Starting in 2025, Canada’s retirement system is undergoing one of its most significant updates in decades. Traditionally, age 65 has been the standard retirement milestone—the age at which Canadians could begin collecting Old Age Security (OAS) and Canada Pension Plan (CPP) benefits.
But with Canadians living longer, staying healthier, and often working beyond 65, the government has introduced a more flexible retirement model that rewards those who choose to delay their benefits. This change is set to transform the way millions of Canadians approach retirement planning.
The Big Changes Coming in 2025
The core update revolves around stronger financial incentives for delaying OAS and CPP benefits. While you can still begin at 65, the longer you wait (up to age 70), the higher your monthly income will be.
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Here’s the breakdown of the new rules:
| Program | Start Age | Monthly Increase if Delayed to 70 |
|---|---|---|
| CPP | 65 | Up to 42% higher monthly benefit |
| OAS | 65 | Up to 36% higher monthly benefit |
Additionally, seniors aged 75 and older will see an increase in OAS payments, ensuring that those in later stages of retirement have greater financial stability.
Why These Changes Are Being Made
Canada’s government recognizes that the population is aging, with many seniors living well into their 80s and 90s. The shift in retirement benefits is designed to:
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- Reflect longer life expectancy
- Encourage seniors to stay in the workforce longer if they are able
- Provide higher incomes later in life, when healthcare and living costs are typically higher
- Offer flexibility so individuals can tailor retirement to their health and financial needs
This new model aims to strike a balance between personal choice and financial sustainability for the retirement system.
How Delaying Retirement Boosts Your Income
The advantages of delaying retirement are striking. Let’s look at an example:
If you are eligible for about \$1,300 per month in CPP at age 65, choosing to wait until 70 could increase that benefit to \$1,900 or more per month. That’s an extra \$600 every month—for life.
The same principle applies to OAS. Starting at 65 may give you roughly \$615 per month, but delaying until 70 could mean \$835 or more.
Combined, these increases can dramatically improve long-term financial security.
A Closer Look at the Numbers
| Age | CPP Monthly Estimate | OAS Monthly Estimate |
|---|---|---|
| 65 | ~\$1,300 | ~\$615 |
| 70 | ~\$1,900+ | ~\$835+ |
For seniors who live well into their 80s or 90s, this difference adds up to tens of thousands of dollars over the course of retirement.
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Extra Support for Seniors Over 75
In addition to the changes at age 65 and 70, those who are 75 and older will benefit from OAS top-ups. This adjustment acknowledges the reality that older seniors often face higher medical costs, additional support needs, and reduced ability to earn supplemental income.
Strategy: Should You Delay or Not?
While the new incentives sound appealing, delaying retirement isn’t the best choice for everyone. Retirement is deeply personal, and several factors should guide your decision:
- Health: If poor health limits your ability to work or reduces your life expectancy, claiming earlier may make more sense.
- Employment situation: Some people may retire early due to layoffs, family responsibilities, or lack of job opportunities.
- Financial needs: If you require immediate income at 65, waiting may not be realistic.
- Lifestyle goals: Some choose early retirement to travel, enjoy leisure, or spend more time with family.
There’s no single “right” retirement age—only what works best for your circumstances.
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Planning Ahead for Retirement Success
With these changes, planning becomes even more crucial. Canadians are encouraged to:
- Review their CPP and OAS statements regularly.
- Use retirement income calculators to compare benefits at different start ages.
- Log into My Service Canada Account to see updated pension projections.
- Speak with a financial advisor to plan for different scenarios.
By understanding your options and modeling potential outcomes, you can make smarter, more informed decisions about when to retire.
Why This Update Matters
The 2025 changes are about flexibility and security. They reward Canadians who choose to delay, while still preserving access to benefits at 65 for those who need them sooner.
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With inflation, rising housing costs, and healthcare expenses putting pressure on retirees, higher benefits later in life may provide greater peace of mind.
Ultimately, the update is a step toward a modern retirement system that reflects changing demographics and the diverse realities of Canadian households.
FAQs
Q1: What is the standard retirement age in Canada after the 2025 changes?
Age 65 remains the standard age to collect OAS and CPP. However, delaying up to age 70 now offers significantly higher benefits.
Q2: How much more can I receive if I delay CPP to age 70?
You could receive up to 42% more per month compared to starting at age 65.
Q3: Will OAS benefits also increase if delayed?
Yes. Delaying OAS up to age 70 can boost your payments by as much as 36% monthly.
Q4: Do seniors over 75 get additional benefits?
Yes. Seniors aged 75 and over will see increased OAS payments as part of the 2025 enhancements.
Q5: Should everyone delay their retirement benefits?
Not necessarily. While delaying can maximize payments, health, financial needs, and personal goals should all factor into the decision.