Average CPP Benefits at Age 60 and 65 in 2024: What to Expect

CPP users can choose to start pension payments early but should know the financial repercussion of their decision.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Planning retirement finances in Canada includes starting the Canada Pension Plan (CPP) payments. The CPP pegs the standard retirement age at 65, but the early or late take-up has financial repercussions.

The Globe and Mail conducted an informal survey early this year regarding CPP users’ age to start payments. Around 34% of the respondents picked 60, while 65 was the most popular age for 19%. Respondents know about lower payments in the early take-up or a 0.6% monthly reduction (7.2% annually) before age 65. 

Our focus in this article is the average CPP benefit at 60 and 65 in 2024, not beyond. CPP framers believe 65 is the ideal option because even if you don’t qualify to receive the maximum, the average CPP amount is higher than at 60.

Standard age

Assume you’re 65 and claiming the CPP today. The maximum amount per month is $1,364.60 or $16,375.20 per year. However, only those who have contributed 39 years to the plan can receive the maximum benefit. If not, expect to receive the $831.92 average per month (as of January 2024) or $9,983.84 per year.

Early take-up

Assume you’re 60 and firm with your decision today to start CPP payments. Expect to receive $532.43 monthly ($6,389.15 per year) due to the 36% permanent decrease in your retirement benefit. Survey respondents have valid reasons for the early take-up.

Valid reasons

Most who take their CPP at 60 need financial coverage of living expenses. The pension is an immediate solution, and the income stream is for life. Shortened life expectancy due to health problems is another reason for the early take-up decision. Others go to the extent of the CPP’s inability to sustain pension payments in the future.

The CPP fund is growing and based on estimates, it will exceed $1 trillion by 2031 and top $1.5 trillion by 2036. The Canada Pension Plan Investment Board (CPPIB) Act states that federal and provincial governments can’t interfere in the management of the funds or influence the decision of the CPPIB as the fund manager.

Investing to boost the pension

Some CPP users take their benefits early and use them for day-to-day expenses. They invest their savings in income-producing assets like stocks. The recurring passive income from dividend stocks could boost the pension and come out more in the long run.

Canadian Imperial Bank of Commerce (TSX:CM) and TELUS (TSX:T) can be your anchor stocks. Both are generous dividend-payers and can sustain quarterly dividends regardless of the economic environment.

CIBC, Canada’s fifth-largest bank, trades at $67.24 per share and pays a hefty 5.39% dividend. The $46.3 billion bank has a 156-year dividend track record. In the first quarter (Q1) of fiscal 2024, net income rose 299.1% to $1.73 billion versus Q1 fiscal 2023. The provision for credit losses (PCL) increased 98.3% year over year to $585 million.

Created with Highcharts 11.4.3Canadian Imperial Bank Of Commerce PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

TELUS, Canada’s second-largest telco, is a Dividend Aristocrat owing to 19 consecutive years of dividend increases. At $22.59 per share, the 5G stock pays a lucrative 6.68% dividend. This $33.3 billion telco giant has a dividend-growth program in place. At the close of Q1 2024, TELUS announced a 7% dividend hike.  

Created with Highcharts 11.4.3TELUS PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Decision is final

Prospective retirees should know that whether you decide to start payments at 60, 65, or later until 70, the decision is final. Thus, assess your financial situation and others before making the decision.

Should you invest $1,000 in Atco Ltd. right now?

Before you buy stock in Atco Ltd., consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Atco Ltd. wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Retirement

protect, safe, trust
Dividend Stocks

Where I’d Allocate $20,000 in 2 Safer High-Yield Dividend Stocks for Retirement Needs

Here are two safer, high-yield dividend stocks I'm looking at for my retirement needs.

Read more »

Senior uses a laptop computer
Energy Stocks

Here’s How Investors Can Turn $15,000 in a TFSA Into $235,000

Energy stocks aren't created equal, and this one might be one of the best of the batch.

Read more »

Man in fedora smiles into camera
Retirement

Canadian Retirees: A CPP Change You Must Know in 2025

Canadians, if you're looking to retire soon or are already retired, CPP may not be enough. Here's how to make…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Retirement

Where I’d Invest My $7,000 TFSA Contribution for Dividends

These three high-yielding dividend stocks are ideal for your TFSA in this volatile environment.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Retirement

Top Canadian Value Stocks I’d Hold in My TFSA for the Next Decade

These Canadian value stocks have significant growth potential and will enhance your TFSA portfolio’s return in the long run.

Read more »

money goes up and down in balance
Retirement

Where I’d Invest $10,000 in Canadian Value Stocks for Long-term Growth

Suncor Energy Inc (TSX:SU) is a quality Canadian value stock.

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Retirement

Here’s the Average Canadian TFSA and RRSP at Age 60

Many Canadian retirees have tens of thousands invested in ETFs like the iShares S&P/TSX 60 Index Fund (TSX:XIU).

Read more »

Redwood trees stretch up to the sunlight.
Retirement

3 Canadian Growth Stocks I’d Buy and Hold in a TFSA Forever

These stocks have the potential to outperform the broader market with their returns. Using the TFSA can further amplify your…

Read more »