# The Canada Pension Plan Mystery

Posted by Tim Stobbs on May 7, 2009

Let’s face the facts estimating your CPP pension when you retire early is very hard to do. For a lot of people doing it yourself is a bit of mystery. So today is the step by step guide to doing your own estimate. Actually in all my calculations or looking for it I’ve only found one site that works: from the government of Canada.

The calculator lets you do a few interesting things. First it let’s you see what you get if you start collecting the money between 60 and 70. Also it allows you to change your average earnings at some point during your life which you can use to simulate an early retirement.

So here is the procedure to get your estimate:

- Get a statement of contributions with a current estimate of your CPP benefits. You can either get a copy from online or request a paper copy to be mailed to you. Or if you have the paperwork average your income from the year you turned 18 to now. If you don’t have it you can still use the calculator, but the estimate is rough.
- Got to this calculator at first you will deal with entering your date and month of birth and then do your OAS estimate. We you get to the section about your CPP benefits do the following.
- It will ask you if you have an estimate. If so, select
**Yes**. Then enter in your estimate of your pension and the month and date of the estimate. - If you don’t have an estimate do the following. Select
**No**. Then it will let you select your average earnings from when you turned 18 till now in $5000 intervals up to $46,300 (the max). I highly caution you to choose a lower number. Most people forget how little they earned back between 18 and 25 and it will really drag down your average. For example in my case if I didn’t have an estimate I would likely guess my current average is**$35,000**. - Then at the bottom of either page it will ask if you want to see what happens if you take your CPP between 60 and 64. I selected
**Yes**. - Then pick your start age. I took
**60**. - Then it will give you an estimate of your pension at 60. Hit
**Next**. - Then it will ask do you want to estimate what happens if your future earnings change. Here is where you can simulate an early retirement. Select
**Yes**. - Now you can pick two income estimates and an age when the first will stop and the second will start. So if you expect to fully retire early choose the second estimate at zero. If you plan to do some work till your 65 enter a very low number. In my case I choose
**$35,000**till age**45**and**$5000**from that point onwards. - Then it will provide a modified pension amount. Again you can choose to take it early. I selected
**Yes**. - I picked
**60**. Then I got my pension estimate of $338 per month starting at age 60.

So there is your step by step guide the the wonder world of CPP estimates. Oh, a point of caution. The calculator may get buggy if you keep shifting back and fowards changing numbers. So do one estimate stop and then restart the calculator if you want to try something else. Enjoy.