Canada’s Retirement Age Could Rise to 67, How Seniors and Workers May Be Affected

Talks about raising Canada’s retirement age are gaining momentum again. As of August 29, 2025, no official law has changed, but several influential policy groups are urging the federal government to consider moving the “normal” retirement age from 65 to 67.

The argument is simple: Canadians are living longer, and the population of seniors is growing faster than the number of working-age contributors. Some experts say this demographic shift could strain Old Age Security (OAS) costs and put pressure on government finances.

For Canadians planning their retirement, understanding the rules in place today versus the proposals being discussed is critical.

What’s Being Discussed Right Now

Think-Tank Proposals

Major Canadian policy voices have recommended gradually increasing the retirement age to 67, calling it a necessary move to address labour shortages and demographic pressures.

Global Context

Canada is currently an outlier. Many OECD countries have already raised retirement ages or linked them to life expectancy. Moving to 67 would bring Canada closer to global peers.

Political Reality

The federal government has not announced any retirement age changes. In fact, a previous attempt to move OAS to 67 (under legislation in 2012) was reversed in 2016, restoring eligibility to 65. That reversal shows just how politically sensitive pension age is in Canada.

Current Rules in 2025: CPP and OAS at a Glance

Canada Pension Plan (CPP)

• Normal start age: 65.
• Start earlier (60–65): Reduction of 0.6% per month before 65 (up to -36% at age 60).
• Start later (65–70): Increase of 0.7% per month after 65 (up to +42% at age 70).
• Indexation: Adjusted annually for inflation.
• Maximum monthly benefit at 65 (2025): \$1,433.

CPP contributions in 2025:

• YMPE (Year’s Maximum Pensionable Earnings): \$71,300.
• YAMPE (Year’s Additional Maximum Pensionable Earnings): \$81,200.
• Rates: 5.95% base + 4.0% additional (doubled for self-employed).

Old Age Security (OAS)

• Eligibility age: 65 (cannot start earlier).
• Deferral option: Up to age 70, increasing payment by 0.6% per month (max +36%).
• Indexation: Adjusted quarterly to inflation.
• OAS amounts (July–September 2025):
• Age 65–74: up to \$734.95/month
• Age 75+: up to \$808.45/month (includes 10% boost for 75+).

OAS Recovery Tax (Clawback)

• Begins when net income exceeds \$93,454 (65–74).
• Full OAS eliminated around \$151,668 (65–74) or \$157,490 (75+).

Why Raising the Retirement Age Is Back on the Agenda

Demographics

Canada’s 65+ population is expanding quickly. Longer life expectancy and fewer births mean more retirees supported by fewer workers.

Sustainability Concerns

While CPP is considered sustainable under current rules, OAS spending is ballooning as baby boomers reach retirement. Some groups propose linking OAS age to life expectancy or tightening income targeting.

International Pressure

Countries like the U.S., U.K., and Germany have already adjusted retirement ages upward or tied them to longevity. Canada is under growing pressure to follow suit.

What Could Change if the Age Rises

CPP Implications

• Normal age shift: If the “baseline” age moves to 67, early starts may still be possible but with steeper penalties.
• Delayed start: Bonus percentages could shift to ages 67–72 instead of 65–70.
• More contribution years: Longer working lives could mean higher pensions for some workers.
• Bridging needs: Workers may need RRSPs, TFSAs, or employer pensions to cover the gap if they stop working before CPP kicks in.

OAS Implications

• Eligibility age: Could rise to 67, delaying GIS and Allowance benefits.
• Clawback math: Thresholds would likely remain, but applied at later ages.
• Deferral bonus: Still 0.6% per month, but starting later, shifting who benefits most from delaying.

Who Would Feel the Biggest Impact

Younger Canadians

Historically, such changes are phased in slowly and affect younger workers (40s–50s today). Current retirees and near-retirees are usually “grandfathered” under old rules.

Low-Income Seniors-to-Be

A later start to OAS/GIS could widen financial gaps in the mid-60s unless compensated with targeted programs.

Workers with Patchy Contributions

Those with career gaps or precarious work could find extra years less useful for boosting CPP, unless labour markets become more age-friendly.

Action Steps to Stay Prepared

Stress-Test Your Plan

Model retirement income with a 67 age benchmark for OAS and CPP. Identify potential “bridge years” funded by savings or part-time work.

Optimize CPP Timing

For now, CPP remains flexible. Consider delaying to 70 if you expect longevity and can afford to draw on other sources earlier.

Manage the OAS Clawback

If your projected income exceeds \$93,454 in your late 60s, plan withdrawals strategically—consider RRSP to RRIF timing, income splitting, or using TFSAs.

Monitor Indexation

Remember OAS adjusts quarterly and CPP annually. Rising inflation could add small but meaningful increases over time.

Track Contributions

Stay updated on YMPE and YAMPE. Consistent contributions improve future CPP benefits, especially under the CPP enhancement rules.

Quick Reference: Current Rules vs Possible Shift

Feature	Current Rule (2025)	Possible Future (If Raised)	What It Means
Normal retirement age	CPP 65, OAS 65	67	Later full benefit; longer saving window
Early start	CPP: 60–65 (up to -36%)	Still possible but larger cuts	Early exit becomes costlier
Deferral bonus	CPP: +0.7%/mo to 70; OAS: +0.6%/mo to 70	Same structure, later base	Incentives shift to higher ages
OAS clawback	\$93,454–\$151,668+	Likely unchanged	Same planning strategies apply
CPP max (2025)	\$1,433/month at 65	Same formula	Behavioural impact, not formula
Indexation	Annual (CPP), Quarterly (OAS)	Likely unchanged	Inflation link remains

FAQs

Q1: Has the retirement age in Canada officially changed?
No. As of August 2025, the eligibility ages remain 65 for OAS and the “normal” age for CPP.

Q2: Why are experts suggesting raising the age?
Because Canadians are living longer, and OAS costs are rising quickly as the senior population grows.

Q3: Will current retirees be affected if the age rises?
Unlikely. Historically, changes are phased in and mainly affect younger workers, not current retirees.

Q4: How can I prepare if the retirement age does increase?
Model your retirement plan with a later eligibility age, strengthen savings, and consider bridge strategies using RRSPs, TFSAs, or employer pensions.

Q5: What are the current maximum payments for 2025?

• CPP at 65: Up to \$1,433/month (depends on contributions).
• OAS 65–74: Up to \$734.95/month.
• OAS 75+: Up to \$808.45/month (with the 10% boost).