Why More Canadians Are Claiming CPP Benefits At 60 – Smart Retirement Choices Explained

The Canada Pension Plan (CPP) is one of the most important retirement programs for Canadians. It is designed to provide income support after you stop working, but you don’t have to wait until age 65 to claim it. In fact, you can start collecting your CPP benefits at age 60.

Many people are unsure whether taking CPP early is the right choice because it reduces the monthly amount you receive. However, for some Canadians, claiming CPP at 60 makes perfect sense.

This article will explain in easy and clear language why some people take CPP benefits early, how it affects other retirement income like OAS, GIS, and TFSA, and what situations make it a smart decision.

Understanding CPP, OAS, and GIS

CPP Benefits: The Canada Revenue Agency (CRA) manages several retirement programs:

• Old Age Security (OAS): Paid to most Canadians at age 65, funded by taxpayer money.
• Guaranteed Income Supplement (GIS): Extra support for low- to middle-income seniors, also starting at 65.
• Canada Pension Plan (CPP): Based on contributions from your salary or business income during your working years.

The key difference is that CPP can be claimed from age 60, while OAS and GIS are only available from age 65.

Common Misconceptions About CPP

Many Canadians mistakenly believe that you can only claim CPP after retiring. This is not true. You can still work and collect CPP at the same time.

• If you keep working before age 65, you must continue contributing to CPP. These extra contributions will increase your post-retirement benefit later.
• After age 65, you can choose to stop contributing to CPP even if you keep working.

This flexibility gives you options to plan your retirement income the way it suits you best.

Reasons to Claim CPP Benefits at Age 60

1. Unemployment or Need for Immediate Income

If you are unemployed and need financial help, you can start claiming CPP at 60.
The CRA calculates your CPP payment based on your best 39 years of earnings. For people who cannot find a job in their early 60s, this early payment can provide stability.

2. Higher Dividend Income Instead of Salary

CPP contributions are only taken from salary or business income, not from dividends.

• If you are a business owner and paid yourself more dividends than salary, you likely did not contribute much to CPP.
• This means your CPP benefit will be smaller, even if you wait until 70.
  In this case, claiming CPP early may be a smart choice, since delaying won’t give you a much larger payout.

3. Single and Lower Life Expectancy

CPP payments last until you die. If you are single and believe you have a shorter life expectancy, waiting until 65 or 70 to claim may not benefit you.

• If you pass away early, you will miss out on years of payments.
• For married or common-law partners, your spouse (aged 65+) may get up to 60% of your CPP payout after your death.

But if you are single, there is no survivor to collect after you. That’s why some people choose to start CPP at 60 to make the most of their contributions.

Building Extra Income with TFSA

Another smart move is to build income using a Tax-Free Savings Account (TFSA).

• CPP is taxable, but TFSA income is not.
• TFSA withdrawals do not affect your OAS clawback (reduction of OAS if your income is too high).
• This means you can collect CPP, OAS, GIS, and TFSA income without increasing your tax bill.

By investing in dividend-paying stocks inside a TFSA, you can create a steady income stream that supports your retirement.

Example: Investing in goeasy (GSY)

One popular Canadian stock is goeasy Ltd. (TSX:GSY).

• The company has a dividend growth rate of 20–30% per year.
• It pays dividends and also buys back shares, which increases value for investors.
• Even after challenges during the 2008–09 financial crisis, goeasy built a stronger credit system and continues to grow.

Example Calculation:
If you invest $10,000 in goeasy in 2025:

• You can buy around 49 shares.
• Current dividend per share = $5.84 (2025).
• Annual dividend income = $286.16.
• If dividends grow at 20% per year, by 2035 your dividend income could reach $1,476 annually.

You can reinvest this income in other dividend stocks like Canadian Natural Resources, increasing your tax-free income through TFSA.

Claiming CPP at 60

Situation	Why Claim CPP Early?	Why Wait Until 65/70?
Unemployed / Need money now	Provides immediate income	Waiting could increase payout
Business owners with dividends	CPP payout won’t grow much later	Delaying may not help
Shorter life expectancy	Collect benefits earlier	Risk of losing years of payment
Healthy and expect long life	Early claim may reduce lifetime benefit	Waiting gives higher monthly CPP
Want to invest in TFSA	Start early and grow investments tax-free	Delay only if other income covers

CPP Benefits: Claiming CPP benefits at 60 is a personal choice that depends on your health, employment, and financial situation. If you need money right away, expect a shorter life span, or rely on dividend income instead of salary, taking CPP early can be the best move.

However, if you are healthy and can wait, delaying your CPP until 65 or 70 may give you a higher monthly payout for life.

The smartest strategy is to combine CPP with TFSA investments, so you can enjoy tax-free growth and protect your OAS benefits. Planning early and balancing all income sources ensures a comfortable and stress-free retirement.

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