13 Considerations for taking Social Security or CPP benefits early

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By Connectively and Findependence Hub

Claiming Social Security early can provide immediate income, but it may reduce future benefits and limit financial flexibility. This article examines key factors such as debt, longevity, cash reserves, survivor protection, and income planning.

Insights from financial experts help readers compare options and make more informed timing decisions.

 

 

Preserve Flexibility amid Program Uncertainty

It depends on life stage. Younger clients may want to plan for 75% of benefits on the dollar. While scenarios for pre-retirees can range from reduced benefits to a flat non-inflation-adjusted benefit.

The decision making math remains the same. It’s still too early to tell exactly what will happen with Social Security. Pre-retirees should still consider income needs and longevity over how benefits might change.

To hedge this risk pre-retirees should build flexibility within their retirement plan. Locking income into guaranteed lifetime payments makes it harder to pivot if benefits change. — Samuel Resultan, Financial Consultant, Voyage Wealth Management

Postpone CPP and OAS for Raises

For Canadians who can keep working — or who have other income to bridge the gap — delaying CPP and OAS is one of the few guaranteed raises in retirement. According to Service Canada, CPP grows 0.7% for every month you delay after 65, up to 42% more at 70, and OAS grows 0.6% a month, up to 36% more at 70. Those larger payments are permanent and indexed to inflation, so delaying is really buying longevity insurance: the longer you live, the more it pays. It is not right for everyone. If you need the income now, have health concerns, or qualify for the Guaranteed Income Supplement, starting earlier can make sense. But if you are healthy, still working, and can cover expenses in your late 60s from savings or part-time income, run the numbers on waiting before you default to 65:  65 is just the standard age, not a deadline. — Rohit Dahiya, Founder, LearnLoonie.ca

Keep Cash Reserves for Deferral

The national debt and the Social Security trust fund get lumped together, and they’re separate problems. The trust fund is what matters here. The trustees project it runs short in the early 2030s, and after that incoming payroll taxes still cover roughly 80 per  cent of scheduled benefits. That’s a cut. It isn’t zero.

So run the numbers with the cut baked in. If waiting to 70 still wins at 80 cents on the dollar, and for a healthy married person it usually does, the headline doesn’t change the answer. If a cut comes it would most likely be across the board, which means the person who claimed at 62 takes it on a check that was already about 43% smaller than the age-70 amount.

Claiming early does make sense with poor health, or for the lower earner in a couple whose check won’t become the survivor benefit. Taking it early to invest only works if it actually gets invested. In my experience it usually gets spent.

The better hedge is a cash reserve, so you’re never forced to claim early in a bad year. — Hans Goldstein, Founder, Structured Installment Sales & Exit Tax Planning, Hans Goldstein: Tax & Exit Planning

Stress-Test Income and Build Reserves

  1. My numbers don’t change much. The US$40 trillion national debt is a separate problem from the Social Security trust fund shortfall. The biggest risk to me is that the retirement fund will be exhausted by 2033, at which time about 77% to 80% of scheduled benefits will continue to be paid from current payroll taxes. Any cut to benefits will be proportional, so that a reduced cheque at age 70 is still larger than a reduced cheque at age 62. For Canadians, the biggest risk to the plan is zero. But the CPP is a separately funded plan, and the chief actuary reports that it will be “sustainable” for 75 years.
  1. There is some justification to taking your retirement benefits early, but the reward for waiting past full retirement age to take benefits is significant. Generally, one can earn 8% per year more in guaranteed, inflation-adjusted income by delaying retirement benefits past full retirement age. Waiting to take retirement benefits early is therefore justified by poor health, short family longevity, or no spouse to receive survivor benefits.
  1. Calculate how much you need to have to run the plan at 75% of your projected benefit. If the number is still sustainable, then the rest of the news is irrelevant. Use your 401(k) or RRSP to “bridge” to 70. The effect of lowering your required withdrawals and taxes in retirement will be dramatic. Keep 2-3 years of required retirement spending in cash or very short-term bonds. The worst crash ever will not force you into early retirement. Pay off your mortgage before retirement. The worst fixed cost in retirement is yourself. — Ace Zhuo, CEO | Sales and Marketing, Tech & Finance Expert, TradingFXVPS

Let Longevity guide your Timing

Myth: Since the trust fund is running short anyway, I should “take it early and grow it.”

Social Security claiming age has little to do with markets or investment-return guesses, and a lot to do with longevity and breakeven. Will you, or a spouse who may rely on survivor benefits, live long enough for the delayed retirement credits (the increase you earn by waiting past full retirement age, up to 70) to outweigh the permanent reduction for claiming between 62 and full retirement age? That math does not need an investment-return assumption.

Trust fund shortfall talk changes the risk story, not the formula. According to the SSA trustees, if Congress takes no action, scheduled benefits can be paid until the OASI reserve is used up. After that, ongoing payroll tax revenue covers only a portion of scheduled benefits, and that cut applies to everyone, not just those who delay. So claiming earlier does not create a protected pocket outside the same rules.

Instead of “take it early and grow it,” model these:

  1. Your primary insurance amount at full retirement age, then the reduction or delayed-credit bump at your claim age.
  2. Spousal and survivor benefit interactions.
  3. Taxes and Medicare: other income can make benefits taxable and affect IRMAA, and working before full retirement age can trigger the earnings test.
  4. A cash-flow bridge if you delay, with a tax dry-run on withdrawals from other accounts.

Check your Social Security account often to keep your earnings record clean, and revisit your claiming age when health, work plans, or a spouse’s age changes. — Mehdi Zare CFA, Founder, Bina Capital

Clear Debt before you File

I’m Nick Avila, founder of United Debt Relief. I’ll leave the investment math to planners and add the part most claiming advice skips: your own debt.

First, the cut. The 2026 Social Security Trustees Report projects the combined trust funds will be depleted in 2034, with enough income at that point to pay 83% of scheduled benefits if Congress doesn’t act. That’s a real risk. It’s also a partial cut, not zero, and under current law it would apply to early and late claimers alike. So on its own, I think it’s a weak reason to lock in a permanently smaller check.

And the early-claiming penalty is permanent. For anyone born in 1960 or later, SSA says claiming at 62 pays 70% of your full benefit, and each year you wait past 67 adds 8% until 70.

Where I do see early claiming make sense is Debt. If someone reaches 62 carrying credit card balances, at the 22.15% average rate the Federal Reserve reports for accounts charged interest, and has no other way to pay them down, using early benefits to clear that debt can beat letting it compound for years while they wait. It’s an expensive fix, though. I’d much rather see people clear the cards from earned income in their late 50s and keep the option to delay.

The hedge I wish more people knew about is legal, not financial. The CFPB notes that when benefits arrive by direct deposit and a bank gets a garnishment order, two months of benefits are protected in the account, and Social Security is shielded from most private debt collectors. Government debts are different. Back taxes and defaulted federal student loans can be collected from benefits, and SSA says the IRS can levy up to 15% of payments for overdue federal taxes.

So the best hedge against a smaller cheque is entering retirement without federal tax debt or a defaulted federal student loan, because those can follow you straight into your Social Security payment. Everyone’s situation is different, so run your own numbers with a fee-only planner before you decide when to claim. — Nick Avila, Founder, United Debt Relief

Protect Survivors with Layered Coverage

We need to keep in mind that current warnings refer to reducing the benefits, not their elimination, and waiting to claim typically results in higher payments. Claiming early translates into a permanently lower benefit and introduces market risk, which may not outweigh the guaranteed increase from delaying.

While indeed this approach will work for some individuals, it should be reviewed with a licensed financial advisor case by case rather than applied broadly.

One critical factor families often overlook is the impact on the surviving spouse. After the higher-earning partner passes away, the survivor generally receives the larger Social Security payment. If the higher earner claims early, the surviving spouse may have to rely on a smaller benefit for many years.

Relying on a single income source is not advisable. In my 18 years in the insurance career, I have observed that retirees who feel most secure use multiple layers of protection, such as combining Social Security, savings, and life insurance designed to replace lost spousal income. When one income stream ends due to a spouse’s death, life insurance can help fill that gap, allowing the surviving spouse to remain in the home.

This is not an investment strategy per se, but a way to ensure that benefit reductions, market downturns, or loss of a spouse do not impact the same person all at once. — Jeremy Hewett, President and Chief Executive Officer, AccuQuote

Diversify Globally against Sovereign Risk

With over 20 years advising private equity and multinationals on capital advisory, I evaluate statutory retirement benefits through the lens of sovereign counterparty risk. When a public balance sheet faces severe long-term debt, relying entirely on static future payout models introduces regulatory uncertainty that you cannot control.

There is a sound strategic argument for claiming early if you systematically redirect that cash flow into liquid global equities and high-yield operational investments. Taking the liquidity immediately places capital allocation back under your direct governance rather than leaving it exposed to future legislative restructuring.

A strong hedge against single-country entitlement reform is geographic and jurisdictional diversification. By structuring assets across multiple international corporate entities and foreign-denominated holdings, you insulate your broader wealth plan from the fiscal pressures of any single government. –– Sebastien Gaddini, Principal, Corpiya

Delay Social Security despite Potential Haircuts

The $40 trillion debt headline is genuinely alarming, but let’s separate two distinct issues that often get conflated: the national debt is a real long-term fiscal challenge, while Social Security’s funding shortfall is a separate, more immediate, and more precisely quantifiable problem tied to payroll tax revenue versus benefit obligations, not general federal debt. The Trustees project trust fund depletion around 2033-2034, potentially triggering an automatic 20-25% benefit reduction if Congress takes zero action, which I consider unlikely but not impossible.

Does this change my calculation on delaying to 70? Not dramatically, and here’s the math explaining why. Delaying benefits still guarantees roughly 8% annual increases between full retirement age and 70. Even if benefits get reduced by 20-25% starting in 2034, that reduction would apply proportionally whether you claimed at 62, 67, or 70, since cuts would adjust the overall benefit formula, not penalize delayed claiming specifically. So delaying still produces a larger base benefit before any potential haircut, meaning you’d still come out ahead with delayed claiming even under reduction scenarios, just with a smaller total than originally projected.

The “take it early and invest for growth” argument does have some legitimate mathematical appeal, particularly if you’re disciplined enough to actually invest rather than spend the money, and if market returns cooperate. Historically, an 8-10% average stock market return could theoretically outpace the guaranteed 8% delayed retirement credit.

I recommend three approaches: first, build retirement income diversification beyond Social Security through IRAs, 401(k)s, and if available, guaranteed income products like annuities, reducing total dependence on any single income source. Second, maintain flexibility in your claiming strategy, some financial planners now recommend claiming slightly earlier than 70, perhaps at 67-68, splitting the difference between maximizing benefits and hedging against uncertainty. Third, stay politically engaged and informed, since historically Congress has always intervened before depletion deadlines through payroll tax adjustments or formula changes, meaning the doomsday scenario, while theoretically possible, remains historically improbable given the political consequences of inaction. — Loretta Kilday, DebtCC Spokesperson, Debt Consolidation Care

Model a Reduced Future before Claims

I would not treat the Social Security funding warning as an automatic reason to claim early. I would instead stress-test the retirement plan as though future benefits will be lower, then make the claiming decision based on longevity, cash needs, and risk tolerance. Continue Reading…

Franklin Templeton’s Bi-annual Global Investment Management Survey

By Stephen Dover, CFA, Franklin Templeton Institute et al

(Sponsor Blog)

This bi-annual outlook survey is designed to give a view across our investment teams. The expectations for 2026 are based on survey results from investment professionals across all asset classes. We also provide our predictions on inflation, recession, asset class performance and more.

Summary

This bi-annual outlook survey is designed to give a view across our investment teams. The Franklin Templeton Institute identifies the median across answers and develops commentary on the year ahead. We surveyed our investment teams across all our asset classes: equity, private equity, fixed income, private debt, real estate, digital assets, hedge funds and secondary private markets.

The goal of the Global Investment Management Survey is to provide the most comprehensive global view on the dimensions that matter most to our clients.

The findings reflect the average of the group. While each of our investment teams are independent and have different outlooks, the survey serves as a starting point in understanding Franklin Templeton’s aggregate views on the economy, equities, fixed income and alternatives.

The survey results outlined in this paper are as of May 2026, and market data as of August 31, 2026.

Exhibit 1: Expectations for 2026 Based on the Franklin Templeton Global Investment Management Survey

Focus on Quality Across All Asset Classes

Source: Franklin Templeton Institute Global Investment Management Survey expectations are for the year 2026 and are as of May 2026. Survey methodology included at the end of the paper. There is no assurance any forecast, projection or estimate will be realized.

Key takeaways

Economic growth accelerating

  • Global growth will be slightly better than consensus forecasts.
  • We expect core Personal Consumption Expenditure (PCE) to approximate 3.0%–3.5% and will likely remain above central-bank targets.
  • Unemployment will rise but remain relatively low in the United States and will end the year around 4.5%.
  • The US dollar will remain rangebound and essentially unchanged by the end of 2026.
  • We do not expect a recession in 2026.

Equities likely to end 2026 at 7400–7800 (S&P 500 Index target)

  • Earnings will grow 15%+ versus market consensus of 31.5%.

FAVOR

  • Broad US stock exposure: we favor large-, mid- and small-cap and a balanced mix of growth and value. We are bullish on emerging markets and Japan.
  • Sector focus on technology, industrials and energy.
  • Factors to focus on include free-cash-flow yield, return on invested capital and return on equity.

RISKS

  • Geopolitics, Federal Reserve (Fed) misstep and earnings below expectations.

Municipal bonds, short duration and corporate credit will benefit from solid fundamentals and elevated yield levels in 2026

FAVOR

  • Municipal bonds will continue to be a high-quality, diversifying investment with attractive tax-free yields, as fundamentals remain solid and elevated supply levels continue to be met with strong demand to support valuations.
  • Shorter duration fixed income will be in favor during most of 2026 as yields remain elevated and the Fed could be on hold.
  • High-yield bonds are attractive. Default rates for high-yield debt could tick slightly higher during the second half of 2026; however, spreads should remain relatively tight in a sector with low interest rate risk and high all-in yields.

RISKS

  • Geopolitics and potential missteps by the Fed or other major central banks.

 

Your business is your retirement plan. Here’s how to make it worth what you need

Image by Pexels/Zeynep Sude Emek

By Arvin Mondano

Special to Financial Independence Hub

In a recent Findependence Hub roundup on FIRE, Loretta Kilday of DebtCC said most FIRE folks she’s encountered “don’t actually stop working; they stop working for someone else.” Business owners made that move years ago, which leaves them with a different retirement problem: for many of them, the company is the nest egg. The RRSP got whatever was left after payroll, and the plan has always been to sell.

That plan works when the sale price covers the retirement. It fails quietly when the owner learns what a buyer will pay only after deciding to retire. The fix is to run the numbers the other way around, years before you list.

Start with the number your retirement needs

Begin with the income you want, not the price you hope for. Say you need $60,000 a year on top of CPP and OAS. Using the 4% rule as a rough guide, that takes a portfolio of about $1.5 million. If your RRSP, TFSA and other savings already hold $400,000, the sale has to deliver roughly $1.1 million after tax, legal costs and any broker’s commission.

Your accountant can turn that into a pre-tax sale price. For this example, call it $1.3 million. What matters is having a target before you ever have an asking price. Owners who skip this step tend to price on what the business means to them. Buyers price on what it earns.

What buyers actually pay for

Buyers of owner-run businesses price them on the seller’s discretionary earnings, or SDE: pre-tax profit plus the owner’s salary and perks, plus one-time and non-cash expenses. It’s the cash flow a single owner-operator could take out of the business in a year.

The price is a multiple of that figure. Most small, owner-operated businesses in Canada sell for somewhere between two and three and a half times SDE. Where yours lands depends on how clean the records are, whether earnings are rising or falling, whether a few big customers make up most of your sales, and how much the business depends on you.

Now run your retirement math against it. Divide the price you need by a realistic multiple and you get the SDE the business has to show. At a multiple of 2.5, a $1.3 million sale needs about $520,000. If the business shows $350,000, it’s worth closer to $875,000, which leaves a $425,000 hole in the plan. Far better to find that out now than in the first offer.

The add-backs buyers accept, and the ones they don’t

Add-backs are where most price arguments start, because every dollar of SDE is worth two dollars or more of price. Buyers generally accept the ones they can verify: your own salary and benefits, personal costs run through the business such as a vehicle or phone, true one-time expenses like a legal settlement or a move, and depreciation and interest. Continue Reading…

Check your family’s Aeroplan points before November 30

Image by Pexels: Francesco Ungaro

By The Points Standard

Special to Financial Independence Hub

If you have an Aeroplan account you haven’t touched in a while, mark November 30, 2026 on the calendar. Under Air Canada’s current notice, that’s when its normal points expiry policy resumes after a long pause. Points are protected through November 29.

Under the normal rule, an account with no qualifying activity for 18 consecutive months loses its entire balance, unless an exemption applies. November 30 is the date to watch for accounts already past that limit; it isn’t everyone’s expiry date.

For people who collect points actively, this won’t matter. It matters for the balances nobody is watching: the account built up over a working life of business trips, the one a spouse opened for a single vacation, and the one belonging to an elderly parent who hasn’t flown in years. Those accounts can hold points worth keeping, even if nobody is planning a trip.

What a dormant balance is worth

Points feel like play money until you put a price on them. At The Points Standard we publish a monthly dollar valuation of Canadian points programs. Our current Aeroplan estimate is 1.9 Canadian cents a point for an informed flight redemption, with a baseline estimate of 1 cent. These are estimates of travel value, not cash balances or guaranteed redemption rates.

At those estimates, 50,000 points represents about $500 to $950 in travel value, and 150,000 points about $1,500 to $2,850. Actual value depends on the booking. Few of us would want to lose that much simply because an account was inactive.

Who is safe

Two groups don’t have to worry while their standing lasts:

  • Primary cardholders of an Aeroplan credit card. If you hold a TD, CIBC or American Express Aeroplan card as the primary cardholder, with the applicable accounts in good standing, your points don’t expire. That includes the no-fee CIBC Aeroplan Visa. Being an additional cardholder doesn’t protect your own Aeroplan balance.
  • Aeroplan Elite status members (25K and up), for as long as the status lasts.

Everyone else is on the 18-month clock.

How to find your own date

Use the website for this check. Air Canada’s published instructions say to sign in to your Aeroplan dashboard, select Activity, and scroll down to the points inactivity date. If you can’t find a date, contact Aeroplan to confirm your account’s status and deadline. Don’t assume the app uses the same path, or that a missing date means your points are protected. Continue Reading…

Retired Money: Book Review of David Booth’s Stay Calm

As we telegraphed in the September installment of my MoneySense Retired Money column, this month’s column is a book review of David Booth’s Stay Calm, published early in September. For the full review in the October column, click on the highlighted headline: The calming genius of passive investing.

David Booth is founder of Dimensional Fund Advisors (DFA), maker of DFA Index Funds and DFA ETFs. I have long invested some of our family’s money in DFA funds, along with many of the other usual indexing suspects.

They are famously champions of taking a passive set-it-and-forget it approach to investing while minimizing the noise of what they have dubbed “financial pornography” propagated by traditional and social media, and the self-appointed experts who claim they can pick individual stocks or consistently time the markets.

As someone who takes a decidedly hybrid approach to investing in ETFs in various asset classes, — and occasionally indulging in a bit of high-conviction “index skimming” — I found Booth’s Stay Calm to be a refreshing reminder of the sound principles that underlie DFA.

Those who need a refresher on the virtues of passive investing will not be disappointed but as the book’s subhead implies, there are also quite a few lessons about embracing uncertainties in life in general, as well as investing in particular.

Stay Calm was published early in September by Authors Equity and is aptly subtitled “Learn to Embrace Uncertainty in Investing and Life.”  The book is divided into three main parts. Part 1 is on the science of investing and covers the Gift of being an Outsider, how Markets work and how to harness public markets. Part 2 is titled “The Mindset to Stay Calm” and the four chapter titles all make for excellent bullet points; Flexibility is the key to navigating Life’s Uncertainties; Don’t Predict, Plan; Control what you can control and manage what you can’t; and Tune out the Noise.

Continue Reading…