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

Frequently Asked Questions about Canada Pension Plan


A) Canada Pension Plan Contributions

  1. The Canada Pension Plan is referred to as a contributory program. What does this mean?
  2. What other benefits can I receive from the Canada Pension Plan?
  3. What happens if I have also paid into the Quebec Pension Plan?

B) Other Frequently Asked Questions about Canada Pension Plan

  1. Will the Canada Pension Plan section of the calculator help me to estimate the amount of my Canada Pension Plan disability or survivor benefits?
  2. Can I get a Canada Pension Plan survivor benefit and a retirement pension at the same time?
  3. If I plan to begin receiving my retirement pension before the age of 65, will this affect the amount of my pension?
  4. If I plan to begin receiving my Canada Pension Plan retirement pension after the age of 65, will this affect the amount of my pension?
  5. If I plan to begin receiving my Canada Pension Plan retirement pension before the age of 65, can I still continue to work?
  6. Will my Canada Pension Plan pension be reduced because I was unemployed for a while or because I stayed at home until my children were in school?
  7. Can I share my Canada Pension Plan retirement pension with my spouse or common-law partner?
  8. What is credit splitting?
  9. Can I use the calculator if I’m already receiving a Canada Pension Plan Retirement Pension?
  10. Can I contribute to Canada Pension Plan and my company pension?

A) Canada Pension Plan Contributions

1) The Canada Pension Plan is referred to as a contributory program. What does this mean?

Virtually every Canadian contributes to the Canada Pension Plan (or the Quebec Pension Plan 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 Canada Pension Plan pension. Generally, the contributions over this entire period determine the amount of benefits you will receive.

2) What other benefits can I receive from the Canada Pension Plan?

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.

3) What happens if I have also paid into the Quebec Pension Plan?

Depending on where you have worked over the years, you may have paid into both the Canada Pension Plan and Quebec Pension Plan. 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.

B) Other Frequently Asked Questions about Canada Pension Plan

1) Will the Canada Pension Plan section of the calculator help me to estimate the amount of my Canada Pension Plan disability or survivor benefits?

Virtually every Canadian contributes to the Canada Pension Plan (or the Quebec Pension Plan 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.

2) Can I get a Canada Pension Plan survivor benefit and a retirement pension at the same time?

Yes. If you are entitled to survivor benefits and you have contributed to the Canada Pension Plan, you may receive a combined survivor/retirement pension.

3) If I plan to begin receiving my retirement pension before the age of 65, will this affect the amount of my pension?

Yes. Your retirement pension is reduced by a set percentage for each month before age 65 that you choose to begin receiving it. This reduction is permanent.

From 2012 to 2016, the amount of this reduction will gradually increase from 0.52% to 0.6% per month. This means that if you start receiving your retirement pension in 2016 at age 60, it will be 36% less than if you had taken it at 65. The reduction percentage that is in effect the year your retirement pension commences remains in effect for as long as you receive the benefit, and will not change. Your pension may increase each year based on changes in the Consumer Price Index.

Maximum reduction (if pension is taken at age 60)
  • Effective January 2012 to December 2012: 31.2 % (0.52 % per month)
  • Effective January 2013 to December 2013: 32.4 % (0.54 % per month)
  • Effective January 2014 to December 2014: 33.6 % (0.56 % per month)
  • Effective January 2015 to December 2015: 34.8 % (0.58 % per month)
  • Effective January 2016 to December 2016: 36.0 % (0.60 % per month)

4) If I plan to begin receiving my Canada Pension Plan retirement pension after the age of 65, will this affect the amount of my pension?

Yes. Your retirement pension is increased by a set percentage for each month after age 65 that you delay receiving it, until age 70.

From 2011 to 2013, the amount of this increase gradually rose from 0.57% to 0.70% per month. This means that if you start receiving your Canada Pension Plan retirement pension in 2013 at age 70, it will be 42% more than if you had taken it at 65.

Maximum increase (if pension is taken at age 70)
  • Effective January 2011 to December 2011: 34.2 % (0.57 % per month)
  • Effective January 2012 to December 2012: 38.4 % (0.64 % per month)
  • Effective January 2013 to December 2013: 42.0 % (0.70 % per month)
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, we can make retroactive payments of Canada Pension Plan benefits for up to 12 months (11 months plus the month you apply).

If you delay applying for your Canada Pension Plan retirement pension after you turn 70, you risk losing benefits; there is no financial benefit in delaying your pension after age 70.

5) If I plan to begin receiving my Canada Pension Plan retirement pension before the age of 65, can I still continue to work?

Yes, if you choose to start receiving your CPP pension between the ages of 60 and 65, you can still continue to work.

Between age 60 and 65, you and your employer will have to make Canada Pension Plan contributions (4.95% each). The employer is responsible for deducting contributions. Self-employed persons contribute both portions (9.9% total).

Between age 65 and 70, you and your employer will have to make Canada Pension Plan contributions (4.95% each) unless you choose to stop contributing. The employer is responsible for deducting contributions. Self-employed persons contribute both portions (9.9% total).

To find out more about how to stop contributing to the Canada Pension Plan, visit the Canada Revenue Agency website.

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

6) Will my Canada Pension Plan pension be reduced because I was unemployed for a while or because I stayed at home until my children were in school?

The Canada Pension Plan 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 Canada Pension Plan benefits.

Likewise, periods of lower earnings when you were at home caring for children under the age of seven can be excluded when calculating your Canada Pension Plan benefits. Other periods may also be excluded from the calculation, such as times when you received a Canada Pension Plan disability benefit.

For technical reasons, the child rearing drop-out is not included in the calculator's Canada Pension Plan retirement estimate.

7) Can I share my Canada Pension Plan retirement pension with my spouse or common-law partner?

Yes, there may be a tax advantage to doing this. Pension sharing is permitted for spouses or common-law partners who are living together, are both at least 60 and are no longer contributing to Canada Pension Plan. As with other Canada Pension Plan benefits, you must apply.

8) What is credit splitting?

When a marriage or common-law relationship ends the Canada Pension Plan 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 Canada Pension Plan. Credit splitting can affect the Canada Pension Plan entitlements of both former spouses and common-law partners.

Tell me more about credit splitting.

9) Can I use the calculator if I’m already receiving a Canada Pension Plan Retirement Pension?

Yes, the other modules that make up the calculator may be of assistance to you in considering your overall financial situation. The Canada Pension Plan Section is primarily designed for those who are not already receiving the Canada Pension Plan retirement pension.

10) Can I contribute to Canada Pension Plan and my company pension?

Yes, many Canadians contribute to the Canada Pension Plan and their employer-sponsored pension. You will, however, receive two separate payments. It may be helpful for you to find out from your employer if your employer pension benefits are integrated with your Canada Pension Plan retirement pension.

If your pension plan is a Defined Benefit Plan, the way your benefit is calculated may take into account the pension you will receive from Canada Pension Plan, Quebec Pension Plan or Old Age Security. If so, it’s an “integrated” plan and your employer pension amount will not be the same throughout your retirement. In most cases, the monthly pension you receive from your employer before the age of 65 will be different from what you receive after 65. Once you reach 65, the amount you receive from your employer pension will be reduced.

Your Canada Pension Plan/Quebec Pension Plan amount remains the same once started, except for increases for the cost of living. Where your plan is integrated with a public pension, it is the employer pension that will be reduced at 65.

It’s a good idea to find out if your pension is integrated, and to learn how integration will affect your total monthly pension at different stages of your retirement.