,092.50|
|Post-retirement benefit (at age 65)||$8.32||$27.31|
|Survivor's pension – younger than 65||$410.94||$593.62|
|Survivor's pension – 65 and older||$339.39||$655.50|
|Children of disabled CPP contributors||$234.87||$237.69|
|Children of deceased CPP contributors||$234.87||$237.69|
|Death benefit (one-time payment)||$2,296.85||$2,500.00|
|Combined survivor's and retirement pension (at age 65)||$829.06||$1,092.50|
|Combined survivor's pension and disability benefit||$1,041.57||$1,290.81|
For a more detailed report on CPP amounts and figures, see the OAS and CPP Program Information Card (Rate Card).
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