For decades, age 65 was considered the golden number for Canadian retirement. It marked the milestone when Canada Pension Plan (CPP) and Old Age Security (OAS) benefits became available and the workforce bid farewell. But in 2025, that long-standing tradition is undergoing a seismic shift.
Thanks to a series of major reforms, the Canadian government is reshaping how and when retirees should claim their benefits. With longer life expectancy, soaring living costs, and new financial incentives for delaying retirement, Canadians are being urged to rethink the meaning of “retirement age.”
Whether you’re planning to retire in the next few years or re-evaluating your long-term goals, understanding these changes is essential to making the most out of your retirement income.
Why the Retirement Landscape Is Changing
Several key factors are influencing this nationwide retirement transformation:
- Life expectancy in Canada has climbed beyond 82 years, meaning Canadians could spend 20–30 years in retirement.
- Inflation and the cost of living—particularly in housing, groceries, and healthcare—are outpacing traditional retirement savings.
- Updated CPP and OAS rules now reward Canadians for working longer and deferring their benefits.
- Approximately 1 in 5 seniors over 65 are still working, many due to financial necessity, but others by choice.
In short, retirement at 65 is no longer a one-size-fits-all decision—and often, waiting can pay off.
What’s New in CPP and OAS in 2025?
The Canada Pension Plan (CPP) and Old Age Security (OAS) have both received impactful upgrades in 2025, altering the way benefits are calculated and distributed.
OAS Reforms
| Change | Details |
|---|---|
| Deferral Bonus | You can now delay OAS up to age 75 to receive a 48% increase. |
| Higher Income Threshold | The clawback threshold is now higher, allowing more seniors to retain full OAS. |
| Auto-Enrollment | Most Canadians are now automatically enrolled at 65 unless they opt to delay. |
CPP Reforms
| Change | Details |
|---|---|
| Higher Monthly Payments | CPP payouts increased in 2025 for those with max contributions. |
| Raised Contribution Limits | The maximum pensionable earnings ceiling was increased. |
| Delay Incentives | Delaying CPP to age 70 earns an extra 0.7% per month (8.4% annually). |
These reforms reward those who choose to retire later, incentivizing patience and long-term planning.
How Retirement Age Affects Monthly Payments
Delaying your CPP and OAS benefits can significantly boost your monthly income. Here’s how your payment estimates might vary:
| Start Age | Estimated CPP Monthly | Estimated OAS Monthly |
|---|---|---|
| 65 | $1,364 | $713 |
| 67 | ~$1,600 | ~$810 |
| 70 | $1,800+ | ~$1,050 |
Delaying both benefits until age 70 could result in over $9,000 more per year in retirement income—without even touching personal savings.
Should You Delay Your Retirement?
While these changes make delaying retirement more attractive, the right decision depends on your personal and financial circumstances. Ask yourself:
- Are you in good health and able to keep working?
- Do you have enough savings (e.g., RRSPs, TFSAs) to bridge the gap if delaying benefits?
- Is part-time or flexible work a realistic option during the transition?
- What income level do you need to live comfortably?
Delaying isn’t for everyone, but for many, it provides greater financial stability and higher monthly payments down the road.
Top Tips for Retirement Planning in 2025
Thinking of retiring this year or in the near future? Here are actionable steps to help you adapt:
- Log in to your My Service Canada Account to check your estimated CPP and OAS benefits.
- Use online calculators to compare income scenarios at ages 65, 67, and 70.
- Consult a financial advisor for a personalized plan that balances work, savings, and pensions.
- Explore phased retirement—working part-time to ease the transition.
- Monitor your expenses and plan for inflation over a 20–30-year retirement horizon.
Whether you decide to work a few extra years or delay your pension benefits, these updates give you more control and greater financial rewards. The key is planning smart, reviewing your options, and choosing what works best for your goals and lifestyle.
The retirement game in Canada has changed. Turning 65 is no longer the automatic exit ramp from the workforce. Thanks to CPP and OAS reforms in 2025, Canadians are encouraged—and often better off—delaying retirement for a more secure financial future.
FAQs
What’s the maximum bonus for delaying CPP and OAS?
If you delay CPP to age 70, you can earn an extra 42%, and OAS to age 75 can earn up to 48% more.
Will I lose money if I don’t delay my benefits?
Not necessarily, but you’ll receive a lower monthly payout for life compared to those who delay.
Can I automatically delay OAS and CPP?
You’ll need to opt out of auto-enrollment for OAS and manually apply to defer CPP past age 65.