As the government says Goodbye to Retiring at 65 in Canada, these Major Changes Affect Millions of seniors. The government is introducing it as a significant change in retirement planning, affecting millions of Canadians born after 1960.
Goodbye to Retiring at 65 in Canada
Canada’s traditional retirement age of 65 is officially being phased out in favor of a flexible, gradually increasing standard that now links eligibility to life expectancy and fiscal sustainability. This long-anticipated change affects those born after 1960, pushing the expected retirement age up to 67 or 68 over the coming decades.
Why Is the Retirement Age Increasing?
Demographic pressures—driven by longer average lifespans and a shrinking ratio of workers to retirees—have made the old “65 and done” model financially unsustainable.
The federal government’s new legislation ties the age of eligibility for Old Age Security (OAS) and the Canada Pension Plan (CPP) to actuarial tables that forecast longevity. As life expectancy rises, so does the pension age.
Who Will Be Affected and When?
Not everyone feels the impact at once. The rollout schedule is as follows:
| Birth Year | OAS/CPP Age Today | New Eligibility Age |
|---|---|---|
| 1959 and earlier | 65 | 65 |
| 1960–1964 | 65 | 66 by 2026–2029 |
| 1965–1969 | 65 | 67 by 2030–2034 |
| 1970 and later | 65 | 68 by 2035+ |
Millions born in the early 1960s must plan to work an extra year or two compared with older peers.
Financial Impact on Future Retirees
Delaying retirement by one or two years can increase lifetime pension benefits, but it also delays when you can tap into guaranteed income. For someone earning an average CPP of $800 per month, a two‑year delay could mean an extra $100–$150 monthly boost once benefits begin—yet it also means deferring that income until later.
How to Adjust Your Retirement Plan
With the pension age rising, Canadians should:
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Review workplace pension and personal savings goals.
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Estimate how much extra income you’ll need per year if you retire later.
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Consider phased retirement or part‑time work to bridge the gap.
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Maximize RRSP and TFSA contributions now to build a larger nest egg.
Using online retirement calculators with the updated ages will help set realistic targets.
Government Reviews and Future Prospects
The government will review the pension age every five years, taking into account demographic shifts and economic conditions. If longevity continues to climb rapidly, further modest increases could follow. Staying informed through Canada Revenue Agency (CRA) updates is essential.
Balancing Longer Careers and Quality of Life
While working longer can bolster retirement security, many people worry about health or want to enjoy leisure time earlier. Phased retirement, second‑career opportunities, or flexible schedules can help maintain well‑being while adapting to the new norm.
Thank you for reading and taking steps to secure your retirement future.
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