Say Goodbye to Retiring at 65 – New OAS and CPP Age Changes Reshape Retirement in Canada

Published On: July 19, 2025

For decades, age 65 was considered the finish line for working Canadians—the moment you’d start receiving government benefits and enjoy your golden years. But things are changing fast. With longer life expectancy, rising living costs, and evolving pension policies, the idea of a set retirement age is fading.

If you’re planning to retire at 65, now’s the time to take a closer look. You may need to rethink that timeline. Here’s why.

Table of Contents

Shift

More Canadians are rethinking what retirement actually looks like. Age 65 isn’t the hard stop it once was. The average Canadian is living well into their 80s, which means retirement could stretch 20 years or more. That’s a long time to rely on savings and fixed income.

At the same time, the structure of government benefits is encouraging later retirement. Public pensions like the Canada Pension Plan (CPP) and Old Age Security (OAS) haven’t gone away—but the longer you wait to claim them, the more you receive.

CPP

The Canada Pension Plan is flexible. You can start taking it as early as age 60 or delay it up to age 70. But the timing affects how much you get every month.

Here’s how it works:

Age You Start CPP	Monthly Benefit Adjustment
60	36% reduction
65	No adjustment
70	42% increase

So if you take CPP at 60, you’ll get 36% less every month than if you waited until 65. But if you hold out until 70, you’ll receive 42% more. For anyone who’s still earning income or doesn’t need the money right away, waiting could be a smart move.

OAS

Old Age Security works similarly. While the standard start age is 65, you can choose to delay it up to age 70. And just like CPP, the longer you wait, the more you receive.

Age You Start OAS	Monthly Benefit Adjustment
65	Standard amount
70	36% increase

This increase reflects today’s reality: Canadians are living and working longer, so it makes sense to give people an incentive to delay.

Debate

While the current eligibility age for OAS is still 65, the government has looked into raising it before. Back in 2012, there was a plan to push it to 67 by 2029—but that was cancelled in 2016.

Still, the issue could come back. Other countries like the U.S., U.K., and Australia have already increased their retirement ages or are phasing in changes. Canada may revisit the idea, especially if pension costs continue to climb as the population ages.

Working

Canadians over 65 are staying in the workforce longer than ever. In 2000, only about 1 in 10 seniors worked. Now, it’s closer to 1 in 5.

For many, it’s not just about money. Working part-time or freelancing can provide structure, routine, and a sense of purpose. And if you’re not ready to stop entirely, a gradual transition out of full-time work—often called phased retirement—can stretch your savings and ease the emotional shift.

Planning

Retirement today isn’t a date—it’s a decision. Here’s how to make sure you’re ready, whenever that day comes:

Know your benefits: Understand how CPP and OAS work, and how timing affects your monthly payments.
Estimate how long you’ll need income: Use retirement calculators to see how long your savings must last.
Watch for policy updates: Government rules can change, so stay informed.
Be flexible: Maybe work part-time. Maybe delay OAS or CPP. Maybe retire early and live frugally. There’s no one-size-fits-all approach.

In short, retirement at 65 isn’t a rule—it’s a choice. For some, it’s still the right time. But for others, working longer or staggering retirement benefits could make all the difference. With a bit of planning and some flexibility, you can create a retirement timeline that works for you.