CPP/QPP Optimization Insight

The Insight for Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) is a specialized tool crafted to assist individuals in identifying the most advantageous age to initiate their benefits within their CPP plan. By simulating the starting of benefits at an earlier stage to potentially invest any surplus funds, this tool calculates the breakeven age in comparison to delaying benefits until the maximum eligible age.

Looking at the example below we have a client who is expected to live until age 90 and the adviser would like to check if their plan of starting to receive CPP/QPP benefits at age 65 is the most optimal. 

If your CPP/QPP break-even age is 84 and you start taking your benefits at age 65 but your expected mortality is 90, it may be considered financially advantageous to delay taking your benefits past age 65,

Total amount received from CPP/QPP = Total of all Future Value CPP/QPP Received from Inputted starting age until inputted mortality.

Value of Investible Excess at 70 = Uses the % listed in the surplus investment account to create a phantom investment account where contributions of excess CPP/QPP from the start age until 69 and growth at the inputted growth rate until 70

CPP/QPP Break-Even Age = The age at which the phantom investment account starting at age 70 surpasses the account started at the inputted start age; using surplus contributions and the inputted Growth Rate. e.g. a CPP/QPP break-even age of 84 means that the client would need to live to age 84 for the start age to be the most optimal.

See a demonstration below.