Retirement in Canada Is Changing—Here’s What You Need to Know
For decades, turning 65 was seen as the finish line for working Canadians. It was the age to stop working and start collecting government benefits like the Canada Pension Plan (CPP) and Old Age Security (OAS). But in 2025, that once-clear milestone is no longer so fixed. With life expectancy rising, the cost of living increasing, and pension structures evolving, many Canadians are rethinking when—and how—they retire.
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Why Fewer Canadians Are Retiring at 65
Living Longer Means Stretching Your Savings Further
Canadians are living well into their 80s and beyond, which means retirement could last 25 to 30 years. This extended lifespan brings a greater need for long-term financial planning. Retiring too early can leave some without enough savings or income to maintain their lifestyle throughout their senior years.
The Cost of Living Is Putting Pressure on Retirees
From groceries to housing and healthcare, everyday expenses have surged. Many seniors are finding it harder to make ends meet, especially as inflation eats into fixed incomes. Relying solely on OAS and CPP is often not enough to cover today’s rising costs.
Incentives to Delay CPP and OAS Are Growing
While CPP and OAS are still available at 65, the federal government now offers substantial increases in benefits if you delay claiming them. Many financial experts recommend waiting until age 70 if possible, especially if you’re still working or in good health.
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Claiming CPP and OAS: The Pros and Cons of Delaying Benefits
Canada Pension Plan (CPP)
You can start receiving CPP as early as age 60, but doing so comes with a cost. Your benefit is reduced by 0.6% for every month you take it before 65. That’s a 36% cut if you claim at 60. However, if you delay until 70, your benefit increases by 0.7% per month—equal to a 42% boost.
Old Age Security (OAS)
OAS payments begin at 65, but delaying until age 70 results in a 36% increase in monthly benefits. For many seniors, waiting makes sense if they can rely on other income sources in the meantime.
| Benefit Type | Earliest Start Age | Standard Age | Latest Start Age | Max Increase (If Claimed at 70) |
|---|---|---|---|---|
| CPP | 60 | 65 | 70 | +42% |
| OAS | 65 | 65 | 70 | +36% |
Is Canada Planning to Raise the Retirement Age?
Canada previously proposed raising the OAS eligibility age to 67, but that plan was canceled in 2016. However, as the population continues to age and the worker-to-retiree ratio shrinks, pressure is mounting to revisit the idea.
Other countries like the United States, United Kingdom, and Australia have already increased their official retirement ages. While no new policy changes have been confirmed, many experts believe Canada could follow suit in the coming years.
More Canadians Over 65 Are Staying in the Workforce
Retirement Is Becoming a Gradual Transition
According to Statistics Canada, about 1 in 5 Canadians aged 65 and older are still working—double the rate from two decades ago. Some do so out of necessity, while others work to stay active, maintain a sense of purpose, or keep social connections.
Seniors today are more likely to phase into retirement slowly. Many are choosing part-time jobs, freelance roles, or seasonal work to stay engaged without the pressure of full-time employment.
Planning for a Flexible, Personalized Retirement
The idea of a one-size-fits-all retirement age is outdated. Today’s retirement plans must be customized to fit each individual’s health, career, and financial goals. Whether you plan to retire at 60, 65, or beyond 70, here’s how to prepare:
Know What You’ll Receive
Estimate your future CPP and OAS benefits using tools available on the Government of Canada website or through your My Service Canada Account. Add in any private savings, investments, or workplace pensions.
Understand Your Costs
Create a detailed budget for life after work, including healthcare, housing, travel, and inflation over the next two to three decades.
Prepare to Be Flexible
Be ready to adjust your retirement plans if life throws a curveball—like a market downturn, unexpected expenses, or a health issue. Flexibility is key to a successful long-term strategy.
Work With a Financial Planner
A licensed financial advisor can help you make decisions about when to claim benefits, how to draw down savings, and whether part-time work might benefit your situation.
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Retirement Is About Independence, Not Just Age
Retirement in 2025 and beyond isn’t about reaching a magic number—it’s about reaching financial freedom on your own terms. With people living longer and government benefit options becoming more complex, Canadians must be proactive, informed, and flexible.
Delaying retirement can result in significantly higher monthly income. On the other hand, retiring earlier may offer more time for travel, hobbies, and personal fulfillment—if your finances allow.
Whatever your vision of retirement looks like, the key is careful planning. The new retirement age isn’t 65—it’s whatever age you’re truly ready for a new chapter.