Taking the Canada Pension Plan early depends on how long a pensioner expects to live, whether he will continue earning income elsewhere and whether he needs the income, reports the Toronto Star. Pensioners who take CPP early receive income immediately but will receive less total CPP over the long term.
As of 2015, for each month that a pensioner receives CPP prior to his 65th birthday, payments will be reduced by 0.58 percent, according to Group Benefits Online. A pensioner who waits until 65 to receive CPP and lives past 74 will receive more CPP income overall than someone who starts taking CPP at 60. Many experts still recommend taking CPP as soon as possible, according to the Toronto Star. Taking CPP early is especially recommended for people who believe they may not live as long, according to the Financial Post.
Penalty increases for early CPP, from 2012 to 2016, muddle the once clear choice to take CPP early, reports the Financial Post. If CPP income is not immediately needed, some experts now believe that it is better to wait and receive higher CPP payments later, states the Toronto Star. Pensioners who continue working while receiving CPP also continue to pay into CPP until age 65.