LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
Taking CPP at 60 rather than 65 results in:
- AA larger monthly pension, since starting early means more years of payments to reward the contributor
- BNo pension until 65, since 60 is only the age at which the application may be filed
- CThe same monthly pension, since the reduction applies only to the retroactive payments
- A permanently reduced monthly pension, while deferral past 65 increases it
Correct answer: D) A permanently reduced monthly pension, while deferral past 65 increases it
The early reduction and late enhancement are actuarial adjustments. The decision depends on health, need for income, other resources and longevity expectations.
Why the other options are wrong
- AAn early start reduces the monthly amount; it does not increase it.
- BPayments begin at the chosen start date from age 60.
- CThe reduction is permanent and applies to every payment.
Exam tip
CPP: reduced before 65, enhanced after, to age 70. Break-even analysis informs the choice.
Common mistake
Advising early CPP without discussing the permanent reduction.
What this tests
CISRO competency component 1.2 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.