Canada Retirement Age Could Rise to 67, What It Means for CPP, OAS, and Your Plans

As Canada moves through the second half of 2025, a long-running discussion is back at the center of national attention — the country’s retirement age and pension withdrawal rules.

Driven by demographic changes, rising living costs, and the strain on public pension programs, the conversation has sparked proposals that could shape when and how Canadians retire for decades to come. For millions of current and future retirees, the stakes could not be higher.

Why the Retirement Age Debate Is Back

Several powerful forces are pushing this issue to the forefront:

• Aging population – By 2030, more than 20% of Canadians will be aged 65 or older, putting pressure on the Canada Pension Plan (CPP) and Old Age Security (OAS).
• Longer life expectancy – Canadians are living longer, meaning they’re drawing benefits for more years than when the programs were originally designed.
• Rising cost of living – Seniors face escalating expenses for housing, food, utilities, and healthcare.
• Pension program sustainability – With more retirees and fewer workers paying into the system, the long-term health of CPP and OAS is under scrutiny.

Economists and policymakers argue that without reforms, the balance between contributions and payouts could become unsustainable within a generation.

Proposals on the Table in 2025

While no changes have been finalized, governments at both the federal and provincial levels are studying a mix of adjustments aimed at modernizing retirement policies and easing financial strain on the system.

Policy Proposal	Current Status	Proposed Change	Impacted Group
Retirement Age	65	Gradual rise to 67 by 2030	All workers under age 60
Partial Pension Withdrawal	From age 60	Flexible with part-time work	Early retirees
CPP Contributions (High Earners)	Flat rate	Higher contribution rates	High-income earners
Pension Deferral Incentives	Optional bonus	Larger deferral rewards	Seniors delaying retirement
Tax Credits for Working Seniors	Limited access	Broadened eligibility	Workers 65 and older

These ideas aim to encourage longer working lives, reward those who delay retirement, and ensure that low- and moderate-income seniors still have strong financial support.

How These Changes Could Affect You

If the proposals move forward:

• Ages 60–64 – You may face a later full retirement age, but expanded partial pension withdrawal could allow you to supplement income while working part-time.
• Already retired – Your payments would not be reduced, but indexing or bonus structures could shift for future adjustments.
• Under 50 – You could see a full retirement age closer to 67, along with slightly higher CPP contributions during your working years.

Critics warn that physically demanding jobs, such as construction, manufacturing, and agriculture, may not allow workers to extend their careers comfortably. This has raised concerns about fairness, especially for lower-income Canadians.

Public Reaction: A Divided Nation

Reaction to the proposed changes has been mixed:

• Supporters – Many urban professionals and financial analysts support a gradual retirement age increase, seeing it as a way to strengthen the pension system and align with global trends.
• Opponents – Groups like the Canadian Association of Retired Persons (CARP) and labour unions argue that blanket increases in retirement age could unfairly impact those in physically demanding roles.

The political landscape is also split. Some parties are advocating aggressive reforms, while others oppose any delay in access to pensions, particularly for vulnerable seniors.

The Financial Planning Imperative

Regardless of the eventual outcome, experts say now is the time for Canadians to prepare for potential changes:

• Review your retirement income projections through your My Service Canada Account.
• Increase personal savings via RRSPs and TFSAs to create a cushion in case public pensions are delayed.
• Stay informed about legislative developments and policy updates.
• Consult a financial advisor if you are nearing retirement or revising your plans.

Even if reforms are phased in slowly, early preparation will give you more flexibility and control over your retirement timeline.

The Bigger Picture – Sustainability vs. Security

The challenge for policymakers is balancing financial sustainability of CPP and OAS with retirement security for Canadians. Raising the retirement age and adjusting contribution levels could extend the life of the programs, but without targeted protections, those changes could disproportionately affect workers in lower-income or high-strain occupations.

Given the mix of economic realities and political pressures, any final policy is likely to be a compromise — blending gradual retirement age increases with exemptions or enhanced benefits for those unable to work longer.

5 Relevant FAQs

1. Is the retirement age officially increasing in Canada?
Not yet. Proposals suggest raising it to 67 by 2030, but no law has been passed.

2. Can I still take CPP at 60?
Yes. You can begin CPP at 60, but payments will be reduced compared to starting at 65 or later.

3. Will current retirees be affected?
Current retirees are unlikely to see changes to their existing benefits.

4. Are there incentives to delay retirement?
Yes. Proposals include larger pension bonuses and expanded tax credits for seniors who work past the standard retirement age.

5. Who is opposed to raising the retirement age?
Groups like CARP, labour unions, and many blue-collar workers, especially in physically demanding jobs.