I want to retire. Can I get CPP benefits?

You may be able to get Canada Pension Plan (CPP) retirement benefits if you:

• worked in Canada, and
• made CPP contributions while you worked.

The Canadian government manages the CPP and it’s for people everywhere in Canada, except for Quebec. Quebec has its own Quebec Pension Plan and the rules for it are different.

Most people start to get their CPP retirement benefits at age 65. But you can apply for:

• a reduced pension as early as 60, which means you get a lower amount each month, or
• an increased pension if you delay to age 70, which means you get a higher amount each month.

You must apply in the 12 months before you plan to start getting benefits.

CPP contributions

In general, when you work in Canada, except for Quebec, and earn more than $3,500 per year, you must contribute to the CPP. These are called CPP contributions. You make them so you can use the money later in life when you’re likely to have retired.

If you have an employer, your employer pays half of your CPP contribution and the other half is generally taken directly off your paycheque.

If you’re self-employed, you have to make the entire contribution on your own.

The amount of the CPP contributions you have to make depends on your “pensionable earnings”. Pensionable earnings are what someone earns each year between a minimum and maximum amount. The minimum is $3,500. And the government sets the maximum in January of each year, based on increases to the average wage in Canada.

For example, in 2020, the maximum pensionable earnings are $58,700.

Your CPP contributions are a percentage of your pensionable earnings. For example, in 2020, the employee and employer both contribute 5.25% of the employee’s pensionable earnings.

Sometimes the money you earn while working outside Canada counts towards your CPP retirement benefits. This happens if Canada has a social security agreement with the country where you worked.

Canada has a social security agreement with 50 countries. These agreements co-ordinate government pensions for people who lived or worked in both countries.

If you’re a First Nations person, money you earn from working on a reserve may also count towards your CPP retirement benefits.

CPP increases

Beginning in 2019, the government made changes that will gradually increase the income that CPP provides. So, from 2019 to 2025, the CPP contributions you make will increase. But you’ll also get higher benefits when you start getting CPP.

These changes, called the CPP enhancement, only affect people who are working as of 2019 and making CPP contributions.

Other benefits for seniors

You may be able to get other government benefits if you’re over 65. These include Old Age Security and other benefits, such as the Guaranteed Income Supplement or Allowance.