Goodbye to Retiring at 65 – The New Age for Collecting OAS & CPP Changes Everything in Canada

Canada’s retirement landscape is undergoing one of its biggest shifts in decades. For generations, age 65 has been viewed as the traditional milestone for ending full-time work and collecting key government benefits like Old Age Security (OAS) and the Canada Pension Plan (CPP). But new demographic pressures, rising life expectancy, and federal policy adjustments are reshaping how Canadians plan for retirement. As the rules evolve, many are discovering that relying on age 65 may no longer be enough — or even realistic.

Why Canadians Are Rethinking the Traditional Age 65 Retirement

The shift away from 65 as the standard retirement age isn’t driven by one single change. Instead, a combination of financial, demographic, and policy updates is forcing Canadians to reassess their timelines.

Canadians are living longer, which means retirement savings must stretch further. At the same time, inflation and housing costs have increased sharply, making it harder for workers to leave the workforce early. Policies surrounding OAS and CPP have also changed in ways that push many people to delay collecting benefits.

For many households, retiring at 65 could now mean facing a long retirement with reduced monthly income — unless they adapt their planning strategy.

What’s Changing With OAS and CPP?

Over the past few years, the Canadian government has introduced adjustments to OAS and CPP that give retirees more flexibility but also create confusion around the “best” age to start benefits.

Here’s what stands out:

• OAS Enhancement: Canadians who delay collecting OAS past age 65 can now receive up to 36% more by age 70.
• CPP Increase: Delaying CPP increases benefits by 8.4% per year after 65, up to age 70 — a potential 42% boost.
• Clawback Thresholds Rising: Higher-income seniors face OAS clawbacks, meaning planning the right age to start benefits is more important than ever.
• GIS Adjustments: Low-income seniors delaying benefits may lose access to income-tested programs like the Guaranteed Income Supplement.

Together, these changes are altering the financial incentives for when to take benefits. For many, taking OAS and CPP at 65 may no longer be optimal.

Table: Comparing OAS & CPP Benefits by Starting Age

Benefit Type
Start at 65
Start at 67
Start at 70

CPP Increase
0%
+16.8%
+42%

OAS Increase
0%
+14.4%
+36%

Long-Term Income
Standard
Higher
Highest

Risk Factor
Lower monthly income
Balance of risk vs. reward
Best for long lifespan

These increases demonstrate why many financial experts now recommend examining retirement age more critically, especially if you expect to live past your late 80s.

Why Retiring at 65 May No Longer Work

The old “65 and done” model doesn’t align with today’s financial realities. A 65-year-old Canadian today could easily spend 25 to 30 years in retirement. Without adequate savings, relying solely on OAS and CPP may not be enough.

A few key challenges include:

• Rising medical and assisted living costs
• Increased rent and homeownership expenses
• Market fluctuations affecting retirement investments
• Longer retirements requiring larger nest eggs

Because of these pressures, more Canadians now work part-time beyond age 65, delay benefits, or shift to flexible, semi-retirement models.

How Canadians Can Adapt Their Retirement Strategy

Planning ahead makes the difference between a comfortable retirement and financial stress. Experts recommend:

• Run long-term projections: Estimate retirement income based on collecting OAS/CPP at ages 65, 67, and 70.
• Work part-time longer: Even one or two extra years of earning dramatically boosts savings and reduces withdrawals.
• Delay CPP/OAS if possible: This provides higher guaranteed income for life.
• Reduce taxes: Strategic withdrawals from RRSPs before age 70 can reduce OAS clawbacks later.
• Diversify savings: Relying only on government benefits is no longer realistic.

For many Canadians, retirement is becoming less about a date — and more about a strategy.

Conclusion

As Canada updates its pension programs and demographic trends shift, the traditional age-65 retirement is becoming outdated. With higher incentives to delay benefits and longer life expectancies, the most financially secure retirees will be those who plan early, evaluate all options, and adapt to the new system. The retirement age of the future will look very different — and preparing today is essential.

FAQs

What is the new recommended age to collect CPP and OAS?

There is no official “new age,” but many experts say delaying benefits to 67 or even 70 can significantly increase long-term income.

Why are more Canadians delaying CPP and OAS?

Because delayed benefits grow by 14, providing much higher lifetime income for those with long expected lifespans.

Is it still okay to retire at 65?

Yes — but only if your savings, investments, and income plan support a retirement that may last 25–30 years.

How do OAS clawbacks affect my benefits?

If your income is above the annual threshold, part of your OAS is reduced. Strategic tax and withdrawal planning can help avoid clawbacks.

What if I can’t afford to delay CPP or OAS?

You can still collect at 65 or earlier (CPP at 60), but you may need a more conservative spending plan or supplemental income.