Every Canadian who has worked and contributed to the Canada Pension Plan has been accumulating a retirement asset for their entire working career - one they often undercount, undervalue, and activate too early. The CPP is, structurally, an annuity purchased with decades of mandatory contributions, paying out an inflation-indexed, government-guaranteed monthly income for the rest of your life. The size of that monthly income - and therefore the total value of the asset - depends enormously on a single decision: when you start claiming.
The mathematics of CPP delay are among the clearest in personal finance. Each year you delay past 65 adds 8.4% permanently to your monthly benefit - compounding on the base amount, not on a flat rate. Delaying from 65 to 70 - five years at 8.4% per year - produces a 42% increase in monthly income. On an average CPP of $1,364/month, that's an additional $662/month, every month, forever. At the breakeven point of approximately age 82, you have received the same total dollar amount regardless of which age you started. After 82 assuming Canadian women's average life expectancy of 84.8 years and men's of 81.0 - the delay premium is pure additional income for every month you live.
The one scenario where early CPP makes sense: If you have a serious health condition that materially reduces your life expectancy below the CPP breakeven age of approximately 82, taking CPP early is actuarially rational. Otherwise - for the vast majority of Canadians who will live past 82 - delaying CPP is one of the highest-return financial decisions available to a pre-retiree. It is, as one actuarial researcher described it, "the closest thing to a free lunch in retirement planning."