Canada Retirement Age Update: Retirement is rapidly evolving in Canada. With much discussion in recent years and proposals in 2025, even the suggestion of changing the traditionally accepted retirement age of 65 is being floated. Changes in the age of eligibility for benefits under the Canada Pension Plan and Old Age Security considerably alter Canadian workers’ work life and retirement life concepts.
New changes with the OAS and CPP?
Though 65 remains the official retirement age, the government is looking into increasing the age of receiving an OAS pension and perhaps putting forth measures willing to encourage delaying CPP claims. The thought process behind such changes is to ensure long-term sustainability of public pension programs, considering that in Canada aging is fast and life is lengthening.
Currently:
- CPP may be received starting at age 60 (with reductions) or deferred until age 70 (with higher benefits).
- OAS is payable at 65, with a bonus payable for each month it is delayed up to age 70.
The proposals suggest a gradual transition, making the age of 67 the new standard for receipt of OAS and also encouraging Canadians to delay the receipt of CPP.
Why Is This Happening?
By the year 2040, the population of Canadians aged 65 plus is expected to almost double. This in turn increases the life expectancy, allowing people to draw benefits for more years, therefore straining both CPP and OAS systems. In order to keep these programs solvent and paying for themselves, with respect to the future generations of beneficiaries, experts and policy-makers feel that retirement timelines must change.
What Does It Mean for You?
If you are close to retirement age right now, nothing changes immediately since these policy changes are being debated or planned and will be implemented gradually. However, for those retiring in the future in their 40s, preparing for:
- Going to a late retirement age to receive their full benefits
- Increasing incentives for people to delay taking CPP or OAS
- Setting aside more of their own personal savings for early retirement
Plan On It
There is no better time for Canadians than now to:
- Look into their retirement planning
- Maximize on RRSPs and TFSAs
- Leverage My Service Canada Account to check their eligibility and projections for OAS and CPP
Also Read:Canada Retirement Overhaul 2025: OAS And CPP Age Changes You Must Know