Goodbye 65? Major CPP & OAS Changes In 2025 That Redefine Retirement In Canada

For many decades, the age of 65 has been considered the golden number for retirement in Canada. This was the age when most people stopped working and started receiving their Canada Pension Plan (CPP) and Old Age Security (OAS) payments. But by 2025, that idea is beginning to change.

Canadians are living longer, staying healthier, and working later in life. Because of this, the government is adjusting how retirement benefits work, making the system more flexible for people to choose when and how to retire.

The Canada Revenue Agency (CRA) and Employment and Social Development Canada (ESDC) are modernizing these programs to reflect today’s reality.

Why Age 65 May No Longer Be the “Normal” Retirement Age

In the 1950s, life expectancy was much lower, and retirees usually collected benefits for only about 10 years. Now, many Canadians live 20 to 30 years after retiring.

That’s a big change, and it means retirement funds need to last longer. To help with this, the government is giving more incentives for people to delay their CPP and OAS and receive higher payments later.

Major Changes to the Canada Pension Plan (CPP)

The CPP continues to be the foundation of retirement income for millions of Canadians. The 2025 reforms will reward those who choose to work longer and delay collecting their benefits.

1. Early Retirement at 60 (Reduced Payments)
   • You can still take CPP as early as 60, but you’ll get 0.6% less for every month before you turn 65.
   • That means a 36% lifetime reduction if you start at 60.
   • Example: If your regular CPP is $1,200 at 65, you’d get only $768 per month if you start at 60.
2. Delayed Retirement at 70 (Increased Payments)
   • Waiting longer pays off. If you delay until 70, your CPP rises by 0.7% per month after 65 — that’s up to a 42% increase.
   • Using the same example, waiting until 70 could raise your benefit to $1,704 per month.
3. CPP Enhancement Phase
   • The CPP enhancement program, started in 2019, continues in 2025.
   • Employees and employers will contribute slightly more, but this leads to up to 33% higher benefits for future retirees.

CPP Comparison Table

Retirement Age	Monthly Change	Approximate Benefit (Example)	Notes
60 years	-36%	$768	Lower lifetime benefit
65 years	Standard	$1,200	Normal retirement
70 years	+42%	$1,704	Much higher monthly benefit

Key Updates to the Old Age Security (OAS)

The OAS program, paid from tax revenue, is also being modernized to stay sustainable as more seniors retire.

1. Eligibility Age – The OAS age stays at 65 for now, but discussions continue about increasing it to 67 within the next decade.
2. Increased Payments for Seniors 75+ – Canadians aged 75 and older already get a 10% boost in their monthly OAS. This continues through 2025 to help with higher living and medical costs.
3. OAS Clawback – High-income seniors may see their OAS reduced if their income goes above $93,454 in 2025. Payments drop by 15 cents for every dollar over that amount.

OAS Payment Table (2025)

Age Group	Approximate Monthly Amount	Notes
65–74 years	Around $740	Standard OAS benefit
75+ years	Around $800	10% higher payment
Above $93,454 income	Reduced	Subject to clawback

The idea of retiring exactly at 65 is changing fast. The new CPP and OAS rules for 2025 give Canadians more control but also more responsibility.

Waiting longer can significantly boost your income in later life, while early retirement may mean smaller checks. The best approach is to plan carefully, know your financial needs, and choose a timeline that supports a stable, comfortable retirement.

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