CPP ‘money-back guarantee’ for early death could eliminate breakeven bias
The biggest obstacle to delaying CPP payments, among those who can afford it, is loss aversion. This psychological phenomenon occurs when retirees feel it’s unfair to miss out on CPP income they could have claimed if they died earlier than their breakeven point.
Implementing a CPP “money-back guarantee” as a death benefit could improve decision making, the National Institute of Aging proposed in a report last month.
In retirement, people are most scared of running out of money and inflation eroding the value of what they do have, said Dr. Bonnie-Jeanne MacDonald, co-author of the report and director of financial security research with the National Institute on Ageing at Toronto Metropolitan University’s Ted Rogers School of Management.
