Canada retirement age: an A-to-Z guide on timing & benefits (2026)

Your retirement age in Canada can permanently change how much income you receive.

Start CPP at 60 and your payments are reduced by 36% for life. Delay until 70, and they increase by 42%. That single decision can mean thousands of dollars more—or less—every year in retirement.

There is no mandatory retirement age in Canada. Instead, you have flexibility in when you start CPP and OAS, and using that flexibility strategically is key to maximizing lifetime income.

In this guide, you'll discover:

• The truth about Canada's "official" retirement age and what it really means for your benefits
• How to potentially increase your CPP payments by up to 42% through strategic timing
• Practical strategies to determine your personal optimal retirement age based on your unique circumstances

For homeowners: one way some Canadians delay CPP without draining RRSPs is by using a portion of their home equity as a temporary income bridge. Providers like Lotly specialize in secured home loans that consider pensions, benefits, and non-traditional income — if that sounds like it might be the right fit for you, book a free consultation today.

TL;DR

• No mandatory retirement age in Canada. The standard age for full government benefits is 65, but you have the flexibility to start CPP as early as 60 or as late as 70.
• Early CPP comes with penalties. Starting at 60 means a permanent 36% reduction in monthly payments compared to waiting until 65.
• Delaying has rewards. Waiting until 70 increases your CPP by 42% and OAS by 36% compared to starting at 65 — potentially thousands more annually for life.
• Strategic timing matters. Your health, finances, and life expectancy should guide your decision more than the "standard" retirement age.

What is the official retirement age in Canada?

Canada doesn't have a mandatory retirement age where you're forced to stop working. What most people call the "retirement age" is actually the standard age for receiving full government pension benefits: 65.

This standard age serves as an important reference point in Canada's retirement system, but it's not a requirement. Many Canadians continue working well past 65, while others retire earlier. The flexibility in Canada's system allows you to make retirement decisions based on your personal circumstances rather than an arbitrary deadline.

When planning your retirement, it's important to understand that:

• You can legally work as long as you want (age discrimination in employment is prohibited)
• Government benefits have specific age eligibility requirements, but offer flexibility
• The average actual retirement age in Canada hovers around 65, though this varies widely by profession and personal circumstances
• Your retirement timing should be based on financial readiness, health considerations, and personal goals—not just reaching a certain age

Understanding CPP retirement age options

The Canada Pension Plan (CPP) forms a cornerstone of retirement income for most Canadians. One of its most valuable features is the flexibility it offers in terms of when you can start receiving benefits. This flexibility comes with significant financial implications that can affect your income for decades.

Standard CPP retirement age (65)

Age 65 is considered the standard age for collecting CPP retirement benefits. If you start your CPP at 65, you'll receive your base pension amount without any reductions or increases.

For 2026, the maximum monthly CPP retirement benefit at age 65 is $1,507.65. However, most people don't receive the maximum amount. Your actual benefit depends on:

• How much you contributed to CPP during your working years
• How long you contributed
• Your average earnings throughout your career

To qualify for CPP, you must:

• Be at least 59 years old (to apply for benefits starting at 60)
• Have made at least one valid contribution to the CPP

Early CPP retirement (ages 60-64)

You can start receiving your CPP retirement pension as early as age 60, but this comes with a permanent reduction in your monthly payment. For each month you take CPP before age 65, your benefit is reduced by 0.6%.

This means:

• Starting at 64 = 7.2% reduction (12 months × 0.6%)
• Starting at 63 = 14.4% reduction (24 months × 0.6%)
• Starting at 62 = 21.6% reduction (36 months × 0.6%)
• Starting at 61 = 28.8% reduction (48 months × 0.6%)
• Starting at 60 = 36% reduction (60 months × 0.6%)

For example, if your CPP benefit would be $1,000 per month at age 65, starting at age 60 would reduce it to $640 per month—for life.

Who might benefit from taking CPP early:

• Those with shorter life expectancy due to health concerns
• People who need immediate income and have limited other resources
• Those who plan to continue working but need additional income
• Individuals who want to preserve other retirement savings for later years

Delayed CPP retirement (ages 66-70)

Just as taking CPP early reduces your benefit, delaying it past age 65 increases it. For each month you delay starting your CPP after age 65, your benefit increases by 0.7%.

This means:

• Starting at 66 = 8.4% increase (12 months × 0.7%)
• Starting at 67 = 16.8% increase (24 months × 0.7%)
• Starting at 68 = 25.2% increase (36 months × 0.7%)
• Starting at 69 = 33.6% increase (48 months × 0.7%)
• Starting at 70 = 42% increase (60 months × 0.7%)

Using our previous example, if your CPP benefit would be $1,000 per month at age 65, delaying until age 70 would increase it to $1,420 per month for the rest of your life.

Calculating the break-even point: The break-even point is when the total benefits received from delaying CPP equal what you would have received by taking it earlier. For most people, this occurs in their late 70s to early 80s. If you expect to live beyond your early 80s, delaying CPP often results in more lifetime income.

Pro Tip: Use the Service Canada CPP calculator to estimate your benefits at different starting ages based on your specific contribution history.

Old Age Security (OAS) Retirement Age

Old Age Security works differently from CPP and has its own age requirements and considerations. Unlike CPP, which is based on your contributions during your working years, OAS is a non-contributory program funded through general tax revenues.

Standard OAS Eligibility Age

The standard age to start receiving OAS benefits is 65. For January to March 2026, the maximum monthly OAS payment for those aged 65-74 is $745.47.

To qualify for full OAS benefits, you must:

• Be 65 years of age or older
• Be a Canadian citizen or legal resident
• Have resided in Canada for at least 10 years after turning 18
• If living outside Canada, have resided in Canada for at least 20 years after turning 18

If you've lived in Canada for less than 40 years after turning 18, you may receive a partial pension based on the number of years you've lived in Canada.

OAS is automatically enrolled for most eligible Canadians. If you receive a notification letter about OAS and do nothing, you'll be automatically enrolled. If you don't receive a letter, you should apply for OAS benefits.

Delayed OAS Options

Like CPP, you can choose to delay receiving your OAS pension by up to 5 years (until age 70). For each month you delay, your monthly payment increases by 0.6%, which works out to:

• 1 year delay = 7.2% increase
• 2 years delay = 14.4% increase
• 3 years delay = 21.6% increase
• 4 years delay = 28.8% increase
• 5 years delay = 36% increase

For example, if your OAS payment would be $745.47 at age 65, delaying until age 70 would increase it to approximately $1,013.83 per month.

Strategic considerations for delaying OAS:

• Higher guaranteed lifetime income
• Potential tax advantages (if current income would trigger OAS clawback)
• Better inflation protection (larger base amount for future indexing)
• Coordination with CPP and other income sources

OAS Clawback Thresholds

The OAS "clawback" (officially called the OAS Recovery Tax) reduces your OAS pension if your income exceeds certain thresholds. For 2026, the threshold is projected at approximately $95,323 (the exact figure is adjusted annually for inflation).

If your income exceeds this threshold:

• Your OAS benefit is reduced by 15 cents for every dollar of income above the threshold
• If your income is high enough, your entire OAS benefit can be clawed back

Strategies to minimize or avoid the clawback:

• Split pension income with a spouse
• Time RRSP/RRIF withdrawals strategically
• Use Tax-Free Savings Accounts (TFSAs) for retirement savings
• Consider delaying OAS if you're still working with high income

If high income is pushing you toward an OAS clawback today, some homeowners use home equity to smooth income across retirement years — keeping taxable income lower now while delaying CPP and OAS. Lotly works with retirees whose income mix includes pensions, benefits, or support payments that banks often overlook.

Guaranteed Income Supplement (GIS) Age Requirements

The Guaranteed Income Supplement provides additional financial support for low-income seniors in Canada. It's an important part of Canada's retirement income system, designed to ensure that seniors have a basic level of income regardless of their work history.

Key GIS eligibility requirements:

• You must be 65 years of age or older
• You must be receiving OAS
• Your income must be below certain thresholds
• You must reside in Canada

GIS is income-tested, meaning the amount you receive depends on your income (and your spouse's income if applicable). As your income increases, your GIS benefit decreases. For single seniors with very low income, the maximum monthly GIS benefit can be substantial, providing crucial financial support.

Important to note:

• Unlike OAS and CPP, GIS cannot be deferred beyond age 65
• You must apply for GIS (it's not automatically provided)
• GIS benefits are not taxable
• You need to renew your GIS annually by filing your income tax return

Strategic Retirement Age Planning for Canadians

Determining your ideal retirement timing requires careful consideration of various factors beyond just the standard retirement age. Here's how to develop a personalized approach to your retirement timing:

Assessing Your Health and Life Expectancy

Your health status and family history of longevity should significantly influence your retirement timing decisions:

• Current health conditions: Chronic health issues might favor earlier retirement and taking CPP/OAS sooner
• Family history: If your parents and grandparents lived into their 90s, delaying benefits could provide more lifetime income
• Lifestyle factors: Your diet, exercise habits, and stress levels all impact longevity

Pro Tip: For every major health condition you have, consider subtracting 2-3 years from the average Canadian life expectancy (about 82 years) when calculating your break-even point for pension benefits.

Evaluating Your Financial Readiness

Before deciding when to retire, assess your overall financial picture:

• Retirement savings: Calculate whether your RRSP, TFSA, and other investments can support your desired lifestyle
• Debt situation: Entering retirement debt-free provides more financial flexibility
• Expected expenses: Consider how your spending might change in retirement (some costs decrease, others increase)
• Income sources: List all potential income streams (pensions, investments, part-time work)

Financial readiness checklist:

• [ ] Retirement savings of at least 8-10 times your annual income
• [ ] Debt-to-income ratio below 30%
• [ ] Emergency fund covering 6-12 months of expenses
• [ ] Clear understanding of expected retirement expenses
• [ ] Diversified income sources beyond government benefits

Analyzing the Impact of Continued Work

Working longer—even part-time—can significantly improve your retirement finances:

• Additional savings: More time to contribute to retirement accounts
• Delayed withdrawals: Allowing investments more time to grow
• Higher CPP benefits: More contribution years and potential for post-retirement benefits
• Social and mental benefits: Maintaining purpose, structure, and social connections

Consider whether transitioning to part-time work or consulting in your field could provide both income and lifestyle benefits before fully retiring.

Coordinating Benefits with Your Spouse

For couples, retirement timing should be a coordinated decision:

• Age difference: If there's a significant age gap, staggered retirement might make sense
• Income splitting: Strategic timing can maximize tax efficiency
• Survivor benefits: Consider how CPP survivor benefits work if one spouse passes away
• Health considerations: One spouse's health needs might influence both partners' retirement timing

Using Home Equity in Retirement Planning

For many Canadians, their home represents their largest asset. Strategically using this equity can provide additional financial flexibility in retirement, especially when coordinated with government benefit timing decisions.

Options for Accessing Home Equity in Retirement

Canadian homeowners approaching or in retirement have several ways to tap into their home equity:

• Downsizing: Selling your current home and moving to a less expensive property
• Secured home loans: Borrowing against your home equity while continuing to live in your home
• Reverse mortgages: Specific products designed for seniors that don't require monthly payments
• Home equity lines of credit (HELOCs): Flexible borrowing options against your home equity

How Secured Home Loans Can Provide Retirement Funding

Lotly's secured home loans offer Ontario homeowners aged 35-70 a flexible way to access their home equity without selling their property. Unlike traditional banks that often prefer applicants with T4 income, Lotly accepts diverse income types, including retirement pensions and government benefits. This makes their secured home loans accessible to retirees who may not qualify through conventional lenders.

Ways retirees can strategically use secured home loans:

• Bridge the gap before government benefits: If you want to retire before age 65 but delay CPP and OAS to maximize benefits, a secured home loan can provide income during those gap years
• Fund home modifications for aging in place: Make necessary renovations like installing a walk-in shower, stair lift, or main floor bedroom
• Consolidate high-interest debt: Replace multiple payments with one lower-interest payment, improving monthly cash flow
• Create an emergency fund: Establish a financial safety net for unexpected expenses like medical costs not covered by provincial health plans

Using Home Equity for Debt Consolidation in Retirement

Entering retirement with high-interest debt can significantly reduce your financial flexibility and quality of life. Secured home loans can help seniors consolidate multiple debts into one manageable payment, often at a lower interest rate.

For example, a retired homeowner with $30,000 in credit card debt at 19.99% interest might be paying over $500 per month in interest alone. By consolidating this debt with a secured home loan at a lower rate, they could potentially:

• Reduce their monthly payment
• Pay off the debt faster
• Free up cash flow for essential expenses
• Reduce financial stress

Pro Tip: Before using home equity to consolidate debt, create a clear budget and spending plan to avoid accumulating new debt after consolidation.

Funding Home Modifications for Aging in Place

Many seniors prefer to remain in their own homes as they age rather than moving to retirement communities or assisted living facilities. However, most homes weren't designed with aging in mind and may require modifications to remain safe and comfortable.

Secured home loans can provide the funding needed for these modifications, which might include:

• Installing grab bars and handrails
• Creating a main-floor bedroom and bathroom
• Widening doorways for potential wheelchair access
• Improving lighting throughout the home
• Adding a stair lift or ramp

These modifications not only improve safety and comfort but also extend the time you can live independently in your home, potentially saving significant money compared to assisted living costs.

Considerations Before Tapping Into Home Equity

While home equity can be a valuable resource in retirement, it's important to consider:

• Impact on inheritance: Using home equity reduces the asset value that may be passed to heirs
• Long-term financial implications: Ensure the loan terms are sustainable throughout retirement
• Alternative options: Explore whether government programs, grants, or other financial products might better meet your needs
• Exit strategy: Understand what happens if you need to move or sell your home

Before applying for a secured home loan, ask yourself:

• How will this affect my monthly budget?
• Do I have a plan for using the funds effectively?
• Have I compared different options for accessing equity?
• Does this decision align with my overall retirement plan?

Ready to Make Your Retirement Age Work for You? Lotly Can Help

Determining your optimal retirement age isn't just about following standard guidelines—it's about creating a personalized strategy that maximizes your financial security and quality of life. With the right approach to timing your retirement and accessing your resources, you can create the retirement lifestyle you've worked so hard to achieve.

Key takeaways to remember:

• Retirement age flexibility is your advantage. Canada's system allows you to choose when to start benefits—use this flexibility strategically based on your unique situation.
• Early retirement requires careful planning. If you want to retire before 65, ensure you have sufficient income sources to bridge the gap and consider how early CPP will affect your lifetime benefits.
• Delaying benefits can significantly increase your retirement income. For those with good health and longevity expectations, waiting until 70 to start CPP and OAS can provide substantially higher monthly payments for life.
• Your home equity can be a powerful retirement tool. With options like Lotly's secured home loans, Ontario homeowners can access their equity to consolidate debt, fund home modifications, or bridge income gaps while delaying government benefits.

P.S. If you're looking to make your home equity work harder for your retirement plan, Lotly makes it simple. Our secured home loans are designed with flexibility for retirees and those approaching retirement, accepting all types of income, including pensions and government benefits. Book a free consultation to get started today.

FAQs About Canada's Retirement Age

Can I collect CPP while still working?

Yes, you can collect CPP while continuing to work. If you're under 65 and decide to start your CPP early while still working, you must continue making CPP contributions, which will increase your benefit through the Post-Retirement Benefit (PRB).

If you're between 65 and 70 and working while receiving CPP, contributions are optional. If you choose to contribute, both you and your employer will need to make contributions, which will increase your CPP through the PRB.

Each year of contributions after you start receiving CPP adds a small amount to your monthly payment, beginning the following year. For 2026, the maximum monthly PRB is $50.92.

Tax implications: CPP benefits are taxable income. If you're working and collecting CPP, your total income will be higher, potentially pushing you into a higher tax bracket. Consider whether it makes sense to delay CPP until you've fully retired to manage your tax burden more effectively.

What happens if I retire before age 60?

If you retire before age 60, you'll need to bridge the gap until you're eligible to start receiving CPP. Here are some strategies to consider:

Bridge strategies until CPP eligibility:

• Draw from your RRSP or TFSA
• Use non-registered investments
• Consider part-time or consulting work
• Use a secured home loan to provide income during gap years

Early retirement planning considerations:

• Calculate your expected expenses during the gap years
• Determine how much you'll need to withdraw from savings
• Consider the impact of early withdrawals on long-term retirement security
• Explore whether you qualify for any other benefits or pensions

Alternative income sources before pension eligibility:

• Employer pension plans (many allow early retirement options)
• Rental income from investment properties
• Dividends from investments
• Part-time or seasonal employment

Pro Tip: If you're planning to retire before 60, aim to have at least 5 years of expenses covered through accessible savings or guaranteed income sources before tapping into long-term retirement funds.

How do provincial pension plans interact with CPP?

Most provinces coordinate their benefits with the federal CPP system, with Quebec being the notable exception:

Quebec Pension Plan (QPP):

• Operates separately from CPP but provides similar benefits
• If you've contributed to both CPP and QPP, you'll receive benefits from both plans
• Application processes and some specific rules differ from CPP

Other provincial retirement benefits:

• Many provinces offer supplementary benefits for low-income seniors
• Some provinces provide prescription drug coverage for seniors
• Property tax deferral programs are available for seniors in several provinces

Coordination of benefits across programs:

• Provincial benefits often have different eligibility criteria than federal programs
• Some provincial benefits are reduced if you receive certain federal benefits
• Tax implications vary by province

It's important to research the specific benefits available in your province of residence, as these can significantly impact your retirement income planning.

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