Retiring at 65 Is No Longer Guaranteed, What Seniors Must Know for 2025 and Beyond

The dream of logging off at 65 and never checking another work email has long been seen as the Canadian standard. But for many, that milestone is now more of a moving target than a guaranteed finish line. Longer lifespans, rising costs, and evolving pension incentives are reshaping what retirement looks like in 2025 and beyond.

Why 65 Became the “Magic Number”

Back in the mid-20th century, the idea of retiring at 65 made perfect sense. Life expectancy was lower, jobs were more physically demanding, and pensions were structured for a retirement lasting 10 to 15 years.

Today, the picture is very different. Statistics Canada reports that the average Canadian now lives into their mid-80s, and many remain healthy and active well into their later years. That means retirement may last 25–30 years, creating what experts call a “second adulthood.”

The challenge is clear: funding three decades without a paycheck requires not just savings but careful pension timing and planning.

The Rising Cost of Retirement

Housing, groceries, healthcare, and everyday services have surged in cost. For many Canadians, sticking to the “65 rule” may mean facing financial strain. Seniors are increasingly weighing whether to retire on time or continue working a little longer to build stronger savings and higher pension payouts.

The Math Behind Pension Timing

Both Canada Pension Plan (CPP) and Old Age Security (OAS) include built-in incentives for delaying retirement.

Benefit	Earliest Start	Standard Age	Maximum Delay	Reduction (per month early)	Increase (per month delayed)
CPP	60	65	70	-0.6%	+0.7%
OAS	65	65	70	N/A	+0.6%

• Taking CPP at 60 reduces monthly payments by 36% compared to waiting until 65.
• Deferring CPP until 70 boosts payments by 42% for life.
• OAS doesn’t allow early access but offers a 36% increase if delayed to 70.

This creates a tradeoff: take smaller payments earlier for more years, or wait for larger cheques over fewer years.

Health, Longevity, and the Timing Question

For those with health issues or shorter life expectancies, taking CPP earlier may make sense. But healthy seniors expecting to live into their 90s could see significant long-term gains by delaying benefits. The choice is personal, shaped by lifestyle, health, and family history.

Why Canadians Are Working Longer

In 2000, only about 1 in 10 Canadians over 65 were still working. Today, it’s closer to 1 in 5. The reasons vary:

• Many need the extra income to cover rising living costs.
• Others enjoy the routine, social life, and sense of purpose work provides.
• Flexible work arrangements, part-time jobs, and consulting roles make phased retirement more attractive.

Instead of an abrupt stop, Canadians are increasingly easing into retirement, keeping one foot in the workforce while enjoying more freedom.

Could the Retirement Age Rise?

The idea of raising the official retirement age isn’t new. In 2012, Ottawa announced a plan to gradually increase OAS eligibility to 67. Public pushback reversed the decision in 2016, but the financial pressures haven’t gone away.

With fewer workers paying into the system and more retirees drawing benefits, the cost of pensions continues to rise. Countries like the U.S. and the U.K. have already nudged retirement ages upward. If fiscal pressure continues, Canada may revisit the proposal.

The Real Question: Affording Retirement

For Canadians, the real issue isn’t whether they retire at 65—it’s whether they can retire comfortably at all. That depends on three main factors:

• Savings: How much has been built in RRSPs, TFSAs, or other investments?
• Pension Timing: Will CPP and OAS be taken early, at 65, or delayed for bigger benefits?
• Lifestyle: Will retirement mean modest living or years of travel, hobbies, and higher spending?

Planning for Retirement in 2025

For those eyeing retirement now, here are key considerations:

• Run the numbers carefully: Use Service Canada calculators to model income under different start dates.
• Plan for inflation: Rising costs erode savings, making indexed pensions and conservative planning vital.
• Think about health and longevity: Decisions should factor in expected lifespan and medical needs.
• Consider part-time work: Phased retirement can provide income while easing into post-work life.

Looking Ahead – A Shifting Finish Line

The once-solid idea of retirement at 65 has become more flexible, shaped by economics, demographics, and personal choice. While many Canadians will continue to mark 65 as the milestone, others will push the date further as they balance health, finances, and lifestyle goals.

The question for 2025 isn’t simply “What age should I retire?” but rather “What age allows me to retire securely and comfortably?”

FAQs on Canada’s Retirement Age in 2025

Q1. Is 65 still the official retirement age in Canada?
Yes, 65 remains the standard age for OAS and CPP, but Canadians can choose to start CPP as early as 60 or delay CPP and OAS to 70 for higher payouts.

Q2. What happens if I take CPP at 60?
Your monthly payments are reduced by 36% compared to waiting until 65.

Q3. Is it worth delaying CPP or OAS to 70?
For healthy Canadians expecting to live into their late 80s or 90s, delaying can result in much higher lifetime benefits.

Q4. Could the government raise the retirement age again?
It’s possible. While a 2012 plan to raise OAS to 67 was reversed, rising pension costs may push the debate back onto the agenda.

Q5. What’s the biggest factor in deciding when to retire?
Personal financial readiness—including savings, pension timing, and lifestyle needs—matters more than hitting an arbitrary age.