For decades, age 65 was seen as the traditional finish line for working Canadians. It marked the moment many stopped working and began collecting Old Age Security (OAS) and Canada Pension Plan (CPP) benefits. But as lifespans increase, costs rise, and retirement evolves, that target age is shifting.
If you’re still planning to retire at 65, it may be time to rethink that plan.
Why Retirement at 65 Is Becoming Less Common
1. Canadians Are Living Longer
Today, the average Canadian can expect to live well into their mid-80s. That means your retirement could last 20–30 years or more. Longer retirements put more strain on both personal savings and public pension systems.
2. Cost of Living Is Rising
Inflation and higher living expenses—from housing and groceries to healthcare—are making it harder for retirees to stretch their dollars without additional income.
3. Pension Programs Reward Delay
While you can claim CPP at 60 and OAS at 65, both programs offer increased benefits if you delay. This creates a strong financial incentive to work longer and retire later.
How CPP and OAS Work if You Delay
| Age You Start CPP | Monthly Benefit Impact |
|---|---|
| 60 | ~36% reduction |
| 65 | Standard benefit |
| 70 | ~42% increase over age 65 rate |
| Age You Start OAS | Monthly Benefit Impact |
|---|---|
| 65 | Standard benefit |
| 70 | ~36% increase over age 65 rate |
Both programs reward patience—but you’ll receive payments for fewer years if you wait.
Retirement Is Now a Transition, Not a Date
According to Statistics Canada, about 1 in 5 Canadians over 65 are still working today—double the rate from two decades ago. Reasons include:
- Financial need
- Sense of purpose
- Social connection
- Flexible work options
Many retirees now phase out of work gradually, moving into consulting, volunteering, or part-time roles.
What If Canada Raises the Retirement Age?
In 2016, Canada considered raising the OAS age to 67, but reversed course. However, as the ratio of workers to retirees declines, pressure may mount again to:
- Raise OAS/CPP eligibility ages
- Reduce benefit growth
- Reform how public pensions are funded
Several countries—including the U.S., U.K., and Australia—are already implementing such changes.
How to Plan for a Flexible Retirement
There’s no longer a one-size-fits-all approach. Your ideal retirement age should reflect:
- Your health and life expectancy
- The size of your retirement savings
- Your desired lifestyle and income needs
- Your plans for part-time or post-retirement work
Tip: Use online retirement calculators to test different retirement ages and scenarios before making a decision.
FAQs
Can I still retire at 65 in Canada?
Yes, but the decision depends on your financial readiness and whether OAS and CPP will cover your costs.
Is the OAS age increasing to 67?
Not at the moment—but future changes are possible as Canada’s population continues to age.
Should I delay CPP or OAS?
Delaying boosts your monthly payments, but whether it’s smart depends on your health, income needs, and life expectancy.
Can I work and still receive benefits?
Yes—but your income could affect OAS if it exceeds a certain threshold, triggering a clawback.
