The long summer evenings are over. The kids are back at school; homework, lessons and sports practice have begun to fill the family calendar again. Summer holidays and backyard BBQs are now just photo memories on our phones and social media accounts. But that’s OK. September brings its own “fresh start” energy. It’s a time to look toward new challenges at work, winter vacations and even plans for next summer. Because, really, what is all our hard work for, if not, at least in part, to afford time with friends and family?

In fact, as you ease into a busier fall schedule, it’s a great opportunity to pause and remember why you work hard, and to recommit to your life goals—including your important retirement goals. Who doesn’t dream of the day when all four seasons are theirs to shape and enjoy?

But retirement looks very different to everyone, and one of the most important things to consider when planning yours, is the optimal time to apply for Canada Pension Plan (CPP) benefits. All it takes is a bit of calculated foresight, to make the decision that will best suit your circumstances.

Here’s a look at some basics:

Canada Pension Plan benefits can be drawn as early as age 60 (reduced 0.6% for each month before 65) or as late as age 70 (increased 0.7% for each month after 65).

The average life expectancy for Canadians is age 80 for men and 84 for women. Statistics Canada predicts a continued rise in life expectancy of roughly two years over the next 15 years.

Things to consider:

Life expectancy

Contemplating your mortality may feel uncomfortable, but your health and whether or not longevity is a family trait, are things to consider when making your decision.

If you take your CPP starting at age 60, your breakeven point with someone who waits until age 65 is when you both turn 74. Confused? Let me put it another way; if Mary takes her CPP at 60 and Brenda takes hers at 65, Mary’s monthly CPP payment will be 36% lower than Brenda’s, but she will collect five years longer. They will be 74 when Brenda pulls ahead of Mary for overall amount collected.

CPP Breakeven Point Chart 

2016-04-18_1142Working and collecting CPP

If you believe good genes are on your side and there is a strong chance you’ll be collecting CPP into your 80s, it may be beneficial to wait until age 70, but only if you can afford to do so. How much cash flow you have from other sources is as important a consideration as your health. If you are living on a restricted income it may be better to take CPP sooner and enjoy an improved quality of life while you are best able to appreciate it.

Even if you don’t retire at age 60 you are eligible to collect CPP, but you and your employer will still be required to make CPP contributions until age 65. If you are still working between ages 65 and 70 you are no longer required to contribute (whether you are collecting CPP or not), though you may choose to, thereby increasing your CPP benefits.