Retirement is an exciting milestone that allows you to embark on the next stage of life, which is filled with possibilities. After a lifetime of work, retirees get to enjoy their golden years by pursuing hobbies, travelling, and spending time with loved ones.
However, deciding when to make that transition is an important financial and lifestyle decision that involves many factors.
Read this guide to explore the latest data on average retirement ages in Canada and make informed choices to ensure your retirement is secure and fulfilling.
What is the Retirement Age in Canada?
Unlike some countries, Canada does not have a mandatory retirement age. Prior to 2009, the standard retirement age was 65, which aligned with eligibility ages for the Canada Pension Plan (CPP) and Old Age Security (OAS) pension. However, legislative changes have given Canadians the freedom to work for as long as they wish without any imposed age limit.
Some exceptions do exist for occupations like firefighters, pilots, and police officers that have mandated retirement ages for safety reasons. However, most Canadians can now choose when they want to transition out of the workforce.
Age 65 is important for retirement planning since that is when CPP and OAS benefits reach their maximum amounts. Canadians can access CPP as early as 60 or defer it as late as 70. OAS cannot start before the age of 65.
When Do Most Canadians Retire on Average?
According to the most recent data from Statistics Canada, the average retirement age in Canada is 65.3 for all genders. This represents the eligibility age for full Canada Pension Plan (CPP) and Old Age Security (OAS) benefits.
However, not everyone shares the same retirement timeline. When we break it down further, some interesting trends emerge:
Average Retirement Age by Gender
Women tend to retire earlier. An analysis of retirement data by gender reveals some notable differences between men and women:
| Gender | Average Retirement Age (2024) |
|---|---|
| Women | 64.4 years old |
| Men | 66.3 years old |
This gap of approximately two years has been consistent in the data over recent decades. The lower retirement age in women is often attributed to several socioeconomic factors, including time taken for caregiving responsibilities, the persistent gender pay gap affecting overall retirement savings, and differences in average life expectancy.
Average Retirement Age by Occupation
Occupation is another strong determinant of retirement age in Canada.
| Occupation | Average Retirement Age (2024) |
|---|---|
| Self-Employed Workers | 68.9 years old |
| Public Sector Employees | 63.3 years old |
| Private Sector Employees | 65.4 years old |
Self-employed individuals often retire later due to the lack of employer-sponsored pension plans and the financial need to work longer. In contrast, public sector employees, who frequently have defined-benefit pension plans, tend to retire earlier.
Source: Statistics Canada. Table 14-10-0060-01 Retirement age by class of worker, annual
Retirement Age in Canada By Province
The average retirement age across most provinces aligns with the national averages, between 60 and 70 years old.
| Province | Typical Retirement Age Range |
| British Columbia | 55-65 |
| Alberta | 55-70 |
| Saskatchewan | 60-70 |
| Manitoba | 55-65 |
| Ontario | 65 |
| Quebec | 60-70 |
| Nova Scotia | 55-65 |
| New Brunswick | 55-65 |
| Newfoundland and Labrador | 55, 65 |
| Prince Edward Island | 60-70 |
| Yukon | 65 |
| Northwest Territories | 55-70 |
| Nunavut | 55-70 |
While there is no official retirement age for each province, data reveal distinct regional patterns in when Canadians tend to exit the workforce. Instead of relying solely on a simple average age, a more accurate understanding can be obtained by examining the labour force participation rates for older workers, as reported by Statistics Canada.
The labour force participation rate shows the percentage of the population in a specific age group that is either working or actively looking for work.
A lower participation rate among the 55 and over age group in a particular province suggests a trend towards earlier retirement compared to provinces where the rate is higher.
Latest statistics indicate a stronger tendency for Canadians in Western provinces to work later in life, while those in Atlantic Canada are more likely to retire earlier.
However, early retirement is more common in Eastern Canada, while later retirement is seen out West.
Retirement Age Trends Over the Decades
Looking back reveals some interesting shifts in retirement patterns over recent decades in Canada:
| Time Period | Average Retirement Age |
| Late 1970s | 65 years old |
| Mid 1990s | 62.5 years old |
| Early 2020s | 65 years old |
This pattern can be attributed to factors such as:
- Increased life expectancies over the decades
- A shift away from defined benefit pension plans
- Stock market performance influencing retirement assets
- Changing economic conditions are impacting individual savings
Source: Statistics Canada. Fact-sheet on retirement
What are the Main Sources of Retirement Income for Canadians?
Canadians draw retirement income from various public and private sources. When planning your retirement timeline, it is crucial to understand the eligibility rules for pensions and savings programs.
| Plan | Features |
|---|---|
| Canada Pension Plan (CPP) | A consistent, taxable monthly benefit based on your contribution history over your working career. You can take a reduced pension as early as age 60 or an increased pension as late as age 70 |
| Old Age Security (OAS) | A taxable monthly benefit available to all Canadians aged 65 or older who meet residency requirements. This income is taxable and may be “clawed back” if your annual income exceeds a certain threshold. |
| Employer pensions plan | These can be Defined Benefit (DB) plans, which promise a specific lifetime income, or Defined Contribution (DC) plans, where the outcome depends on investment returns. |
| Guaranteed Income Supplement (GIS) | A monthly, non-taxable benefit for low-income seniors already receiving OAS. Eligibility and payment levels depend on marital status and the previous year’s income. |
| Tax-Free Savings Accounts (TFSA) | Contributions are made with after-tax dollars, but all investment growth and withdrawals are completely tax-free, making it a powerful tool for flexible retirement income. |
| Registered Retirement Savings Plans (RRSPs) | A tax-deferred savings account. Contributions are tax-deductible, and investments grow tax-free until withdrawal, at which point they are taxed as income. |
| Non-registered personal investment accounts | While investment income and capital gains are subject to taxation, these accounts allow you full flexibility to access funds anytime in retirement. |
Knowing where your retirement income will come from is a great start, but it’s just as important to figure out how much money you’ll need to retire comfortably in Canada. After all, having multiple income sources doesn’t mean much if they don’t cover your lifestyle and expenses.
How to Decide on Your Ideal Retirement Age
Determining your perfect retirement age involves assessing numerous factors. Use these steps as a guide:
Create a detailed retirement budget: Go beyond basic needs. Include travel, hobbies, healthcare costs, and inflation. This will determine your target annual income.
Assess your finances: Use government calculators and work with a financial advisor to project your income from all sources (CPP, OAS, pensions, investments) at different retirement ages. Then, compare it with your budgeted expenses. Is there a shortfall? If so, you may need to save more, work longer, or adjust your lifestyle expectations.
Consider your health: Are you in good health and enjoy your work? Canadians in good health may feel energized to extend their careers, while retiring early may be a priority to those in poor health. Be realistic about your health levels.
Evaluate your career: Are you eager to leave your job, or could you see yourself working longer? Canadians who gain fulfillment from jobs are more likely to delay retirement.
Visualize your retirement lifestyle: Does freedom at 60 outweigh the financial benefits of waiting until 65 or 70? Picture your ideal retired life. Eagerness to pursue retirement dreams, like travel, impacts timelines.
Discuss plans with your partner: Couples should communicate their thoughts on retirement timelines. It helps to have shared visions.
Defining one “perfect” retirement age is impossiblle, however, you can decide on the optimal retirement age for yourself with careful self-reflection and expert help.
Essential Tips for Preparing Financially for Your Retirement
Achieving retirement readiness takes diligent financial planning. Use these tips to help fund your ideal retirement lifestyle:
- Start saving early – Take full advantage of compound growth by setting aside retirement funds as early as possible. Consistently contribute to RRSPs and other accounts over your working life.
- Maximize workplace pensions – Make the most of employer matching and contribution programs. Understand your plan provisions and benefits package.
- Develop retirement income streams – Have multiple sources like CPP, OAS, RRSPs, rental properties, etc. This creates a diversified income base.
- Consider phased retirement – Gradually reducing your workload over a few years helps transition into full retirement. Partial income cushions the change.
- Seek professional advice – A certified financial planner can provide a comprehensive analysis, stress-test your plan against different scenarios (market downturns, health crises), and help you build a tax-efficient withdrawal strategy.
The bottom line
While 65 is the traditional retirement benchmark in Canada, your perfect retirement age depends on your unique situation. With careful planning and factoring in available retirement benefits, you can confidently make the transition into your next exciting life stage.
FAQs Related to Retirement Age in Canada
What is the standard retirement age in Canada?
The standard retirement age is 65, which is when Canadians can start collecting full Canada Pension Plan (CPP) benefits and Old Age Security (OAS) pension. However, Canadians can choose to retire earlier or later based on their personal situations.
How does retiring early affect my CPP payments?
If you start your CPP payments as early as 60, your monthly amount will be reduced by up to 36%. The reduction is 7.2% for each year prior to age 65.
Can I work past age 65 in Canada?
Yes, most Canadians can continue working past the age of 65 with no mandatory retirement age. Work can continue for as long as you are able and willing.
What is the average retirement age for women in Canada?
The average retirement age for Canadian women is approximately 64.2 years old. Women tend to retire a bit earlier than men on average.
Does marital status affect Old Age Security (OAS) payments?
Yes, your marital status and your spouse's income (if applicable) impact your OAS payment amounts. Married or common-law seniors receive less than single, divorced, or widowed seniors.
What are the eligibility requirements for Guaranteed Income Supplement (GIS)?
To receive GIS, you must be aged 65+, receive OAS, and meet low-income criteria. GIS provides added monthly income to low-income seniors.
Does retirement age vary across Canada?
Yes, average retirement ages range from 55-70 across the provinces. Early retirement is more common in Eastern Canada.
How will rising life expectancy impact retirement?
Longer life spans will likely increase the average retirement age in Canada. More seniors may also opt for phased retirement given the longer retirement time horizon.
