Ep 180 - What Most People Get Wrong About When to Take CPP
When it comes to CPP and OAS timing, most Canadians ask the wrong question: “What if I die early?” In this episode, Joe Curry reframes CPP as longevity insurance - a core part of retirement income planning designed to protect you from the real financial risk: living longer than expected and running out of money.
Key Takeaways
CPP is insurance, not an investment.
It’s not about maximizing returns or winning a break-even calculation. It’s about protecting your retirement income if you live a long life.
The financial risk flips at retirement.
Before financial independence, dying early is the risk. After retirement, living too long is the bigger financial challenge.
Break-even math misses the bigger picture.
Focusing only on when you “get your money back” ignores inflation, market volatility, and sequence of returns risk.
Delaying CPP can strengthen long-term security.
Higher, inflation-adjusted lifetime payments provide stability when your portfolio has been supporting you for decades.
CPP decisions should never be made in isolation.
Your RRSP/RRIF withdrawals, tax-efficient investing strategy, and overall retirement income plan must work together.
Insights Worth Sharing
“CPP isn’t about winning if you die early. It’s about not losing if you live long.”
“The real risk in retirement isn’t dying too soon. It’s running out of money while you’re still here.”
“Break-even thinking misses the point of what CPP was designed to do.”
“Before retirement, dying early is the risk. After retirement, living longer is the risk.”
“CPP decisions should never be made in isolation — they’re part of your full retirement income plan.”
What If I Die Early? Why That’s the Wrong Question About CPP
Almost every time CPP comes up in conversation, someone asks: “But what if I die early?”
It sounds logical. It feels responsible. But it’s the wrong question.
If you’re approaching retirement or already there, your CPP decision shouldn’t be framed around break-even math or trying to “get your money back.” It should be part of a thoughtful retirement income planning strategy designed to protect you from the risk you can’t afford - living longer than expected.
CPP Is Insurance, Not an Investment
Think back to when you bought life insurance. You didn’t buy it to maximize returns. You bought it to protect your family from a financial catastrophe.
CPP works the same way.
Before financial independence, dying early is financially devastating. But once you’ve built your nest egg, paid down your mortgage, and your children are independent, the financial risk flips. The greater danger isn’t passing away too soon — it’s living 25 or 30 years in retirement and watching inflation, market volatility, and withdrawals slowly pressure your portfolio.
That’s where CPP fits in.
It’s guaranteed, inflation-adjusted income for life. It doesn’t care about market downturns. It doesn’t care about sequence of returns risk. It simply keeps showing up every month.
Why Break-Even Thinking Falls Short
Many Canadians focus on when they’ll “break even” if they delay CPP to age 70.
But retirement income planning isn’t about winning a spreadsheet exercise. It’s about building stability over decades.
If markets disappoint early in retirement, your portfolio can be permanently affected. If inflation persists, your withdrawals must increase. If you live into your 90s, which statistically many Canadians will, that’s a long time for money to keep working.
Delaying CPP isn’t a bet that you’ll live forever. It’s insurance in case you do.
When Taking CPP Early Can Make Sense
There are situations where starting CPP earlier is appropriate:
• You have a clearly shortened life expectancy.
• You have limited savings and need immediate cash flow.
• Your income needs are unusually high early in retirement and drop significantly later.
• You are financially secure enough that CPP timing won’t materially impact your plan.
But these decisions should be made within a broader retirement income strategy, alongside RRSP and RRIF withdrawal strategies, tax-efficient investing, and OAS timing.
The Bigger Risk in Retirement
We don’t typically see retirees run out of money at age 67.
We see strain show up at 85 or 90, when portfolios have supported decades of withdrawals and flexibility is limited.
The biggest financial risk in retirement isn’t dying too soon. It’s running out of money while you’re still here.
That’s the lens your CPP decision deserves.
Learn more about our retirement planning process at MatthewsAndAssociates.ca.