That idea is starting to fade. The federal system has changed, giving seniors more options for when and how they retire, how they get their benefits, and how long they keep working.
In practice, it is no longer necessary to retire at 65. Instead, seniors now have two strong federal options: they can either wait to get certain pension benefits and get higher monthly payments, or they can start benefits earlier with different amounts while still working. These choices give you more control over your income planning at a time when the cost of living is still high and you get regular payments from established federal programs every month.
This in-depth guide goes over the two federal options, the rules for who can use them, how payments are made, how they affect income, and how seniors can choose the best one for them.
The Move Away From Required Retirement at 65
People in the past thought that 65 was the normal age to retire. A lot of companies based their retirement plans on it. It was the basis for government benefits. It was strengthened by social norms.
But Canada no longer makes workers retire at 65. Most policies that forced people to retire have been gotten rid of. People can keep working after that age if they want to, and the federal pension systems have changed to reflect this.
This change takes into account three facts:
- People in Canada are living longer.
- A lot of older people want to keep working, either full-time or part-time.
- There is no longer a single plan that works for everyone.
The federal government no longer forces everyone to retire at a certain age. Instead, it offers flexible benefit options that let people choose what works best for their financial and lifestyle goals.
The First Federal Choice: A Flexible Start Age for the Canada Pension Plan
When to start getting Canada Pension Plan payments is one of the most important choices seniors have to make.
People can start getting benefits from the Canada Pension Plan as early as age 60 or as late as age 70. 65 is still the standard reference age, but there are other options now.
Beginning CPP Early at 60
Your monthly payment will always be lower if you start CPP at age 60. The lower amount is because you will be getting payments for a longer time.
This choice might make sense if:
- You need money right away.
- You want to stop working altogether.
- Your health problems could cut short the number of years you expect to live in retirement.
- You want to know how much money you’ll have coming in every month right away.
But the cut is permanent, so the total amount you get each month will always be lower.
When to start CPP at 65
Age 65 is still the standard age for full CPP. If you start at 65, you’ll get the amount that was calculated based on your contribution history.
Many retirees see this as the best option because it gives them stability without making them wait too long.
Waiting until 70 to get CPP
If you wait until after age 65 to get CPP, your monthly payment goes up by one month for every month you wait, up to age 70.
This choice leads to much higher monthly payments for the rest of your life.
It might make sense to wait if:
- You keep working after 65.
- You have other ways to make money.
- You think you’ll live into your 80s or 90s.
- You want to be sure that you will get a bigger monthly payment later in life.
This flexibility is one of the two main federal choices that are changing how Canadians plan for retirement.
The Second Federal Choice: Being Able to Change Old Age Security
Another important part of Canada’s retirement system is Old Age Security. It now has some flexibility about when to start, just like CPP.
OAS can start at 65, but seniors can choose to wait up to five years to get it, which will raise their monthly amount.
At 65, you can take OAS.
If you start at 65, you get the regular monthly payment based on your eligibility and where you live.
Most of the time, eligibility includes:
- Being 65 years old or older.
- Being a legal resident or citizen of Canada.
- You must have lived in Canada for at least 10 years after turning 18 (with more requirements for full benefits).
Putting off OAS to get more money
Your payment goes up for every month you wait to get OAS after age 65, up to age 70.
This choice can greatly increase your monthly income later in retirement.
If you wait, it might be good for you if:
- You still have a job.
- You make more money than average and want to keep your OAS recovery tax exposure low.
- You want a bigger guaranteed payment later in life.
Flexible CPP and OAS timing are two new federal retirement options that are now available.
Payment Is Coming: Understanding Monthly Benefits That Keep Coming
There hasn’t been an announcement of a new universal retirement payout, but payments are coming in regularly through existing programs.
Right now, seniors get money from:
- Monthly payments from the Canada Pension Plan
- Monthly payments for Old Age Security
- Guaranteed Income Supplement for seniors with low incomes
- Provincial supplements when they apply
Most of the time, payment schedules are sent out once a month. For people who sign up for direct deposit, deposits go straight into their registered bank accounts.
The phrase “payment is coming” is often used to describe how regular these federal deposits are. Seniors who are eligible can expect to get monthly payments as long as they keep meeting the requirements.
How working after 65 changes benefits
A common myth is that seniors have to stop working at 65 in order to get federal benefits. That is no longer the case.
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Getting CPP and Working
You can still work and get CPP. If you are under 70 and still working, you can keep putting money into CPP. This can help you get more money in the future through something called post-retirement benefits.
Working While Getting OAS
You can get OAS and still work. But if you make more money, you may have to pay the OAS recovery tax, which is also called a clawback.
If your income goes over a certain amount each year, your OAS may go down.
This means that when you retire and when your benefits start are important planning choices.
Requirements for eligibility explained
Before deciding when to retire, it’s important to know what makes you eligible.
Who Can Get the Canada Pension Plan
To get CPP:
- You need to be at least 60 years old.
- During your working years, you must have made at least one valid CPP contribution.
The amount you get depends on:
- Total donations.
- Years of contributions.
- Average pay over the course of a career.
- Age when benefits start.
Who Can Get Old Age Security
To get OAS:
- You have to be at least 65 years old.
- You need to meet the residency requirements.
- You have to apply if you aren’t automatically enrolled.
To get full OAS, you usually need to have lived in Canada for 40 years after turning 18. People who have lived in the area for fewer years can make partial payments.
Guaranteed Income Supplement for Seniors with Low Incomes
The Guaranteed Income Supplement gives seniors with low incomes extra money each month on top of their OAS.
You can only get it if:
- Getting OAS.
- Having an income that is below certain levels.
- Filing yearly tax returns to check your income.
This supplement is based on income and is changed every year.
This payment is very important for many seniors’ stability.
Why being flexible is more important than ever
In the past few years, the cost of living has gone up a lot. The costs of housing, groceries, utilities, and healthcare have made it hard for people on fixed incomes.
Letting seniors pick when to start getting benefits lets them plan ahead.
For instance:
- Putting off CPP can lead to a bigger guaranteed income in the future.
- Starting benefits sooner can help with short-term needs.
- Working longer can help you save more money over your lifetime.
- You can find balance by combining part-time work with partial benefits.
There isn’t just one right answer. The best choice depends on your health, savings, family support, housing situation, and long-term financial goals.
Questions that seniors often ask
In Canada, do you have to retire at 65?
No. There is no federal law that says you have to retire at 65.
Will delaying benefits make payments go up?
Yes. You can get more money each month if you wait to get CPP and OAS.
Can I get benefits while I’m working?
Yes. Having a job doesn’t automatically disqualify you.
Are payments made automatically?
Some seniors are automatically signed up for OAS, but others need to apply. You have to apply for CPP.
What Seniors Should Do Now to Plan Ahead
Now is the time to look at your options if you are getting close to 60 to 65 years old.
Think about:
- Checking your history of CPP contributions.
- Figuring out if you can get OAS.
- Figuring out how much the monthly payments will be at different starting ages.
- If you can, talk to a financial planner.
- Making sure your tax returns are up to date.
- Checking that the information for direct deposit is correct.
Making small decisions about timing can have big effects on your income over time.
The Bigger Picture: Retirement Is Now Personal
The retirement system in Canada has changed from one that is based on a set age to one that is more flexible.
The federal government no longer tells everyone to retire at 65. Instead, they give people choices. Instead of following old expectations, seniors can set their own retirement timeline based on their own needs.
The two main federal options, flexible CPP timing and adjustable OAS start age, give seniors the power to shape their financial future.
Payments every month are coming from established federal programs. Age, where you live, and how much you’ve contributed all play a role in whether or not you qualify. Before making decisions that can’t be changed, it’s important to know what your options are.
