Here’s the Average CPP Benefit at Age 60 in 2024

The average payment of the Canada Pension Plan for a 60-year-old pensioner is $485, which is not enough to lead a comfortable life in retirement.

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The Canada Pension Plan, or CPP, is a taxable retirement benefit that aims to replace a portion of your pre-retirement income. In 2024, the maximum monthly CPP amount you would receive if you start your pension at age 65 is $1,364.60, while the average monthly amount is much lower at $758.32.

While the average age to start the CPP is 65, you can receive the payout as early as 60. However, Canadians should understand that the CPP amount reduces by 0.6% every month for those receiving the pension before the age of 65. So, the CPP reduces by 36% for someone starting the payment at age 60, suggesting the average payout will be around $485.

It is evident that just banking on the CPP to lead a comfortable life in retirement is not enough, given the average monthly living expenses are well over $1,000 in Canada. It’s essential to have multiple sources of income and supplement the CPP. One way to create an additional income stream at a low cost is by holding blue-chip dividend stocks such as Brookfield Renewable (TSX:BEP.UN).

The bull case for Brookfield Renewable stock

Rising interest rates have driven the share prices of capital-intensive companies lower. While tech stocks have driven the rally in 2023, shares of clean energy companies, including Brookfield Renewable, are down significantly below all-time highs.

Down 48% from all-time highs, BEP stock currently offers you a tasty dividend yield of almost 6%. Despite the pullback in valuation, BEP has returned 250% to shareholders in dividend-adjusted gains in the last decade.

While the macro backdrop remains uncertain, Brookfield Renewable added close to 5,000 megawatts of capacity in 2023. Moreover, it deployed or committed US$9 billion in new projects, which should drive future cash flows higher.

Brookfield’s funds from operations, or FFO, stood at US$1.1 billion or US$1.67 per unit in 2023, an increase of 7% year over year. It advanced commercial priorities, which include securing contracts for new developments for 50 terawatt-hours of generation.

BEP also accelerated development activities and commissioning capacities across wind, solar, and battery storage. It expects commissioned capacity to contribute US$60 million of incremental FFO annually on a run-rate basis.

Brookfield Renewable strengthened its balance sheet and executed US$15 billion of financings, finishing 2023 with available liquidity of US$4 billion, providing it with the flexibility to deploy capital at strong risk-adjusted returns.

What is the target price for Brookfield Renewable stock?

Over the years, Brookfield Renewable has established itself as a clean energy giant and is among the largest companies in this sector. Currently, it has 22 terawatt-hours per year of generation contracted to corporate customers, accounting for 30% of total contract volumes. Based on its existing development pipeline, BEP expects contract generation to corporate customers to double again by 2028 to 44 terawatt-hours per year.

Brookfield Renewable Partners continues to focus on its capital-recycling program and continues to scale with development growth, generating US$800 million of proceeds in 2023, representing three times the invested capital.

Analysts remain bullish and expect Brookfield Renewable to surge by 30% in the next 12 months.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

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