For many years Canadians typically stopped working at age 65 & started receiving government pension benefits including the Canada Pension Plan and Old Age Security. The federal government has now removed this fixed retirement age as of November 2025. The new policy allows Canadians to choose when they want to retire and when they want to start collecting their retirement benefits. This decision can be based on their personal financial situation & their health and lifestyle needs.
What’s Changing as Canada Phases Out the Age-65 Retirement Benchmark
– Retirement at 65 is no longer compulsory under the new rules
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– Employers are prohibited from enforcing retirement solely based on age
– Individuals now have increased freedom to choose when and how they retire, including flexible benefit planning
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The reform signals a shift toward a modern retirement framework that acknowledges longer life spans, varied career choices, and changing financial realities
New Flexible Retirement Pathways Now Available to Older Canadians
Under the updated federal framework, seniors are offered two main options when planning their retirement timeline.
1. Early Retirement
Canadians can opt to retire before reaching age 65 and start receiving CPP and OAS benefits earlier. Because payments begin sooner and are spread over a longer period, monthly amounts are reduced. This pathway may suit individuals who wish to stop working earlier or who have health, lifestyle, or personal reasons for entering retirement ahead of schedule.
2. Deferred Retirement
Alternatively, Canadians may remain in the workforce beyond age 65 and postpone claiming their retirement benefits. Delaying CPP and OAS leads to increased monthly payments, as benefits are drawn later and may include additional credits for postponement. This option is ideal for those aiming to secure higher long-term retirement income.
Both pathways provide flexibility, allowing individuals to shape their retirement around personal goals—whether prioritizing early independence or enhanced financial stability in later years.
Why This Major Retirement Policy Shift Is Important for Seniors
1. Changing Demographics
Canadians are enjoying longer, healthier lives than previous generations. A fixed retirement age of 65 no longer aligns with the needs of many older adults who prefer to stay active and engaged in the workforce.
2. Long-Term Economic Stability
As the population ages, public pension systems face increasing financial pressure. Supporting extended participation in the labour market helps strengthen sustainability and balance long-term funding demands.
3. Greater Freedom and Flexibility
The revised approach emphasizes personal choice, giving Canadians the freedom to shape retirement based on their health, career ambitions, and individual financial circumstances.
How the New Rules Will Affect CPP and OAS Payments
Government pensions continue to play a vital role in retirement income planning.
CPP: Taking benefits earlier results in lower monthly payments, while postponing claims leads to higher payouts. Making contributions beyond age 65 can also increase overall benefits.
OAS: The same principle applies, with reduced payments for early claims and enhanced payments for those who delay.
Together, these adjustments are designed to promote fairness while supporting the long-term sustainability of Canada’s retirement system.
