The Canada Pension Plan (CPP) is a retirement savings program funded by contributions from Canadian workers and their employers. If you are eligible for CPP, it is important to understand how you can maximize your benefits in order to have a comfortable retirement. Here are some tips to help you make the most of your CPP benefits.
Start Contributing as Early as Possible
The earlier you start contributing to CPP, the more you will receive in benefits when you retire. CPP contributions are based on your income, so the more you earn and contribute, the higher your benefits will be. If you start contributing at age 25, for example, you will have 40 years of contributions by the time you reach the standard retirement age of 65. This will result in a higher average earnings amount and a larger monthly benefit than if you had started contributing at a later age.
Consider Delaying Your CPP Payments
If you are able to, it may be beneficial to delay receiving your CPP payments until after the standard retirement age of 65. For every month you delay receiving your benefits, your CPP payment amount will increase by 0.7%. This means that if you delay receiving your benefits for five years, your payments will increase by a total of 42%. However, it’s important to consider your personal financial situation before making this decision
