Retirement in Canada isn’t what it used to be. Back in the day, turning 65 meant it was time to clock out for good. But in 2025, with longer life expectancy, rising living costs, and new government incentives, that magic number is no longer the finish line for many Canadians.
Thanks to updated rules for the Canada Pension Plan (CPP) and Old Age Security (OAS), more people are rethinking how and when they retire—and whether waiting a little longer might be worth it.
Let’s walk through what’s changed, what it means for your wallet, and how to make smart retirement choices in today’s world.
Shift
So, what’s behind the fading tradition of retiring at 65?
- Life expectancy in Canada is now over 82 years. That means you might need to fund two or three decades of retirement.
- The cost of living is up. Groceries, rent, and healthcare are eating into retirement savings faster than ever.
- New rules in 2025 give you bigger benefits if you delay retirement.
- About 20% of Canadians over 65 are still working—many by choice, some by necessity.
In short, retirement isn’t a one-size-fits-all situation anymore.
Updates
The Canadian government has rolled out key changes to both OAS and CPP in 2025, and they’re a big deal if you’re planning to retire soon.
OAS Changes
| Change | Details |
|---|---|
| Deferral Bonus | You can now delay OAS to age 75 and boost your monthly payments by up to 48% |
| Higher Income Threshold | The income level where the OAS clawback begins is higher, letting more seniors keep their full amount |
| Auto Enrollment | Most Canadians are now auto-enrolled, but you need to opt out if you want to delay your OAS start date |
CPP Changes
| Change | Details |
|---|---|
| Higher Payouts | CPP payments are going up in 2025 for people who contributed at the max rate |
| Increased Contribution Limit | The upper limit for pensionable earnings has been raised, letting you contribute more for better future benefits |
| Delayed Start Incentive | Delay CPP to age 70 and earn 0.7% more for every month you wait (that’s 8.4% per year) |
These changes reward patience and long-term planning. The later you claim, the more you get.
Impact
What does this mean for real Canadians? Many are choosing to:
- Continue working into their late 60s and early 70s
- Delay CPP and OAS to lock in bigger monthly payouts
- Retire gradually, easing into part-time or freelance work instead of quitting cold turkey
Check out the table below to see how your benefits change depending on when you start them:
| Start Age | CPP Monthly (Est.) | OAS Monthly (Est.) |
|---|---|---|
| 65 | $1,364 | $713 |
| 67 | ~$1,600 | ~$810 |
| 70 | ~$1,800+ | ~$1,050 |
That’s hundreds of dollars extra per month—money that adds up big time over the years.
Delay?
Should you wait to retire?
It depends. Ask yourself:
- Are you healthy enough to keep working?
- Do you have enough in RRSPs, TFSAs, or a workplace pension to cover early years without OAS/CPP?
- Can you find part-time or flexible work if needed?
- What does your monthly income look like at different start dates?
If your finances can handle a delay, you might end up with more stability and freedom later on.
Tips
Planning to retire in 2025 or beyond? Here are some simple steps to help:
- Check your CPP and OAS numbers through your Service Canada account
- Use an online retirement calculator to compare income at 65, 67, and 70
- Look at your savings and see if you can bridge the gap before benefits kick in
- Consider part-time or gig work to stretch your savings
- Speak with a financial advisor about timing your retirement right
The bottom line? The traditional retirement age of 65 is no longer the rule. In fact, thanks to better incentives and higher costs, it’s becoming the exception.
With the 2025 changes to CPP and OAS, Canadians have more power—and more reason—to retire on their own terms. Whether that’s 65, 70, or somewhere in between, smart planning is the best way to secure your future.
FAQs
What is the new max OAS deferral age?
You can now defer OAS to age 75 for up to 48% more.
How much does CPP grow yearly after 65?
It increases by 8.4% per year delayed.
Can I work and collect CPP at 65?
Yes, you can receive CPP and keep working.
Is retirement at 65 still common?
Less common now; many retire later or part-time.
Does OAS get clawed back?
Yes, but the income threshold is higher in 2025.
