For generations, Canadians viewed age 65 as the golden number — the time to retire, collect Old Age Security (OAS), and start enjoying the fruits of decades of work. But as Canadians live longer and stay healthier well into their 80s, that one-size-fits-all definition of retirement no longer fits modern reality.
In 2025, the idea of “goodbye to retiring at 65” has gained ground across policy circles, workplaces, and households. With flexible rules for OAS and Canada Pension Plan (CPP) benefits — and ongoing discussions about sustainability — retirement in Canada is evolving from a fixed event to a personalized financial strategy.
“Retirement is no longer about a date on the calendar; it’s about readiness — financial, physical, and emotional,” says Laura McIntyre, a senior economist at the Canadian Institute for Retirement Studies.
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Goodbye to Retiring at 65
The long-standing notion that Canadians must stop working at 65 is fading fast. Today’s retirees are more active, more financially aware, and often living 20–25 years beyond retirement. The government’s flexible design of OAS and CPP allows Canadians to retire on their own terms — as early as 60 or as late as 70.
Those who delay benefit collection beyond 65 receive a significant monthly increase:
- Up to 36% higher OAS payments if deferred to age 70
- Up to 42% higher CPP payments if deferred to age 70
This shift empowers Canadians to customize retirement timing based on personal finances, health, and lifestyle goals.
“Phased retirement is becoming the new normal. Canadians want income security but also a sense of purpose,” says Mark Thomson, financial planner and author of Retire Smart Canada.
Overview of Retirement Transition in Canada
| Factor | Old System (Fixed Age 65) | New System (Flexible Retirement) |
|---|---|---|
| Retirement Age | Fixed at 65 | Flexible: 60–70 (CPP) / 65–70 (OAS) |
| Benefit Increase for Delay | None | 36% for OAS, 42% for CPP |
| Early Access Option | Not common | Early CPP access at 60 (reduced benefit) |
| Policy Focus | Defined end of work life | Financial flexibility and independence |
| Retirement Duration | 15–20 years | Often 25–30 years due to longer life expectancy |
New Age Rules for Collecting OAS & CPP
Old Age Security (OAS)
- Starts at 65, can be delayed until 70
- Increase: 0.6% per month of delay (36% total at 70)
- Maximum Payment (2025):
- Ages 65–74: $740.09/month
- Ages 75+: $814.10/month (includes 10% age increase)
- Indexed quarterly for inflation (CPI-based)
- Taxable if income exceeds $86,912 (partial clawback begins)
Canada Pension Plan (CPP)
- Available between the ages of 60–70
- Increase: 0.7% per month after age 65 (up to 42% more at 70)
- Average Monthly Benefit (2025): $848
- Maximum Monthly Benefit (2025): $1,433
- Based on lifetime contributions and average earnings
“The CPP and OAS systems are designed for flexibility — to accommodate longer working lives and evolving financial needs,” explains CRA spokesperson Julie Dupont.
Proposed Age Increases for OAS & CPP
Currently, there is no confirmed change to the official eligibility age. However, several policy discussions have proposed raising the start age for future generations to ensure long-term sustainability.
Potential Policy Proposal (Not Enacted):
- Raise OAS and CPP eligibility to 67 for Canadians born after 1960
- Intended to offset rising costs from Canada’s aging population
- Would apply gradually to preserve fairness
Government Position (2025):
“The official retirement ages remain unchanged, and no approved legislation increases OAS or CPP eligibility. Canadians should rely only on CRA and official government communications,” according to a recent CRA advisory.
Current OAS and CPP Benefit Snapshot (2025)
| Benefit Type | Age Group | Maximum Monthly Payment | Key Details |
|---|---|---|---|
| OAS | 65–74 | $740.09 | Indexed quarterly, clawback after $86,912 annual income |
| OAS | 75+ | $814.10 | 10% age-related increase |
| CPP (at 65) | Average retiree | $848.00 | Based on contributions |
| CPP (maximum) | Retirement benefit | $1,433.00 | Inflation-adjusted annually |
| GIS (add-on) | Low-income seniors | Up to $1,095 | Supplement for OAS recipients |
Why the Retirement Shift Matters?
This evolution in retirement thinking carries major financial and social implications. Canadians are living longer, but longevity comes with cost pressures — from healthcare to housing.
Key Impacts:
- Financial Flexibility: Working longer helps extend savings and maximize pension benefits.
- Healthcare Preparedness: A longer retirement demands sustainable income for rising medical costs.
- Labor Force Stability: Delaying retirement supports industries facing skilled worker shortages.
“Extending work years doesn’t just help the economy — it gives people purpose,” notes Dr. Olivia Hartman, demography professor at the University of Toronto.
How to Plan Your Retirement Under the New Rules?
- Evaluate When to Take CPP/OAS
- Use CRA’s online OAS and CPP calculators to project benefits at different ages.
- Work While Receiving Benefits
- CPP contributors under 65 can still pay into the plan, boosting future payouts.
- Consider Deferral for Higher Payouts
- Delaying CPP or OAS until 70 can increase lifetime value substantially.
- Review Tax Implications
- Both CPP and OAS are taxable income; strategic withdrawals can reduce overall tax burdens.
- Check Guaranteed Income Supplement (GIS)
- Seniors with lower incomes can receive extra monthly support on top of OAS.
Retirement Planning
| Scenario | Start Age | CPP Monthly (Est.) | OAS Monthly (Est.) | Total Monthly (Est.) |
|---|---|---|---|---|
| Early Retiree | 60 | $700 | – | $700 |
| Traditional Retiree | 65 | $1,000 | $740 | $1,740 |
| Late Retiree | 70 | $1,433 | $1,007 | $2,440 |
Example assumes average contribution history and inflation-indexed adjustments (2025 rates).
New CRA Clarification – October 2025 Update
“The official retirement age for Old Age Security remains at 65, and the Canada Pension Plan continues to offer flexibility between ages 60 and 70. Any claims of an increase to 67 or sudden benefit cuts are false,” said a CRA official statement.
Canadians are advised to rely only on official sources such as Canada.ca, CRA, or Service Canada to verify benefit updates.
The Bigger Picture: A Personalized Retirement Era
Retirement in Canada has entered a new era — one defined by choice, flexibility, and longevity. Instead of viewing age 65 as an endpoint, Canadians are encouraged to treat it as a midpoint in a longer, healthier life.
The combination of OAS, CPP, private savings, and workplace pensions will determine each person’s ideal timing. By adapting early and staying informed, Canadians can craft a retirement that fits their health, goals, and lifestyle — not just a number.
“We’re saying goodbye to the idea that everyone retires at 65,” says Sylvia Grant, senior policy advisor at Employment and Social Development Canada. “Retirement is now about readiness, not age.”
FAQs
Q1. Is retirement age still 65?
Ans. OAS starts at 65 but can be deferred to 70 for larger payments. CPP can start anytime between 60–70, depending on financial need.
Q2. How much do benefits increase by delaying?
Ans. OAS rises 0.6% per month after 65 (up to 36% total), and CPP rises 0.7% monthly after 65 (up to 42% total).
Q3. Are there confirmed plans to raise OAS or CPP eligibility?
Ans. No. As of 2025, no changes have been legislated to raise the retirement age to 67.
Q4. Can I work while receiving OAS or CPP?
Ans. Yes, many retirees continue working. CPP contributions made under age 65 can boost future benefits.
Q5. Are OAS and CPP taxable?
Ans. Yes, both are considered taxable income. However, eligible low-income seniors may qualify for non-taxable GIS payments.