April has officially arrived and Canadians are expected to receive payments from various Government of Canada benefits and credits this month, including the upcoming Canada Pension Plan (CPP) payment.
The monthly retirement pension plan is a taxable benefit that replaces a portion of your income when you are no longer in the workforce. For those who qualify, Canada Pension Plan payments will be given for the rest of your life upon retirement, per the Canada Revenue Agency (CRA).
Canada Pension Plan eligibility
To qualify for a Canada Pension Plan retirement pension, you need to be at least 60 years old and have made at least one valid contribution. Contributions can come from work in Canada or credits from a former spouse or common-law partner, according to the federal agency.
You can work without reducing the pension amount if you’re receiving a CPP retirement pension. In fact, you might even increase it with the CPP post-retirement benefit. If you’re under 70 and working while receiving CPP, you can contribute, leading to a post-retirement benefit and higher retirement income.
You can stop post-retirement contributions at 65, and CPP contributions cease at 70, even if you’re still working. If you lived and worked in Quebec, both the Canada Pension Plan and the Québec Pension Plan ensure you receive a retirement pension.
How much you can get from the Canada Pension Plan
Your CPP retirement pension is calculated based on several factors including the age you choose to start receiving it, your contributions to the CPP and their duration and your average earnings throughout your career.
In 2024, starting your pension at age 65 could result in a maximum monthly payment of $1,364.60. However, the actual amount you receive depends on your unique circumstances, up to this maximum.
You can estimate your monthly CPP retirement pension through your My Service Canada Account. If you don’t have one, you can register to receive a personal access code. Additionally, the Canadian Retirement Income Calculator offers more accurate and detailed figures of how much you can expect to receive every month.
When you can start receiving your Canadian pension
According to the Canada Revenue Agency, you can begin receiving your pension at 65, but options exist to start as early as 60 or as late as 70.
Starting earlier results in smaller monthly payments, while delaying increases the amount you receive monthly while waiting past 70 doesn’t offer additional benefits, considering the maximum monthly amount is reached by then.
When you can start receiving your Canadian pension
According to the Canada Revenue Agency, you can begin receiving your pension at 65, but options exist to start as early as 60 or as late as 70.
Starting earlier results in smaller monthly payments, while delaying increases the amount you receive monthly while waiting past 70 doesn’t offer additional benefits, considering the maximum monthly amount is reached by then.
How to receive your Canada Pension Plan payment
Once you begin your CPP retirement pension, you’ll receive lifelong payments. Your monthly amount may increase annually in January if there’s a rise in the Consumer Price Index, but it won’t decrease if the index falls.
Payments are directly deposited into your bank account monthly, or if you didn’t opt for direct deposit, a check will be mailed during the last three business days of each month.
This article’s cover image was used for illustrative purposes only.
Source: MTL Blog
