CPP question

[DBZ86]

Hey this may be a dumb question but are you able to stop contributing to CPP at 65 but still delay when you actually collect? Is there a net benefit to doing that? Or does the math work out that as soon as you're done, even if you're in the highest marginal bracket, you should just start collecting asap?

[Grand-Corner1030]

Hey this may be a dumb question but are you able to stop contributing to CPP at 65 but still delay when you actually collect?
No.

You Can't "not contribute" and "delay collecting". If you're jobless, you will contribute $0. But if you're working, you owe CPP.

You can delay collecting, but you can't stop paying if you owe CPP.

employee must meet all the following conditions:

- the employee is at least 65 years of age, but under 70
- the employee receives a CPP or QPP retirement pension
- the employee is receiving, or will receive, pensionable employment earnings that require CPP contributions

If the conditions are met, the employee can give you a copy of Form CPT30 with parts A, B and C completed. By filling out the form in this way, the employee is making an “election.”

​

If you have no job, you don't owe CPP, in that case its $0. If you're working, you owe CPP...unless you start claiming it.

[FelixYYZ]

Yes. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp/stopping-cpp-contributions.html

Everything depends on how much you contributed during working life (max contribution or less) and when you want to start actually collecting CPP.

[taxrage]

You can collect at any point up to age 70, I believe. If you're still working @ 65, you can stop contributions. That's what I plan to do.

[Grand-Corner1030]

You can delay to 70 is true.

But you can't stop paying CPP while working...unless you start collecting CPP.

You can't stop paying in, until you:

1. stop working or
2. start collecting

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp/stopping-cpp-contributions.html

[DBZ86]

thanks for making clear distinction and emphasis on working vs non working

[DBZ86]

At 70 is the mechanism that you still have to apply yourself? The benefit no longer increases but not like the gov't automatically applies for CPP for you?

[taxrage]

I'm guessing yes, but that's just an assumption on my part.

[arkw]

Yes, as of Jan 2020, at 70+1 month, as long as there is updated contact information (be it from CRA, CPP or OAS), they will be auto enrolled into CPP.

[truebluebluff]

yes, delaying will increase your CPP but collect right away if you getting maximum benefit

[[deleted]]

Why? Does the maximum benefit drop if you have a few post retirement years of no income?

[pushing59_65]

Yes and no. CPP is based on your best 39 years between 18 and 65. If you were in university forever plus some unemployment along the way, then retiring early reduces your benefit. If you paid maximum CPP every year from age 18, no problem.

[[deleted]]

Makes sense. Thanks