Key Takeaways
- CPP payment is a monthly benefit that you can receive when you retire or become disabled.
- The amount of your CPP payment depends on how much and how long you contributed to the CPP, your age, and your disability status.
- You can increase your CPP payment by delaying your retirement, making voluntary contributions, sharing your pension with your spouse, or applying for disability benefits.
- HustleHub can help you plan your retirement and optimize your CPP payment with our expert advice and tools.
Are you looking for ways to increase your CPP payment in 2023? If so, you’re not alone. Many Canadians rely on the Canada Pension Plan (CPP) as a source of income when they retire or become disabled. But how much can you expect to receive from the CPP, and how can you boost your payment amount? In this article, we’ll answer these questions and more. We’ll also show you how HustleHub can help you achieve your retirement goals and maximize your CPP payment.
What is CPP Payment?
CPP payment is a monthly benefit that you can receive from the CPP when you retire or become disabled. The CPP is a mandatory savings program that covers most workers in Canada. You and your employer contribute a percentage of your earnings to the CPP every month. The CPP then invests these contributions and pays you a pension when you retire or become disabled.
The amount of your CPP payment depends on several factors, such as:
- How much and how long you contributed to the CPP
- Your age when you start receiving the CPP payment
- Your disability status (if applicable)
The average CPP payment for new beneficiaries in June 2023 was $772.71 per month. The maximum CPP payment for 2023 is $1,306.57 per month. However, most people don’t receive the maximum amount because they don’t contribute the maximum amount to the CPP. The average CPP contribution rate for 2023 is 5.95% for employees and 11.9% for self-employed individuals.
How to Increase Your CPP Payment?
If you want to receive more money from the CPP, there are some strategies that you can use to increase your payment amount. Here are some of the most common and effective ways to boost your CPP payment:
Also Read: How the CPP Enhancements Will Boost Your Retirement Income
Delay Your Retirement
One of the easiest ways to increase your CPP payment is to delay your retirement. The CPP payment is designed to replace about 25% of your average pre-retirement earnings. However, if you start receiving the CPP payment before the age of 65, your payment will be reduced by 0.6% for every month that you take it early⁴. This means that if you start receiving the CPP payment at the age of 60, your payment will be 36% lower than if you waited until the age of 65.
On the other hand, if you delay your retirement and start receiving the CPP payment after the age of 65, your payment will increase by 0.7% for every month that you delay it. This means that if you start receiving the CPP payment at the age of 70, your payment will be 42% higher than if you started at the age of 65.
The table below shows how your CPP payment can vary depending on when you start receiving it:
| Age | CPP Payment (based on the average amount of $772.71) |
| 60 | $494.54 |
| 65 | $772.71 |
| 70 | $1,097.25 |
As you can see, delaying your retirement can make a big difference in your CPP payment amount. However, you should also consider other factors, such as your health, lifestyle, and personal preferences, when deciding when to retire.
Make Voluntary Contributions
Another way to increase your CPP payment is to make voluntary contributions to the CPP. This option is available to you if you are:
- Between the ages of 60 and 70
- Working and receiving the CPP payment
- Not contributing to the CPP through your employer or as a self-employed individual
By making voluntary contributions, you can increase your CPP payment by up to 2.5% per year. This is because the CPP payment is based on your lifetime earnings, and by contributing more, you can increase your average earnings and your CPP payment.
To make voluntary contributions, you need to fill out and submit Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election, to the Canada Revenue Agency (CRA) and your employer (if applicable). You can also revoke your election to stop contributing at any time by filling out and submitting the same form.
Share Your Pension with Your Spouse
If you are married or in a common-law relationship, you can share your CPP payment with your spouse. This can benefit you if:
- You and your spouse have different income levels
- You and your spouse have different tax rates
- You and your spouse have different life expectancies
By sharing your CPP payment, you can reduce your taxable income and lower your tax bill. You can also increase the survivor’s benefit for your spouse if you pass away before them.
To share your CPP payment, you and your spouse need to apply for pension sharing by filling out and submitting Form ISP-1002, Application for CPP Pension Sharing, to Service Canada. You can also cancel pension sharing at any time by filling out and submitting the same form.
Apply for Disability Benefits
If you become disabled and unable to work, you can apply for CPP disability benefits. CPP disability benefits are monthly payments that you can receive if you have a severe and prolonged disability that prevents you from working regularly. The average CPP disability benefit for new beneficiaries in June 2023 was $1,132.71 per month¹. The maximum CPP disability benefit for 2023 is $1,538.67 per month¹.
To qualify for CPP disability benefits, you must:
- Be under the age of 65
- Have contributed to the CPP for at least four of the last six years, or three of the last six years if you have contributed for at least 25 years
- Have a disability that is both severe and prolonged, as defined by the CPP
To apply for CPP disability benefits, you need to fill out and submit Form ISP-1151, Application for Disability Benefits, and Form ISP-2519, Medical Report, to Service Canada. You can also request these forms by calling 1-800-277-9914.
How HustleHub Can Help You
If you want to learn more about how to increase your CPP payment, or how to plan your retirement in general, you can turn to HustleHub for help. HustleHub is a platform that provides you with expert advice and tools to help you achieve your financial goals. Whether you want to save, invest, budget, or retire, HustleHub can help you with:
- Personalized recommendations based on your situation and preferences
- Access to a network of qualified and experienced financial advisors
- Online courses and webinars on various financial topics
- Calculators and simulators to help you estimate your future income and expenses
- Articles and blogs to keep you updated on the latest financial news and trends
HustleHub is your one-stop shop for all your financial needs. Join us today and start your journey to financial freedom.
Source: (1) Benefits payment dates – Canada.ca. https://www.canada.ca/en/services/benefits/calendar.html. (2) Canada Pension Plan – Monthly payment amounts – Canada.ca. https://www.canada.ca/en/services/benefits/publicpensions/cpp/payment-amounts.html. (3) Canada Pension Plan Payment Schedule and Dates. https://canpension.ca/articles/when-does-canada-pension-plan-cpp-get-paid-key-dates-and-schedule-explained.