If you wait until 70 to start CPP pension, the amount payable is adjusted upward. The adjustment factor – the “bump” – was just 30 per cent until 2010 but it has been 42 per cent since 2013 (2011 and 2012 were transition years). When you compare CPP pension starting at 70 with what you would be receiving if you started at 65, however, the bump has actually been more than 42 per cent between 2012 and 2022. (The reasons are technical and involve the difference between wage inflation and price inflation.) In 2023, the bump was less than 42 per cent, which is why I recommended that 69-year-olds in 2022 start their CPP that same year rather than waiting until 70. In another month or two, we will have a better idea of what to expect for 2024.
Difference in payout between
starting CPP at 70 versus 65
By year that contributor turns 70
Actual
Expected
55%
50
2011 and 2012:
transition years
45
40
35
30
25
20
15
10
5
0
1995
1999
2005
2011
2017
2023
THE GLOBE AND MAIL, SOURCE: AUTHOR’S CALCULATIONS BASED ON INFLATION DATA FROM STATISTICS CANADA TABLE 8-10-0004-01 AND INCOME DATA FROM TABLE 14-10-0222-01.
Difference in payout between
starting CPP at 70 versus 65
By year that contributor turns 70
Actual
Expected
55%
50
2011 and 2012:
transition years
45
40
35
30
25
20
15
10
5
0
1995
1999
2005
2011
2017
2023
THE GLOBE AND MAIL, SOURCE: AUTHOR’S CALCULATIONS BASED ON INFLATION DATA FROM STATISTICS CANADA TABLE 8-10-0004-01 AND INCOME DATA FROM TABLE 14-10-0222-01.
Difference in payout between starting CPP at 70 versus 65
By year that contributor turns 70
Actual
Expected
55%
50
2011 and 2012:
transition years
45
40
35
30
25
20
15
10
5
0
1995
1999
2002
2005
2008
2011
2014
2017
2020
2023
THE GLOBE AND MAIL, SOURCE: AUTHOR’S CALCULATIONS BASED ON INFLATION DATA FROM STATISTICS CANADA TABLE 8-10-0004-01 AND INCOME DATA FROM TABLE 14-10-0222-01.
Frederick Vettese is former chief actuary of Morneau Shepell and author of Retirement Income for Life.