Top 5 questions about Canada Pension Plan (CPP)

One of the most common sources of retirement income for Canadians is the Canada Pension Plan (CPP), a taxable monthly benefit that is intended to replace a portion of your income when you retire.

We have put together a list of the top five questions we receive about CPP.

1. How do I qualify for CPP retirement benefits?

To qualify you must be at least 60 years old and must have made at least one valid contribution to the CPP. To begin receiving a CPP retirement pension, you must apply through your My Service Canada account as CPP retirement benefits are not automatic.

2. How much CPP retirement benefit will I receive?

CPP retirement benefits vary from one person to the next. The amount of your CPP retirement pension depends on several factors, including your earnings during your working years, the amount you contributed to CPP, how many years you contributed, and the age at which you start receiving your CPP retirement pension.

For 2023, the maximum monthly amount you could receive if you start your pension at age 65 is $1,364.60. However, very few people receive the maximum, and the average monthly CPP retirement pension (at age 65) in October 2023 was $758.32.¹

3. Are CPP benefits taxable?

Yes, CPP disability, retirement, post-retirement, children's, and survivor's benefits are fully taxable as income with no preferential tax treatment. The CPP death benefit is also taxable in most cases.

4. When can I start to receive CPP retirement benefits?

The normal start date for receiving CPP retirement benefits is age 65. However, you can begin receiving CPP as early as age 60, or as late as age 70, or anywhere in between. If you start receiving your CPP retirement pension before age 65, your payments will be reduced by 0.6% each month (7.2% per year), up to a maximum reduction of 36% at age 60.

5. What happens to my CPP retirement benefits when I die?

There are three types of CPP benefits relevant at death:

• CPP Death Benefit –a one-time payment made to your estate (or other eligible individual) upon death. To qualify, you must have made CPP contributions for at least three years or one-third of the calendar years in your contributory period for the base CPP. The CPP death benefit is a single lump-sum payment of $2,500.
• CPP Survivor's Pension –a monthly payment paid to the legal spouse or common-law partner of a deceased CPP contributor. To qualify, the survivor must have been a legally married spouse or common law partner of a deceased CPP contributor.
• CPP Children's Benefit –provides a regular monthly payment to the dependent child or children of a deceased CPP contributor. The deceased contributor must have made sufficient contributions to the CPP, and the child must be under age 18, or under age 25 and attending (full-time) a recognized school or university. The children's benefit is a monthly flat rate amount of $294.12 for 2024, adjusted annually.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

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