Changes to CPP benefits were introduced in December 2009 and will begin taking effect in 2011. The changes are intended to "offer increased flexibility" and "provide the opportunity to enhance benefits".

Previously, if you started CPP benefits at age 60:

1. You must have stopped working at least 2 months prior to receiving benefits.
2. You received a reduction of 30% in the monthly benefit (0.5% reduction for every month that you start early).
3. You could start working again without resuming contributions to CPP.
4. The crossover age where benefits equalize was 77.6. This means that by age 77.6, you would have received the same total benefit amount whether you had taken the reduced amount at age 60 or the higher amount at age 65.

Under the new rules, greater reductions in taking the benefit earlier are being phased in starting in 2011 and will be fully in place by 2016 (see chart). Additional changes include:

1. The work cessation rule has been eliminated; you can begin drawing your benefit immediately upon leaving your employment.
2. If you begin collecting benefits early but start to work again before age 65 you will be required to resume monthly contributions to CPP.
3. If you elect to start benefits after age 65 the benefit amount will be enhanced to a greater degree than previously.

Please contact your Polson Bourbonniere Certified Financial Planner if you would like to discuss these changes and how they may impact your retirement.