Gone are the days of relying on a single source of income. Inflation has increased the cost of living to such an extent that nothing short of the maximum Canadian Pension Plan (CPP) payout seems feasible. The maximum CPP payout for 2025 is $1,433 per month, but you can increase it by 42% to $2,035 by deferring the payout till age 70.
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Should you wait till age 70 for the maximum CPP payout?
Let’s say you wait till age 70 to get a higher payout, you will lose five years of enjoying the CPP payout, which grows every year to adjust for inflation. At this stage, time is more than money.
You have to decide if you have the luxury of time to enjoy 10 to 15 years of your CPP money. The cumulative CPP payout is higher for those who start taking CPP payouts from age 65 and live till age 80.
The Canada Revenue Agency (CRA) increases CPP payouts to adjust for inflation. I took the maximum CPP payout of $17,196 ($1,433 x 12 months) and increased it by 2% annually to adjust for inflation.
| Age | Maximum CPP payout starting at age 65 | Maximum CPP payout starting at age 70 |
| 66 | $17,196.00 | |
| 67 | $17,539.92 | |
| 68 | $17,890.72 | |
| 69 | $18,248.53 | |
| 70 | $18,613.50 | $24,420.00 |
| Cumulative payout | $89,488.67 | $24,420.00 |
| 71 | $18,985.77 | $24,908.40 |
| 72 | $19,365.49 | $25,406.57 |
| 73 | $19,752.80 | $25,914.70 |
| 74 | $20,147.85 | $26,432.99 |
| 75 | $20,550.81 | $26,961.65 |
| Cumulative payout | $167,740.59 | $127,082.66 |
| 76 | $20,961.83 | $27,500.89 |
| 77 | $21,381.06 | $28,050.90 |
| 78 | $21,808.69 | $28,611.92 |
| 79 | $22,244.86 | $29,184.16 |
| 80 | $22,689.76 | $29,767.84 |
| Cumulative payout | $297,377.60 | $297,160.03 |
While you are getting a higher annual payout at age 70, the cumulative CPP payout is higher at age 65, as you have been receiving the payout for a longer time. At age 80, the cumulative CPP payout is almost the same for those who started it at age 65 and age 70. Unless you expect to live past 80 years of age, delaying CPP payout till age 70 doesn’t make financial sense.
How to earn age 70 maximum CPP payout at age 65?
The difference between the maximum CPP payout for ages 65 and 70 is above $7,000. However, you can build a passive-income portfolio that can earn you $7,000 annual income and even grow it by 3-5%. The best part is that this income can be tax-free, unlike the CPP payout, which is taxable.
Most Canadian dividend stocks give a 6% dividend yield. You will need a Tax-Free Savings Account (TFSA) portfolio of $116,667, which earns a 6% yield to secure $7,000 annually.
However, if you have five to 10 years to retire, you can earn your age 70 CPP payout at age 65 by investing in stocks that grow dividends and offer a dividend-reinvestment plan (DRIP).
Harnessing the power of compounding
Telus (TSX:T) has a 21-year history of growing dividends at an average annual rate of 12.5%. However, telco has slowed its dividend growth rate to 3-8% for the 2026-2028 period as price competition stresses cash flow. The company offers DRIP. Its stock has been trading near its 10-year low for the past three years due to industry headwinds, creating an opportunity to lock in a 7.5% yield. You can invest a lump sum of $12,000 to $20,000 and let the DRIP compound the dividend income.
| Telus Stock Price | Year | Telus DRIP Shares | Telus Share count | Telus Dividend per share (4% CAGR) | Total Dividend Amount |
| $22.24 | 2025 | 540.0 | $1.6372 | $187.34 | |
| $25.00 | 2026 | 7.49 | 547.5 | $1.7027 | $932.21 |
| $28.00 | 2027 | 33.29 | 580.8 | $1.7708 | $1,028.45 |
| $30.00 | 2028 | 34.28 | 615.1 | $1.8416 | $1,132.73 |
| $30.00 | 2029 | 37.76 | 652.8 | $1.9153 | $1,250.35 |
| $30.00 | 2030 | 41.68 | 694.5 | $1.9919 | $1,383.39 |
| $35.00 | 2031 | 39.53 | 734.0 | $2.0716 | $1,520.60 |
| $35.00 | 2032 | 43.45 | 777.5 | $2.1544 | $1,675.03 |
| $35.00 | 2033 | 47.86 | 825.3 | $2.2406 | $1,849.26 |
| $35.00 | 2034 | 52.84 | 878.2 | $2.3302 | $2,046.35 |
| $35.00 | 2035 | 58.47 | 936.6 | $2.4235 | $2,269.90 |
Telus’s DRIP could pay $2,270 in annual dividends after 12 years, assuming the dividend grows at a compounded annual growth rate of 4% and the stock price reaches a high of $30 in the medium term and $35 in the long term.
Based on the above assumptions, Telus could grow its annual dividend to $2,270 by age 65.
