What Dates Can You Expect CPP Payments? 2023
Tuesday, November 28, 2023
What Dates Can You Expect CPP Payments? 2023
Tuesday, November 28, 2023
Mitch Zaba
Everything you need to know about the Canada Pension Plan in 2023. This article covers payment dates, inflation adjustments, and even how to apply and what considerations you should plan for what age to start taking CPP.
CPP (and OAS) Payment Dates
You can expect your Canada Pension Payments on the following dates in 2023:
- January 27, 2023
- February 24, 2023
- March 29, 2023
- April 26, 2023
- May 29, 2023
- June 28, 2023
- July 27, 2023
- August 29, 2023
- September 27, 2023
- October 27, 2023
- November 28, 2023
- December 20, 2023
You can expect your Canada Pension Payments on the following dates in 2023:
CPP (and OAS) Payment Dates
CPP amounts are adjusted for inflation, using the Consumer Price Index (CPI), once a year in January. The rate increase is the percentage change from the 12 months of October 1st to September 30th of the previous two years. For 2023's CPP inflation adjustment, the 6.3% increase was determined by the CPI difference between the end of September 2021 and 2022.
If the cost of living magically decreases one year, CPP payments cannot decrease as a result. The Canada Pension Plan Act declares that CPP payments must remain at the same level as the year before.
Where to Find Your CPP Payment Amounts
You can find your CPP payment amounts on your My Service Canada Account here.
This includes individuals not yet receiving CPP payments. You can do some advance retirement planning by discovering your monthly CPP payment amounts at various ages after the age of 60. This is helpful to determine if it makes sense to take CPP at age 60 or defer until age 65 or 70.
For more information on this decision, read our article, "Unlock 4 Surprising New Opportunities by Taking CPP At Age 70"
How to Apply for Canada Pension Plan
There are two ways you can apply to start your CPP payments, online and by paper.
By far the fastest way to apply, and begin your CPP payments is to apply online. Online you will receive a notice of the decision by mail between 7-14 days. By paper, it can take up to 4 months to receive an answer, longer if there are errors on your application.
To apply online you'll need a My Service Canada Account. If you don't have a My Service Canada Account, you can register for one here.
To apply by paper, you can download the paper application here.
There are some instances when you MUST apply by paper. In general, they are:
- You have previously received a CPP disability benefit or were declined to receive a CPP disability benefit.
- You were denied a CPP children's benefit under the age of 18 or a children's benefit was not paid directly to you.
- You live outside of Canada.
- You have an authorized Power of Attorney or Trustee
If you think you fall into one of these categories, check the official website here.
You Can Cancel Your CPP Pension After Starting
You can cancel your CPP retirement pension up to 12 months after you start receiving it. You must request the cancellation in writing. You must also pay back all of the CPP income you’ve received. To cancel your benefit, contact Service Canada
How long does it take to receive your first CPP payment?
You can expect to receive your first Canada Pension Plan Payment 7-14 days after you submitted your online application and up to 120 days after a paper application.
If you think you want to start collecting CPP, it's best to apply months in advance of your planned start date, ie. your 65th birthday. On your application, you can select your start date (65th birthday). This will allow for any errors to be corrected and your payments to start on time.
What age should you start CPP payments?
There are many different expert opinions on the best age to start taking CPP payments. The normal retirement age for Canada Pension Plan is age 65. You can start CPP payments as early as age 60 and as late as age 70.
Starting CPP at age 60 will result in a 36% penalty, calculated at 0.60% per month. Deferring CPP payments to age 70 will result in a 42% increase in payments, calculated as 0.70% per month.
The case for taking CPP at age 60
Most Canadians are still choosing to take CPP at age 60 without much consideration. The arguments I usually hear are:
- "I paid all this money into the program, I may as well get some money out." This is a fear of dying young and subsequently not receiving as much CPP as they put into it.
- "I can make more money on my investments than CPP". Some people believe they can compound their money greater than the 7.2% CPP penalty. If this is true of an investor, it would make sense to take CPP early and let their investments grow by taking out less.
- "I need the money to eat". If you're struggling to get by at age 60, then CPP could help to reduce your monthly financial burden.
The case for taking CPP at age 60
In my article, "Unlock 4 Surprising New Opportunities by Taking CPP At Age 70", I discuss 4 benefits of deferring CPP to age 70 and why it's my preferred choice.
Here is a summary:
- Inflation creates a larger increase than the automatic 42% bonus. If you defer CPP payments to age 70, you will receive an automatic bonus of 42% PLUS adjustments for inflation. This creates a profound effect on your total CPP payment amounts.
- Deferring CPP creates an opportunity to lower your tax bill while living. From age 60 to 70, you could redeem your taxable accounts, like an RRSP, faster which could lower your overall tax bill.
- Following up on point 2, this could also reduce your taxes owing on death. Any money left in an RRSP on your death, or second death for married and common-law partners, has to be taken into income. That could mean dying with $300,000 in an RRSP account which results in a 48% (or higher) tax bracket.
- Deferring CPP reduced investment risk, inflation risk, and longevity risk. Income payments from CPP are not subject to stock market volatility, are adjusted annually for inflation, and pay until you die. These are 3 major risks checked off for a retired person or couple.
Conclusion
In conclusion, the age at which to start CPP payments is an important decision that needs to be thoughtfully considered. Taking CPP at age 60 may make sense if you need the money or believe your investments will compound higher than 7.2%. On the contrary, deferring CPP to age 70 can create a powerful opportunity to lower your taxes while living and on death, as well as reduce risk associated with retirement income sources such as stock market volatility and inflation.
Ultimately, it comes down to what works best for your particular situation and financial goals.
Hi, I Am Mitch Zaba
Over the past 10+ years, we've worked closely with clients showing them how to grow their wealth, pay less taxes and how to create predictable passive income in the stock market.
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