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Working While Receiving CPP: What You Need to Know About Earnings and Contributions

Learn how continuing to work affects your CPP benefits and how you can keep building your pension after starting payments

Many Canadians choose to continue working after they begin receiving their Canada Pension Plan (CPP) retirement pension. Whether for financial security, personal fulfillment, or lifestyle choice, it’s important to understand how working affects your CPP payments and ongoing contributions.

Knowing the rules helps you make informed decisions about employment income, taxation, and how your continued work can actually enhance your CPP benefits.

Can You Work While Receiving CPP?

Yes. You are allowed to continue working while receiving CPP retirement benefits. Your employment income has no impact on your eligibility to receive CPP payments. Unlike some benefits, CPP is not clawed back based on your earnings from work.

However, there are important considerations regarding:

  • Mandatory CPP contributions after age 60.

  • The Post-Retirement Benefit (PRB), which allows you to keep building your CPP even after starting payments.

Optimize helps you plan how continued work fits into your broader retirement income strategy.

CPP Contributions After Starting Your Pension

If you continue working while receiving CPP and are under age 65:

Age Range Contribution Requirement
Under 65 - Mandatory contributions continue through payroll deductions.
- Employer continues matching contributions.
65 to 70 - You may choose to stop contributing by formally opting out through your employer.
- If you don’t opt out, contributions continue automatically.
70 and older - CPP contributions stop automatically, regardless of work status.

The CPP Post-Retirement Benefit (PRB): Extra Pension for Continued Work

CPP contributions made after you start receiving your retirement pension aren’t wasted. They go towards the Post-Retirement Benefit (PRB), which provides an additional lifetime pension amount:

  • Every year you contribute, you become entitled to a new, small, monthly PRB added to your existing CPP payment.

  • This benefit is payable for life and increases with each additional year of contributions.

  • PRBs are adjusted for inflation, just like the main CPP pension.

At Optimize, we model how continued contributions through the PRB can enhance your long-term income.

Working and Taxes on CPP Income

While working does not reduce your CPP benefits, your total income—including CPP payments and employment earnings—is subject to taxation. This can:

  • Push you into a higher marginal tax bracket.

  • Impact other income-tested benefits, such as Old Age Security (OAS), due to the OAS clawback.

Optimize helps you balance CPP income with employment earnings to manage tax implications effectively.

Why Continuing to Work Can Still Be Beneficial

Continuing to work after starting CPP offers several advantages:

  • Maintains or boosts your cash flow.

  • Keeps you socially and professionally engaged.

  • Builds additional CPP income through the PRB.

  • Allows strategic deferral of withdrawals from RRSPs or TFSAs.

The key is ensuring your work income and CPP benefits are coordinated within a tax-efficient retirement plan.

How Optimize Helps You Plan for Working While Receiving CPP

At Optimize, we ensure that working during retirement is integrated thoughtfully into your financial plan. We help you:

  • Understand ongoing CPP contribution obligations and PRB opportunities.

  • Model the impact of employment income on your overall tax situation.

  • Decide whether to opt out of CPP contributions after age 65, when appropriate.

  • Coordinate work income with CPP, OAS, and other retirement sources.

  • Adjust your withdrawal strategies to maintain tax efficiency and income stability.

With Optimize’s guidance, working while receiving CPP becomes a strategic advantage, not a tax or benefit management headache.