For decades, the age of 65 symbolized a milestone in Canadian life — the moment when work slows down, public pensions begin, and retirement finally becomes a reality. But in 2025–2026, that once-clear benchmark is undergoing a dramatic shift. Rising life expectancy, labour shortages, inflation pressures, and evolving government policies are reshaping how and when Canadians can access the Old Age Security (OAS) and Canada Pension Plan (CPP).

Across Canada, both younger and older workers are rethinking retirement. Employers are adapting to an aging workforce, economists warn of future pension sustainability challenges, and the federal government is sending strong signals that retiring at 65 is no longer the default. This article explores the new trends, policies, and financial strategies that are redefining retirement in Canada — and why the traditional age of 65 may soon be a relic of the past.

The Changing Meaning of Age 65 in Canada

Longer Lifespans and a Growing Senior Population

Life expectancy in Canada has climbed substantially over the past decades. While it fluctuated during the pandemic, the long-term trend shows continued improvements. Today, the average Canadian can expect to live well into their 80s, meaning pensions must stretch across 20 to 30 years or more.

By 2030, more than 23% of Canada’s population will be over 65. This unprecedented demographic shift places pressure on public pension programs, health-care systems, and labour markets. The government’s response: encourage older adults to stay employed longer and delay pension collection.

Why Age 65 Is No Longer the Standard

The age of 65 was originally chosen in the 1960s, when the average Canadian lived less than 10 years beyond that point. Today, many older adults remain active, productive, and financially capable of working far longer.

As a result, both OAS and CPP allow flexible access ages — and Canadians increasingly delay claiming benefits to maximize income. At the same time, rising inflation, expensive housing markets, and higher living costs mean many can no longer afford to stop working at 65.

OAS: The Push Toward Later Eligibility

How OAS Works Today

The Old Age Security program provides a monthly benefit to seniors aged 65 and above, based on residency in Canada. The maximum monthly OAS benefit has grown significantly over the past decade due to indexation and demographic needs.

Delaying OAS for Higher Benefits

One of the biggest changes is the growing trend of delaying OAS up to age 70. Delaying increases benefits by 0.6% per month, or 7.2% per year — up to a 36% higher payment at age 70.

More Canadians are choosing this strategy as they stay in the workforce longer. The federal government has actively promoted delayed claiming as a tool for retirement resilience, especially in response to inflation.

Example OAS Comparison

Future Policy Shifts

Although no official decision has been made to raise the OAS eligibility age, economists and policy experts argue it is inevitable. With Canada’s aging population expanding rapidly, the government faces increasing financial pressure to adjust benefits.

Internationally, countries such as Australia, Denmark, and the UK have already moved toward retirement ages of 67 to 69. Canada is watching closely, and many analysts believe an increase to the OAS age could be seriously considered within the next decade.

CPP: A More Flexible but Increasingly Strategic Pension

How CPP Is Evolving

The Canada Pension Plan is a contributory program that adjusts based on how long and how much someone has worked. CPP enhances retirement income, especially for long-term workers, but Canadians now face more complex decisions about when to claim it.

The New Trend: Claiming CPP After 65

Like OAS, CPP offers increased benefits for delaying — up to age 70. Starting CPP at 60 reduces the pension by up to 36% permanently, while delaying to 70 boosts it by up to 42%.

Rising costs and longer lifespans have made delayed CPP a far more attractive option. Financial advisors now commonly recommend waiting until 70 for those who have good health, secure employment, or savings to bridge the gap.

CPP Benefit Scenarios

Increased Contributions for Workers

The enhanced CPP (phased in since 2019) has increased contribution rates for both employees and employers. This ensures higher benefits in retirement but also signals a recognition that future retirees may need more income — especially if the traditional retirement age continues shifting upward.

Why More Canadians Are Working Beyond 65

Labour Shortages Across Industries

Canada is facing chronic labour shortages in health care, construction, transportation, retail, hospitality, and skilled trades. Employers are increasingly recruiting older adults to fill gaps. Many companies now offer flexible schedules, part-time roles, and remote work specifically tailored for seniors who want to remain active without full-time commitments.

Financial Pressures Are Rising

Housing affordability remains one of Canada’s biggest challenges. Mortgage rates, rent increases, soaring food prices, and rising property taxes have pushed many seniors to remain in the workforce to maintain financial stability.

Retirees often cite inflation and longer lifespans as key reasons for delaying pension collection.

The Healthy Aging Advantage

Today’s seniors are healthier, more physically active, and more technologically engaged than any previous generation. This allows them to continue working in fields ranging from teaching to consulting, entrepreneurship, and public service.

The Future Retirement Age: What Experts Predict

The Shift Toward Age 67 or Higher

Most retirement analysts agree that Canada’s “real retirement age” — the age at which most people stop working — has already begun drifting past 65.

Many predict the government will eventually increase the official OAS age to 67 or consider indexing it to life expectancy.

This aligns Canada with international trends and eases pressure on pension budgets.

Workers in Their 40s and 50s Will Be Most Affected

Canadians who are currently nearing retirement may not see major policy changes. However, younger generations — especially those born after 1980 — could face a higher eligibility age for OAS and possibly changes to CPP rules in the future.

Financial Planning in the New Retirement Landscape

Why Retirees Must Adjust Their Strategies

As the age of retirement shifts, Canadians must rethink how they save, invest, and plan for the future. Relying solely on OAS and CPP is no longer sufficient for most households.

Key Strategies for Canadians

Working beyond 65 is increasingly normalized, providing higher savings and stronger pension outcomes.
Delaying OAS and CPP can significantly boost lifetime income.
Building private savings through RRSPs, TFSAs, and employer plans is more critical than ever.
Avoiding early CPP at 60 can prevent major financial gaps later in life.
Planning for health-care costs is essential as medical needs increase with age.

Retirement Income Comparison

What This Shift Means for Canada’s Economy

Older Workers Strengthen the Labour Market

More seniors working means more tax revenue, stronger productivity, and less strain on social programs. This helps Canada manage demographic challenges more effectively.

The Pension System Becomes More Sustainable

Delayed claiming of OAS and CPP reduces long-term government expenditures and keeps public finances healthier. Economists view this as essential for future stability.

Intergenerational Workforce Benefits

Workplaces now feature four generations working together, from Gen Z to baby boomers. This leads to improved mentorship, knowledge sharing, and team diversity.

Conclusion

The idea of retiring at 65 is no longer a fixed reality in Canada. Economic forces, demographic trends, and evolving government policies have reshaped expectations and pushed the retirement age into a new era.

For many Canadians, working beyond 65 is no longer a choice but a practical and financially smart option. OAS and CPP rules now reward delayed retirement more strongly than ever, and experts anticipate further policy shifts in the coming years — including a possible gradual move toward age 67 or higher.

As the country adapts to a rapidly aging population, Canadians must rethink their savings strategies, pension decisions, and long-term financial planning. Retirement is becoming more flexible, more personalized, and more dependent on individual health, income, and employment needs.

The bottom line: the age of 65 is no longer the finish line — it’s the starting point for a new chapter in how Canada defines retirement.