Claiming CPP at age 60 may be the best option (even if you don’t need it yet)

Many recommend that the ideal age for receiving the Canada Pension Plan (CPP) payout is 65. But that’s not true, as everyone’s financial situation is different. Remember that in the financial world there is no one-size-fits-all solution, but a tailor-made solution, based on the situation and need. If you are 60 years old, healthy, working, and at the peak of your career, you don’t need the CPP payout. It will only add to your taxable income. The ideal scenario that advisors generalize is that the CPP payout age is 65.

When can claiming CPP at age 60 be the best option?

Scenario 1: Lower life expectancy

If you are sick and may not live much longer, there is no point in waiting, even if you don’t need the money. You can get a permanent 36% reduction in the CPP payout, but you’ll still get a higher total payout if you expect to live to age 70. Here’s how.

The average CPP payout in 2025 is $542.96 at age 60 and $848.37 at age 65. If you were paid the same amount until age 70, your cumulative CPP payout in 10 years would be $65,154, even after a 36% discount, while the five-year payout would be $50,902, excluding the indexation effect. The idea is to show you the payout difference between ages 60 and 65.

Age	Average CPP/month	Total CPP payout in a year	Cumulative CPP payment up to age 70 (excluding indexation)
65	$848.37	$10,180.44	$50,902.20
60	$542.96	$6,515.48	$65,154.82

Scenario 2: No CPP contributions

The CPP payout is determined based on the best 39 years of your earnings. CPP is deducted from salary or business income. So if you are not contributing to CPP because you earn a large portion from rent, investments, dividends from your company or any other source, there is no point in holding back the CPP payout. Waiting until age 65 won’t help because your average income will drop.

Keep in mind that in both scenarios you don’t need the money. Still, collecting CPP at age 60 makes economic sense. Another common scenario is when you need the money to pay the bills. It is better to collect the payout early than to live in debt.

How to Achieve Financial Freedom When Your Retirement Doesn’t Depend on CPP

Dependence on CPP alone for their pension is not a good option. Keep in mind that CPP only covers 25-30% of your expenses. Achieving financial freedom gives you the power to choose when you retire. To achieve this kind of freedom, working alone will not help. You also have to put your money to work. And you should put your money in the hands of people who are smarter and better qualified than you. Stocks help you achieve that.

When you buy a share of Energy Company of Canada (TSX:POW), your money is exposed to the mastermind behind this financial holding company. The company is behind names like Canada Life, Rockefeller and WealthSimple. You can get some of the money these companies make in the form of dividends and capital growth.

Power Corporation of Canada has consistently increased dividends at an average annual rate of 7% over the past eleven years. It has also created 55% capital growth this year by restructuring the business to maximize returns. Exposure to the North American and European markets has helped improve returns.

Keep making money and invest your work income in different sectors to benefit from the efforts of brilliant minds working towards growth. Think of artificial intelligence (AI) stocks like Nvidia and bitcoin stocks like Hive digital technologies for exponential growth.