To help understand how CPP integration affects your OPTrust pension, it helps to think about it this way. If you retire before the age of 65, your OPTrust pension includes two amounts:
- your CPP-integrated pension, which will continue for your lifetime and
- an additional “top up” amount that continues until age 65, when CPP
typically begins.
The “top up” amount from OPTrust is designed to even out your combined pension income before and after age 65. However, as the previous example shows, your decision about when to start receiving CPP benefits will affect your combined pension income amount at different ages.
Other factors to consider
There are a number of factors you should take into consideration in deciding when to start receiving CPP. These may include your life expectancy, your financial plans and your financial needs in retirement.
In Luis’s example, if he lives to be much older than 75, taking CPP early would mean a lower total income over his lifetime. That is why some people who expect to live into their eighties or nineties choose not to start CPP until age 65. OPTrust’s actuaries estimate that women who retire at age 60 will live to 84, on average. Men who retire at age 60 are expected to live to an average of age 79.
On the other hand, some people take CPP early to help with costs such as their children’s education, mortgage payments or travel. Others may take CPP early because they expect their financial needs to decrease after age 65. It is a good idea to consider a range of financial, family, health and other factors in making the best choice for you.