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Delaying CPP Benefits: A Growing Trend
Canadians are increasingly delaying CPP benefits to age 70 despite the risk of dying before fully benefitting, driven by longevity and financial concerns.
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Canada
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Employment And Social Development CanadaStatistics Canada
- How have the trends of CPP start ages changed over time?
- While the number of people starting CPP benefits at age 60 has decreased, those starting at age 70 has increased. This shift reflects a growing consideration of potential longevity.
- What are valid reasons to start receiving CPP benefits early?
- Good reasons for early CPP access include immediate financial needs and health concerns that limit lifespan. However, early access diminishes overall lifetime benefits, so it is a trade off.
- Why are more Canadians delaying their CPP retirement benefits?
- More Canadians are delaying their CPP retirement benefits until age 70 to receive higher monthly payments, driven by increased longevity and concerns about depleting retirement savings.
- What are the financial differences between starting CPP at ages 60, 65, and 70?
- The maximum monthly CPP retirement pension at age 70 is significantly higher than at ages 65 or 60, providing more financial security in later years. The annual inflation adjustments to all recipients also need to be considered.
- What psychological factor influences CPP decision-making regarding the start date?
- The fear of dying young and leaving unutilized CPP contributions outweighs the potential benefit of increased payments for many individuals. This is due to loss aversion, where losses feel more significant than equivalent gains.