For generations, the goal of retiring at 65 in Canada was more than just a number—it was a cultural milestone, the official entry into your golden years. This has been the traditional age to hang up your work boots and start drawing from vital government pensions. However, the ground beneath our feet is shifting. The financial and social landscape of retirement is changing so dramatically that the long-held dream of retiring at 65 in Canada is becoming less of a finish line and more of a flexible checkpoint. New rules and powerful incentives are empowering Canadians to rethink what retirement looks like, making the choice of retiring at 65 in Canada more of a personal calculation than a predetermined date on a calendar.
The conversation is no longer just about whether you can afford to stop working, but about how you can strategically maximize your income for the rest of your life. While headlines have sparked rumors about a mandatory age increase, the real story is about choice. The government has built significant financial rewards into the Canada Pension Plan (CPP) and Old Age Security (OAS) programs for those who wait. Delaying your benefits can lead to substantially higher monthly payments for life, a crucial advantage as living costs rise. This makes the decision of when to start collecting benefits one of the most important financial choices you’ll make, fundamentally changing the discussion around retiring at 65 in Canada for good.
Retiring at 65
| Benefit Program | Maximum Combined Monthly Amount (2025) | Managed By | Eligibility Age |
|---|---|---|---|
| CPP + OAS Combined | ~$2,233 | Canada Revenue Agency (CRA) | CPP: 60+, OAS: 65+ |
Fact vs. Fiction: Is the Retirement Age Really Changing to 67?
- You may have seen alarming articles or social media posts claiming that the Canadian government is raising the retirement age to 67. The idea is that you’d have to wait two extra years to get your OAS benefits, causing a lot of stress for those planning their finances.
- Let’s clear the air: as of late 2025, this is just a rumor. The Canadian government has not passed any new laws to change the eligibility age for OAS or CPP. While a previous government did propose moving the OAS age to 67, the plan was scrapped and has not been revived. Official sources confirm that any such significant change would be announced years in advance, giving everyone ample time to adjust their plans. So, for now, the rules you know are the rules that apply, and the idea of retiring at 65 in Canada is still very much a legal reality, even if it’s not always the best financial one.
Understanding Your Pension Options: CPP and OAS
Your retirement income from the government will likely come from two main sources: the Canada Pension Plan (CPP) and Old Age Security (OAS). They sound similar, but they work very differently.
Canada Pension Plan (CPP): Your Contribution, Your Choice
Think of CPP as a savings plan you paid into throughout your working life. The amount you get back depends on how much you earned and contributed. To qualify, you just need to have made one valid contribution.
The standard age to start CPP is 65, but you have options:
- Start early at 60: You can begin payments as soon as you turn 60. But there’s a catch: your payments are permanently reduced by 0.6% for every month before your 65th birthday. This adds up to a 36% reduction if you start right at 60.
- Wait until 70: If you delay, your payments increase by 0.7% for every month you wait past 65. This can boost your pension by up to 42% if you hold off until age 70. This flexibility makes retiring at 65 in Canada just one of several possibilities.
Old Age Security (OAS): A Foundation for Retirement
- OAS is different. It’s a benefit available to most Canadians 65 and older, regardless of their work history. Eligibility is based on how long you’ve lived in Canada.
- Like CPP, you can choose to delay your OAS payments. If you wait past 65, your monthly amount increases by 0.6% for each month of deferral, up to a maximum of 36% at age 70. This incentive is a key reason why many are rethinking the traditional timeline for retiring at 65 in Canada.
Maximizing Your Retirement Income: The Financials
- You might have heard talk of a $2,233 monthly payment for seniors in 2025. It’s important to know this isn’t a flat rate for everyone. This figure represents the maximum possible amount you could get if you qualify for the highest CPP payment and the full OAS pension.
- To get this, you would need to have consistently contributed the maximum amount to the CPP for most of your career and also meet the residency requirements for full OAS. For most people, the actual payment will be less than this. The average CPP payment is significantly lower than the maximum. This reality check is important when planning for life after retiring at 65 in Canada.
The Financial Incentive to Wait: Should You Defer Your Benefits?
- Deciding when to take your pensions is a huge decision. There’s no single right answer, as it depends on your health, personal savings, and what you want your retirement to look like. However, the numbers make a strong case for waiting.
- A 42% larger CPP payment for life is a game-changer. It acts as a powerful insurance policy against inflation and the risk of outliving your money. Yes, you’ll need other savings (like an RRSP or TFSA) to cover your expenses from 65 to 70, but the reward is a significantly larger, guaranteed income stream for the rest of your life. For many people with an average life expectancy, delaying pensions is the smartest financial move, making the automatic choice of retiring at 65 in Canada a thing of the past.
Is CPP and OAS Enough for a Comfortable Retirement?
Let’s be direct: for the vast majority of Canadians, CPP and OAS alone won’t be enough to fund a comfortable retirement. These government pensions are designed to be a foundation, not the entire structure. Even if you receive the maximum benefits, the total income will likely fall short of covering all your expenses, especially if you want to travel or pursue hobbies. This is why personal savings are not just a good idea they’re essential. Your RRSPs, TFSAs, and other investments are what will fill the gap and allow you to live the retirement you’ve envisioned, whether you start that journey after retiring at 65 in Canada or later.
FAQs on Retiring at 65
If you start your CPP at age 60, your monthly payments will be permanently reduced by 36% compared to what you would have received at 65. While you get the money sooner, the lower payment amount will last for the rest of your life.
There is no penalty for working while receiving OAS. However, if your individual net income exceeds a certain threshold ($93,454 for 2025), you may have to repay part or all of your OAS pension. This is known as the OAS “recovery tax” or “clawback.”
The full OAS pension is given to those who have lived in Canada for at least 40 years after turning 18. If you have lived in Canada for less than 40 years, you may still qualify for a partial pension, with the amount calculated based on the number of years you resided in the country.
No, the government cannot force you to retire at a certain age. The changes and discussions are about the eligibility age for government benefits like OAS. The decision of when to stop working remains a personal one. The shift is about incentivizing, not mandating, a later start to be collecting pensions.
The maximum combined monthly amount from both CPP and OAS is projected to be around $2,233 in 2025. This is for individuals who qualify for the maximum CPP payment (based on contributions) and the full OAS pension.
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