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Before making a major financial decision you
should consult a qualified professional.
The CPP Retirement Pension Calculator will retain
your data on your computer. Click Reset before closing if you are using a
public computer.
Compare CPP Started at
Different Ages
This calculator will show you roughly how much Canada Pension Plan (CPP) retirement pension you will
collect, depending on the age at which you decide to start collecting.
The main purpose of the calculator is to help you see the effect of
starting to receive your pension at different ages, not to provide an
exact amount of your pension.
Statement of
Contributions
You will need your estimated CPP retirement pension at age 65, from
a current CPP statement of contributions, in order to use the calculator.
If you have not received a statement of contributions, you can get one
online from Service Canada CPP
Statement of Contributions. If you are getting the information
online from Service Canada, go to the page which says "View my
estimated monthly CPP benefits".
CPP Estimated Monthly
Benefit
The calculator uses your estimated monthly CPP benefit
at age 65 provided to you by Service Canada. This estimate is based
on your average earnings since age 18, and assumes that your earnings will
continue at this level until age 65. This estimate does not include
the effects of the child rearing drop-out (CRDO).
If the CRDO applies to you, then your CPP would be greater than the
estimate.
If your earnings are not continuing because you've retired say at age 60, you
could increase the age 60 amount for inflation, and use that as your age 65
amount.
Estimated CPP Indexation
The maximum starting CPP retirement pension is indexed annually based
on the Consumer Price Index (CPI). The calculator displays the CPP
indexation factor for the previous 5 years to help you estimate an
indexation factor to be used by the calculator. When the inflation
rate is high, you are most likely better off to take your CPP retirement
pension later. As noted in the article Consider
inflation when deciding when to begin CPP by Lea Koiv, the indexation
of the year's maximum pensionable earnings for wage inflation also affects
the CPP calculation.
Choose 3 Years for Starting CPP
The calculator compares the CPP retirement pension starting at 3
different ages, which you can choose. For instance, if you turn 60
in 2016 and want to start collecting your CPP in 2016, you would enter the
year 2016 and age 60. You can then choose 2 other ages in the next 2
columns, in order
to provide a comparison.
Present Value / Rate of
Return
The calculator also calculates the present
value (PV) of the pension to be received up to a certain age, based on
an estimated rate of return which you input. The PV is the amount that would have to
be invested at the earliest time in the table of results, in order to
provide the future cashflows shown in the results. The present value
shown in each column of the calculator is the amount that would have to be invested at the
beginning of the first year, in order to have the annual CPP amount at the end of
each year. This is simplifying the calculation, as the cashflows will
actually be received monthly, but since this is done with all scenarios
being compared, it shouldn't cause a problem.
Although we tend to recommend taking the CPP earlier, unless this would
affect the bridge benefits of your pension, the Society of Actuaries seems to
recommend taking it later. This is discussed in the September
2020 Life in the Tax Lane video.
Tax Tip: This is a very personal
decision, and must be tailored to your individual financial situation.
Service
Canada Canadian Retirement Income Calculator
If your earnings are changing significantly before
you start collecting your CPP pension, try the Service Canada Canadian
Retirement Income Calculator.
Revised: March 06, 2024
Feel free to link to our Calculators page
from your website.
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