When starting CPP, take a good critical look.

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Various newspapers and advisors talk about the benefits of waiting to take the CPP. Some people start at 60, others start at the classic 65, while a slim minority wait till 70.

And the benefits can seem alluring. If you are eligible for the maximum benefit, then at age 65 this could be $14,1010. But if you wait till 70, you get a massive 42% boost in the payments. If you think about it, that is a great return over five years.

But if you use one of the standard CPP calculators, to total up and compare the difference between age 65 and 70 over your lifespan, the difference is quite small. You are not living five years longer as you might have hoped. You are receiving five years less in the way of payments.

And of course, pensioners that were not prepared to delay their gratification and started at 65, have the benefit of spending or investing the funds. The others waiting till 70 have a bit of an opportunity cost of not having the money in hand. Money now is always better than the same amount years from now. Which accounts for the increase if you wait till 70.

Ultimately, do the critical analysis. Is foregoing a marshmallow now worth two later?


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