Illustration by The Globe and Mail
Q: I am 67 years old and not planning on taking the Canada Pension Plan and Old Age Security until I’m 70. I am delaying because I don’t need the money, and I currently receive a spousal benefit in the amount of $409 per month as my previous partner passed at age 57. I also believe I would lose all or most of the spousal benefits as I am close to the maximum. I’m wondering if I take CPP now (I’ve calculated it to be approximately $1,534), will I get both my CPP entitlement and the spousal benefit? And if so, does it still make sense to wait?
We asked Leslie Logan, senior financial planner, TD Wealth, to answer this one.
According to the Government of Canada, the most that can be paid to a person who is eligible for the retirement pension and the survivor’s pension is the maximum retirement pension.
As a result, if you start CPP at the age of 67, your total CPP entitlement would be capped at approximately $1,760 per month, not your own CPP plus the full survivor benefit, as that would exceed the allowable maximum, Ms. Logan said.
For 2026, and at the age of 70, that amount increases to $2,140 per month, which is 25.2 per cent more than at the age of 67. “While this does mean giving up most of the survivor CPP benefit, a significant portion of that reduction is effectively replaced by the higher CPP amount you receive by waiting, with no additional investment risk,” she said.
I’m 67 and retiring, but my spouse will keep working. Should I wait until 70 to take CPP?
Ms. Logan said it’s important to remember that the CPP is a guaranteed, inflation‑indexed, lifetime pension. “Unless there is a current income need or a materially reduced life expectancy, delaying CPP is generally the more advantageous option.” While you may not need the income today, future needs may arise, and having a higher guaranteed lifetime benefit can provide valuable flexibility later in retirement.
In Ms. Logan’s experience, retirement expenses are frequently underestimated, sometimes resulting in unwelcome surprises if not properly planned for. “Even routine costs – such as dental care – can become increasingly expensive as we age,” she said. “As longevity increases, the cumulative financial impact of these expenses can be significant.” Additional guaranteed income may be the difference between remaining in your home longer or having greater choice and flexibility when considering future retirement living options. “A higher lifelong pension helps offset these rising costs, providing future you with greater control, flexibility and choice over where and how you live.”
Your OAS would also benefit from deferral to age 70, increasing by 21.6 per cent, Ms. Logan advised. Assuming you have lived in Canada for at least 40 years after age 18 (a general requirement for the maximum OAS) – OAS clawback would not be a concern based solely on government pension income. “OAS recovery begins at $95,323 of net annual income, with benefits reduced by 15 cents for every dollar above this threshold; benefits are fully clawed back at $154,708,” she added.
According to Ms. Logan’s calculations, if you wait until the age of 70, your combined retirement pensions would increase by approximately $540 per month, or about $6,490 annually, which, she added, is a meaningful, guaranteed increase that would be difficult to justify leaving on the table. “More importantly, this approach helps protect against two of the greatest financial risks in retirement: inflation and the risk of outliving your money.”
Do you want advice on a financial planning or retirement issue that’s affecting you? Send us an e-mail.
