Taking the Canada Pension Plan (CPP) early gives you access to your retirement pension before age 65, but the tradeoff is a permanently smaller monthly payment. The reduction begins with the month you start CPP, so starting at 60 affects your pension much more than starting at 64. CPP can start as early as age 60. If you start before 65, your pension is reduced by 0.6% for each month you start early, or 7.2% per year. Starting at exactly 60 results in the maximum early-start reduction of 36%, and the reduced pension continues for life.
How Much Is CPP Reduced If You Take It Early?
The CPP starting-age adjustment is calculated by month rather than simply by the year you retire. Each month before your 65th birthday reduces your pension by 0.6%. That means starting 12 months early produces a 7.2% reduction, while starting 30 months early produces an 18% reduction.
The table makes the effect easier to see. These percentages apply to the CPP amount you would otherwise receive at 65 based on your own contribution record.
| Age CPP starts | Months before 65 | Reduction |
|---|---|---|
| 60 | 60 | 36% |
| 61 | 48 | 28.8% |
| 62 | 36 | 21.6% |
| 63 | 24 | 14.4% |
| 64 | 12 | 7.2% |
| 65 | 0 | No early-start reduction |
For example, someone entitled to $1,000 per month at 65 would receive $640 per month if the same pension started exactly at 60. Starting at 62 would reduce it to $784, while starting at 64 would produce $928. Your actual starting amount depends on how your CPP is calculated, so the $1,000 figure is only a clean way to show the percentage adjustment.
The Early CPP Reduction Is Permanent
A common mistake is assuming the reduction lasts only until age 65. It does not. Once you start CPP early, the age adjustment remains part of your pension calculation. Your payment does not jump back to the unreduced age-65 amount when you turn 65.
Your payment can still change for other reasons. CPP benefits already in payment are adjusted annually based on changes in the Consumer Price Index, and working while receiving CPP can create additional post-retirement benefits. Those changes do not cancel the original early-start reduction. This is why it is useful to separate the percentage reduction from the other factors that can change how much CPP you receive.
What Happens If You Keep Working After Taking CPP Early?
Starting CPP does not require you to stop working. If you are between 60 and 65 and work while receiving your CPP retirement pension, you must continue making CPP contributions on pensionable employment earnings. Those contributions go toward the CPP Post-Retirement Benefit, which creates an additional lifetime monthly benefit.
Each year of eligible contributions while collecting CPP can generate a new Post-Retirement Benefit that is added to your CPP income. Once you reach 65, you can choose to stop contributing, while CPP contributions stop at 70. The additional benefit does not erase the reduction applied when you started the original retirement pension. It is a separate benefit created from your later contributions. Our breakdown of the CPP Post-Retirement Benefit covers that part separately.
Check the Amount Before Starting CPP Early
The percentage reduction is easy to calculate, but the amount being reduced is different for each contributor. Your CPP retirement pension depends on factors such as your pensionable earnings, contribution history and provisions that can exclude certain periods of low or no earnings from the calculation. Your CPP Statement of Contributions shows your recorded pensionable earnings and contributions and can provide an estimate if you are eligible to receive CPP now.
Checking that estimate matters more than applying the early-start percentage to the published maximum CPP pension. Most people do not receive the maximum, so reducing the maximum by 36% will not tell you what you would actually receive at 60. Start with your own estimate, then apply the age effect when comparing potential start dates. You can also review how to check your CPP amount and Statement of Contributions before applying.
Taking CPP early therefore changes the amount you receive for life, not just the payments you receive before 65. Once you know your estimated pension, the Canadian Retirement Income Calculator can help you view CPP alongside your other retirement income before choosing a start date.
