Preparing for retirement is a smart financial decision—especially for working Canadians who are now a long way off from retirement with the CPP, or Canada Pension Plan. Whether you’re years away from retirement or wondering when to start collecting a pension, knowing how much you can expect to receive each month and how to maximize that amount is important. The pension provided by the CPP in 2025 ranges from $816 to $1,364 per month, depending on your contributions and age at which you receive a pension. We explain in detail below.
CPP: A Simple Introduction
CPP (Canada Pension Plan): It is a compulsory social insurance program in Canada. It aims to provide a pension in retirement with the help of your contributions while on the job.
Why is it important?
The CPP is an important part of your financial security in retirement. Regular contributions provide a guaranteed income each month, which helps you live comfortably.
Who contributes?
Both employed people and their employers contribute to the CPP. If you work for yourself (self-employed), you must contribute both the employee and employer portions.
CPP Payment Details in 2025
Description Amount:
- Minimum monthly payment: $816
- Maximum monthly payment (age 65): $1,364
- Average for new retirees: $1,064
- Delay after 65: +0.7% boost per month
- Start before 65: –0.6% reduction per month
If you made regular contributions at a high income for a long period of time, you could get a monthly pension closer to $1,364, not the lower difference ($816).
Let’s Take a Look at This Example
- Starting at 60: About $872 per month (36% reduction) – if you made the maximum contribution.
- Start at 65: Full payout i.e. $1,364 per month.
- Wait till 70: About $1,936 per month (42% increase) – highest amount!
When to Take CPP: Choice Between 60–70 Years
60 Years
- Starts early but also has a 0.6% monthly deduction.
- Low pension but mildly confused.
- Good for people in normal health but want to retire early.
65 Years
- Base balance.
- Monthly maximum payout $1,364.
- Successful medium plan, where you can still work but also retire.
70 Years
- Maximum monthly benefit – about $1,936.
- 0.7% per month bonus if you delay.
- Businessmen, healthy, and financially stable people choose this.
Eligibility: Who Can Take CPP?
- At least 60 years of age.
- At least one year of contributions required.
- Must have earned at least $3,500 in a job (per year).
- Canadian resident or have work experience in Canada.
- Under international agreement, contributions may also be accepted from abroad.
How Contributions Work
- Year’s Basic Exemption: $3,500 – No contribution on income up to this amount.
Contributions on Higher Income
- Maximum annual contribution (employee + employer) can be up to $3,166.45 in 2025.
- Self-employed pay this entire amount themselves.
Higher contributions = higher pension in the future.
Are There Benefits for Spouses Too?
Yes, there are three main ways a spouse can benefit:
Survivor Benefits
After the death of a spouse, you can receive up to 60% of their CPP benefits.
Pension Sharing
At retirement, both spouses can share a pension, which can lead to tax savings.
Divorce or Separation Credit Splitting
Contributions from expensive years of living together can be split.
Tips for Maximum Benefits
- Contribute every year
- Even if you work part-time, contributions add up in a positive way.
- Don’t take a gap in work.
- Delay pension
- Waiting until age 70 can result in more than $600 per month in benefits.
- Check your contributions
- Log into “My Service Canada Account” to check your record.
- Consider voluntary contributions
- If you own a business or are unable to pay a certain amount, additional contributions are beneficial.
- Plan long-term
- Consider lifestyle, health, other financial sources (OAS, RRSP, Arabic pensions).
How to Apply for CPP
Online (My Service Canada Account)
- Log in, fill out the application form, and submit.
By Phone or Mail
- Call Service Canada, get the application, fill it out and submit.
Download Time
- Apply at least 6 months before your expected retirement date.
- This will prevent payment delays.
Read more: Young People Face Up to £100 Weekly Loss Under New DWP Universal Credit Changes
Required Documents
- SIN (Social Insurance Number)
- Bank details (Direct Deposit)
- Employment history (if required)
Bonus: Delay Calculation
After age 65, you earn 0.7% more per month (8.4% annually).
Example: $1,364 × 1.42 (42% bonus) = approx $1,936 per month if you wait until age 70.
Broad Example
- You are 65 and receive a maximum pension of $1,364.
Start now: $1,364 per month
Delay until 70: $1,936 per month (approximately +$572 per month)
Start at 60: $872 per month (-$492 per month)
Decision
What to do: Consider health, other investments, and lifestyle, and generational factors.
Plan Ahead
- Compare the amount of your CPP and other resources at ages 60, 65, and 70.
- Consider age, health, and crippling pain.
- Build a strong retirement strategy by combining RRSP, OAS, post-65 financial plans.
- Plan for retirement start, investment habits, and benefits in advance.
Frequently Asked Questions (FAQs)
Q1. How old can you start receiving CPP?
A: Typically age 60, but you have control over your retirement.
Q2. What is the maximum CPP in 2025?
A: The maximum amount is $1,364 per month (age 65).
Q3. How do I apply for CPP?
A: Online (My Service Canada Account) or by phone/post.
Q4. Is CPP taxable?
A: Yes, CPP has to be included in your annual tax return.
Q5. Can CPP and OAS be combined?
A: Yes, both pensions are combined (OAS = Old Age Security).
Conclusion
The Canada Pension Plan (CPP) is at the heart of your retirement journey. Whether you’re 60, 65, or approaching 70, knowing how much pension you have and how you can increase it is critical. Regular contributions, self-record checking, delayed benefits, and optional fee-based contributions—all combine to make your retirement secure and robust.
Plus, combine OAS, RRSPs, workplace pensions, and any investment plans to give you more financial security and flexibility in retirement.
Now’s the time to plan, update records, and make your retirement dreams a reality!
