Canadian Retirement Income Calculator - Frequently Asked Questions about the Canada Pension Plan

• Frequently Asked Questions about General Information
• Frequently Asked Questions about the Canada Pension Plan
• Frequently Asked Questions about Employer Pensions
• Frequently Asked Questions about Retirement Savings
• Frequently Asked Questions about the Old Age Security Pension

Virtually every Canadian contributes to the Canada Pension Plan (CPP) (or the Quebec Pension Plan (QPP) if you work in Quebec) on earnings from employment or self-employment between specified minimum and maximum levels.

The contributions you make are recorded from the time you are 18 until you begin receiving your CPP pension. Generally, the contributions over this entire period determine the amount of benefits you will receive.

Along with the retirement pension that you will receive, you and your family are also protected against loss of income due to disability and death.

Tell me more about Canada Pension Plan disability or survivor benefits.

Depending on where you have worked over the years, you may have paid into both the CPP and QPP. The amount you receive will be calculated according to your contributions to both plans, regardless of which plan pays your benefit.

Tell me more about the Quebec Pension Plan.

As of 2019, the CPP is being gradually enhanced and you will receive higher benefits in exchange for making higher contributions. The enhancement will affect you only if you work and make contributions to the CPP in 2019 or later. Contributions will increase gradually over a 7-year period.

For each year that you work and contribute to the enhanced CPP, the benefit amount you receive will increase. You need to contribute for 40 years to fully benefit from the enhancement. The CPP benefits of someone who contributes for 40 years will increase by one-third to one-half (depending on their earnings) compared to before the enhancement.

The enhancement will increase any CPP retirement, disability and survivor’s pensions you may receive, as well as the post-retirement benefit.

The QPP will have similar enhancements.

No. The calculator helps Canadians understand how each level of the retirement income system will contribute to their future financial security. Your CPP Statement of Contributions provides CPP disability or survivor benefits estimates. Virtually every Canadian contributes to the CPP (or the QPP if you work in Quebec) on earnings from employment or self-employment between specified minimum and maximum levels. Disability or survivor benefits are generally based on your earnings and contributions to the Plan. Both of these benefits have several components, including benefits for children.

Yes. If you are entitled to survivor benefits and you have contributed to the CPP, you can receive a combined survivor/retirement pension.

Yes. Your retirement pension is reduced by 0.6% percent for each month before age 65 that you choose to begin receiving it. This reduction is permanent. This means that if you started receiving your retirement pension at age 60, it would be 36% less than if you had taken it at 65. However, your pension will still increase each year based on increases in the Consumer Price Index.

Yes. Your retirement pension is increased by 0.7% for each month after age 65 that you delay receiving it, until age 70. This means that if you started receiving your CPP retirement pension at age 70, the amount would be 42% higher than if you had taken it at 65.

If you are applying after your 65th birthday, you can choose to receive retroactive pension payments, but they cannot begin earlier than the month after your 65th birthday. In general, you can receive retroactive payments of CPP benefits for up to 12 months (11 months plus the month you apply).

If you delay applying for your CPP retirement pension after you turn 70, you risk losing benefits. There is no financial benefit in delaying your pension after age 70.

Yes, if you choose to start receiving your CPP pension between the ages of 60 and 65, you can continue to work. If you are between the ages of 60 and 65, you and your employer must continue making CPP contributions. Your employer is responsible for deducting these contributions. If you are self-employed, you must contribute both portions.

If you are between the ages of 65 and 70, you can choose to stop contributing. If you don’t take action to stop contributing, you and your employer must continue to make CPP contributions.

Tell me more about how to stop contributing to the Canada Pension Plan.

These contributions will result in CPP post-retirement benefits, which will begin automatically the following year, and are fully indexed and payable for life.

For additional information on how you can further contribute to your financial security after you retire, please consult the Post-Retirement Benefit.

The CPP recognizes that most people have periods when they are not in the labour force. To compensate for periods of unemployment, illness, schooling etc., up to 17% of your low-earnings periods are not counted toward your CPP benefits.

The child rearing provision allows you to not count periods of lower earnings when you worked less or stopped working to care for one or more children under the age of seven. Other periods may also be excluded from the calculation such as times when you received a CPP disability benefit.

For technical reasons, the child rearing provision is not included in the calculator's CPP retirement estimate at this time.

Yes. Pension sharing is permitted for spouses or common-law partners who are living together, who are both at least 60, and who have applied or are receiving a retirement pension. There may be a tax advantage to pension sharing. If you would like to share your pension with your spouse or common-law partner, you must apply.

Tell me more about pension sharing.

When a marriage or common-law relationship ends the CPP credits built up by the couple while they lived together can be divided equally between them. These credits can be split even if one spouse/common-law partner did not pay into the CPP. Credit splitting can affect the CPP entitlements of both former spouses and common-law partners.

Tell me more about credit splitting.

Yes, the other modules that make up the calculator may be helpful, and the CPP module can show you the effects of post-retirement benefits that you might earn.

However, the CPP section is primarily designed for those who are not yet receiving the CPP retirement pension.

Yes, many Canadians contribute to the CPP and their employer-sponsored pension. You will, however, receive two separate payments. It’s a good idea to find out from your employer if your CPP retirement pension will affect your employer pension benefits.

If you have a defined benefit pension plan, the calculation of your pension may take into account the pension you will receive from the CPP, Quebec Pension Plan or Old Age Security. If so, it’s an integrated plan and your employer pension amount will not stay the same throughout your retirement. In most cases, you will receive a higher monthly pension from your employer before age 65 than after 65. Your CPP/QPP amount remains the same once started, except for increases for the cost of living.