Daryl Diamond, chief retirement income strategist at Dynamic Funds in Winnipeg.Handout
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This is the latest article in our series, Planning for the CPP, in which Globe Advisor explores the decisions behind when to take CPP benefits and reviews different aspects of the beloved and often-debated government-sponsored pension plan.
As part of the series, we invited readers to ask questions about their Canada Pension Plan (CPP) retirement benefits and found experts to answer them. This week, Daryl Diamond, chief retirement income strategist at Dynamic Funds in Winnipeg, answers questions on whether you can reverse your decision to take CPP and Old Age Security (OAS) benefits early, and what happens to those benefits if you retire in another country.
I plan to return to my home country of the Philippines when I turn 65. Can I bring my CPP and OAS benefits with me?
The CPP is a contributory plan comprised of contributions from you and your employer during your working years in Canada between the ages of 18 and 65. The amount of your CPP pension is based on your level of contributions and your age when you commence it. With your first contribution, you’re eligible for CPP benefits no matter where in the world you are living.
However, the OAS is a non-contributory plan. It comes from general tax revenue. You’re eligible for a full pension from OAS if you have lived in Canada for at least 40 years between age 18 and 65.
Partial benefits are available if you lived in Canada for more than 10 years. The partial amount is based on the number of years lived in Canada divided by 40. For example, if you lived in Canada for 20 years, you would be eligible for 50 per cent of the OAS pension at 65.
If you choose to live outside of Canada in retirement, you must have lived in Canada for at least 20 years to receive OAS benefits. If you lived in Canada for less than 20 years, your OAS pension will stop once you’ve lived outside Canada for six months.
Should you choose to move back to Canada, you could restart your OAS pension. You can find more information on out-of-Canada residency and other questions – including direct deposit details – on the Service Canada website.
People who have pensions accrued in Canada and another country may be able to combine these benefits. Canada has international social security agreements with several countries to help citizens coordinate their pensions.
I elected to start getting CPP shortly after I turned 65, in May 2023. Now, I regret that decision and would prefer to wait to receive CPP until I turn 70, given the increased payments you receive by waiting. I understand I can reverse the decision, but I’m not sure how it works. Is it too late? If not, do I return the money or do I keep it and pick it up later?
Once you’ve started taking your CPP retirement benefits, you can still reverse the decision. You will need to contact Service Canada and apply for the cancellation in writing within 12 months of starting the benefit. You can then reapply to restart your CPP benefits at the time of your choosing, keeping in mind that you can’t defer past 70. You must also pay back all of the income received to the date of cancellation.
You can also reverse your decision to receive OAS once you’ve started. The details are similar to those for the CPP. The only difference is you have six months to cancel your OAS benefits compared with 12 months for the CPP.
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