1.      You must take CPP at age 65

While the standard age for starting Canada Pension Plan (CPP) benefits is 65, this isn’t a requirement. You can begin receiving payments as early as 60, though this comes with a permanent reduction of 0.6% per month, totaling up to 36% less at age 60. Conversely, delaying CPP until age 70 results in a 0.7% increase per month, leading to up to 42% more. The ideal time to start depends on factors like health, financial situation, and life expectancy.

2.      CPP will provide enough income for retirement

CPP was never designed to be your only source of retirement income. The maximum monthly CPP payment in 2025 is about $1,400, but the average payment is much lower, around $750 per month. Most financial advisors suggest you’ll need 70-80% of your working income during retirement. CPP typically replaces only about 25-33% of pre-retirement earnings, so additional savings through RRSPs, TFSAs, and other investments are essential.

3.      You need to stop working to collect CPP

Many Canadians believe they must fully retire before collecting CPP benefits. This is not true. You can continue working full time or part time while receiving CPP payments. However, if you’re under 65 and still working while collecting CPP, you and your employer must continue making CPP contributions. These additional contributions will increase your benefits through the Post-Retirement Benefit, giving you more income in later years.

4.      CPP funds might run out before you retire

The CPP fund is stable and expected to remain sustainable for at least 75 years. The CPP Investment Board professionally manages the fund, which was valued at over $570 billion as of 2025. The fund is regularly reviewed by Canada’s Chief Actuary to ensure it remains solvent. CPP contributions were increased slightly between 2019 and 2023 specifically to strengthen the plan’s long term stability.

5.      You can't collect CPP if you live outside Canada

CPP benefits can be paid to eligible recipients anywhere in the world. If you’ve contributed to CPP and qualify for benefits, you can receive them regardless of where you live during retirement. The payments can be deposited directly into a Canadian bank account or, in many cases, into a foreign bank account. However, non residents may be subject to a 25% withholding tax, though this can be reduced by tax treaties between Canada and your country of residence.

6.      CPP benefits are the same for everyone

CPP payments vary widely based on how much and how long you contributed to the plan. Your benefit amount depends on your average earnings throughout your working life, the number of years you contributed, and at what age you start collecting benefits. The CPP calculation uses your best 40 years of earnings up to age 70. Taking time off work, working part time, or having years of lower income will reduce your CPP benefits unless you use provisions like the child-rearing dropout provision.

7.      You should always take CPP early

While some financial advisors encourage taking Canada Pension Plan (CPP) benefits early at 60 to access funds sooner, this isn’t always the best move. Waiting until 65 typically results in higher total benefits if you live past 74, and delaying until 70 provides the greatest lifetime payout for those reaching their 80s. The best decision depends on individual factors such as health, longevity, financial needs, and other income sources.

8.      CPP survivor benefits replace the deceased's full pension

CPP survivor benefits do not provide the deceased’s full pension to the surviving spouse. Instead, a formula determines the amount, combining the survivor benefit with the recipient’s own CPP entitlement while capping the total at the maximum allowable CPP payment. If the survivor already receives the maximum CPP benefit, they may get little to no extra compensation from the survivor benefit.

9.      You can't increase your CPP after you've started collecting it

Even after you start receiving CPP, you can still grow your benefits by continuing to work. Between ages 60 and 70, both you and your employer must contribute to CPP if you’re employed while collecting payments. These contributions go toward a separate benefit known as the Post-Retirement Benefit, which is added to your regular CPP income. Each year of contributions results in a small, permanent boost to your monthly payment.

10.  RRSP withdrawals affect your CPP benefits

CPP benefits are based solely on your contributions to the CPP program during your working years and are not affected by your RRSP withdrawals or other retirement income. However, RRSP withdrawals are considered taxable income and may push you into a higher tax bracket. This could potentially affect the amount of OAS benefits you receive if your income exceeds the threshold for the OAS clawback, which begins around $86,000 in 2025.

11.  You can't work past 65 and increase your CPP

Working beyond age 65, even to age 70, can significantly boost your CPP benefits. Each month you delay taking CPP after 65 increases your payment by 0.7%. Additionally, if you continue working and making CPP contributions during these years, you can replace lower earning years in your contribution history with these higher earning years. This “drop-in” effect can substantially increase your pension, especially if you had years with lower income or gaps in your work history.

12.  Self-employed people pay double CPP contributions for no extra benefit

Self-employed Canadians do pay both the employee and employer portions of CPP contributions, which is double what employees pay. However, this doesn’t mean they’re getting poor value. These contributions generate exactly the same CPP benefits as someone who is employed with the employer making half the contribution. The tax system recognizes this burden, allowing self-employed people to deduct the employer portion of CPP contributions from their income, reducing their overall tax bill.