Retirement in Canada Is Changing
For decades, Canadians saw 65 as the finish line for full-time work and the start of guaranteed pension income. But in 2025, that line is blurring. Longer lifespans, rising costs, and flexible work options have made the “right age” to retire far less certain.
At the same time, the Canada Pension Plan (CPP) and Old Age Security (OAS) continue to evolve, offering rewards for those who delay. These five commonly searched questions reveal what Canadians really want to know as they plan for a secure retirement.
Also read: CPP and OAS Cost-of-Living Adjustment 2026: How Much Will Benefits Increase?
1. What Is the Best Age to Start CPP in Canada?
There’s no single “best” age — but the timing you choose can make a large difference in lifetime income.
You can begin collecting CPP as early as age 60, but doing so reduces your benefit by 0.6% per month (7.2% per year). Waiting until age 70, on the other hand, increases it by 0.7% per month, or 42% total.
For someone eligible for $1,000/month at 65, this means:
- At 60 → roughly $640/month
- At 65 → full $1,000/month
- At 70 → about $1,420/month
Financially, delaying often pays off if you live past your early 80s. The higher payments protect against longevity risk — outliving your savings — though those needing immediate income may still opt to start early.
2. Should I Delay OAS Until Age 70?
OAS works similarly to CPP in rewarding patience. Canadians can delay starting OAS for up to five years beyond 65, gaining 0.6% per month (36% total) by waiting until 70.
For example:
If your OAS at 65 would be $750/month, delaying to 70 could raise it to about $1,020/month.
Deferring is most beneficial for people who:
- Expect to live longer than average
- Still work or have other income sources past 65
- Want to maximize monthly income later in life
However, those with lower life expectancy, health concerns, or immediate expenses may be better off claiming earlier.
3. Can I Work and Still Collect CPP or OAS?
Yes. You can receive both benefits while continuing to work.
For CPP, even if you’ve started receiving payments before 65, you can keep working and still contribute through the Post-Retirement Benefit (PRB) program. Those contributions add small, incremental increases to your CPP.
OAS is not reduced if you work, but if your annual income exceeds a certain threshold (about $90,000 in 2025), you’ll begin to face an OAS clawback — a gradual reduction in the benefit.
In practice, many Canadians now combine part-time income with partial pension payments, creating a “hybrid” retirement phase that can last for years.
4. Is It Better to Take CPP and OAS Together or Separately?
You can choose when to start each — they’re independent programs.
Some retirees begin CPP early (60-64) but delay OAS until 70 to maximize the guaranteed government pension portion. Others prefer the opposite, starting OAS at 65 but delaying CPP to build a larger base.
The right combination depends on:
- Your income needs in the short vs long term
- Tax efficiency (deferring may push income into years when you owe less)
- Life expectancy (delaying only helps if you live long enough to benefit)
Coordinating both can improve retirement stability, but it’s wise to model different scenarios before choosing.
5. Is 65 Still the Official Retirement Age in Canada?
Technically, yes — but it’s no longer the expected age for everyone.
There’s no mandatory retirement age in Canada (except for certain professions), and government programs like CPP and OAS are structured around flexibility.
- You can work past 65 without penalty.
- You can delay benefits to 70 for higher payments.
- You can retire earlier if you have sufficient private savings.
The shift reflects demographic and economic realities. Canadians are living longer, and traditional pensions are less common. As a result, retirement is increasingly seen as a transition period rather than a single date on the calendar.
How These Changes Affect Future Retirees
The move toward flexible retirement ages carries several implications:
- Planning is more critical. With different income sources starting at different times, Canadians must map out cash-flow needs over 20-30 years.
- Longevity matters. Waiting pays off for those who live longer, but not everyone will.
- Policy may keep evolving. Future governments could adjust eligibility ages or incentives as demographic pressures grow.
- Private savings play a larger role. RRSPs, TFSAs, and workplace pensions fill the gap between work income and government benefits.
Comparing Two Retirement Paths
To illustrate how timing shapes outcomes, let’s compare two simplified examples.
| Scenario | Start Age for CPP/OAS | Monthly Pension | Lifetime Income if Living to 85 |
|---|---|---|---|
| Early Claim | 65 | $1,750 combined | ~$420,000 |
| Delayed Claim | 70 | $2,400 combined | ~$432,000 |
While both scenarios result in similar lifetime totals, delaying provides greater monthly stability and inflation protection in later life — a key advantage as expenses rise with age.
Planning Beyond the Numbers
The decision about when to retire isn’t purely financial.
Some Canadians prefer the security of starting benefits early; others value maximizing long-term income. Emotional readiness, family health history, and even part-time work preferences play a role.
The takeaway: retirement is no longer a rigid age-based event — it’s a personalized financial strategy that should adapt to life’s realities.
FAQs (Quick Recap)
Can I still collect CPP if I keep working after 65?
Yes. You can contribute and earn small annual increases through the Post-Retirement Benefit.
Is delaying OAS always worth it?
Only if you expect a longer life span and can afford to wait for higher payments.
What’s the main risk of delaying CPP or OAS?
If you pass away earlier than expected, you may collect fewer total payments.
Can I apply for CPP and OAS at different times?
Yes. The two programs operate independently.
Will the government increase the OAS age in the future?
There are no current plans, but future adjustments are possible as Canada’s population ages.
Conclusion: Flexibility Is the New Rule
The era of automatically retiring at 65 is over. Today’s CPP and OAS programs give Canadians the freedom to retire when it suits their health, lifestyle, and finances — not when the calendar dictates.
For some, early retirement remains ideal. For others, working a few more years and delaying benefits could yield thousands of dollars more in lifetime income.
In an age of longer lifespans and shifting economics, the smartest move is to stay informed and plan ahead.
