CPP early payments are reduced by what percentage per year before 65?

CPP early payments are reduced by what percentage per year before 65?

• A. 7.2% per year before 65
• B. 6% per year before 65
• C. 8% per year before 65
• D. 10% per year before 65

Answer: (A)

CPP is reduced for each month you take it before age 65. That reduction is 0.6% per month, which adds up to 7.2% per year before 65. So starting CPP earlier trims the eventual pension by 7.2% for each year you retire early. For example, beginning at 60 would cut the pension by 36% (5 years × 7.2%), leaving 64% of the amount you'd get starting at 65. The other percentages don’t match the official monthly reduction rate, so 7.2% per year is the correct figure.

CPP is reduced for each month you take it before age 65. That reduction is 0.6% per month, which adds up to 7.2% per year before 65. So starting CPP earlier trims the eventual pension by 7.2% for each year you retire early. For example, beginning at 60 would cut the pension by 36% (5 years × 7.2%), leaving 64% of the amount you'd get starting at 65. The other percentages don’t match the official monthly reduction rate, so 7.2% per year is the correct figure.