Receiving a reduced CPP retirement pension before age 65
By the time Chin was 61 he was ready to stop working. He decided to retire in the month he turned 62. He knew that his Old Age Security pension could not be paid until he was 65 years old, but a neighbour told him that there was a way for him to apply for his CPP retirement pension before he was 65.
Chin did some research and discovered he could get a CPP retirement pension before he was 65 as long as he had stopped working or reduced his work for a period of time.
He also discovered that the amount of his retirement pension would be reduced if he took it before he was 65. The reduction was 0.5% for each month that he was younger than 65 when he applied. That meant that his pension would be reduced by 18% (0.5% x 36 months) if he applied to have his CPP retirement pension start the month after he retired at age 62.
Instead of waiting until he was 65 to get his full pension, which the Canada Pension Plan estimated to be about $630 a month, Chin decided to take a reduced pension of about $516.60 per month and applied for his retirement pension the day he retired.
Case study summary - CPP retirement pension at age 60
- Chin decides to retire from his job at age 62
- Chin applies for his CPP retirement pension
- Chin's pension is reduced by 18% because he is younger than 65 when he starts receiving it