For decades, age 65 was the automatic “go-time” for retirement in Canada. Yet in 2025, the retirement landscape has changed with the Old Age Security (OAS) and Canada Pension Plan (CPP) offering varied start ages, incentives to delay, and income-based adjustments.
In short: 65 is no longer a fixed rule. Understanding your options can mean a much stronger financial future.
What’s New with OAS & CPP in 2025
The big shift in start age and benefit levels
- CPP can start between ages 60 and 70 (rather than simply at 65). Choose age 60 and your pension is reduced; delay to age 70 and you get more.
- OAS still starts at 65 by default, but you can defer it up to age 70 — and get a higher monthly payment.
- Both have maximum monthly amounts and income-based recovery (clawback) thresholds.
- Updated figures for 2025 give clearer context on what you could receive.
Key Figures for Late 2025
Table: What to Know for OAS & CPP
| Program | Key feature | Latest figure or rule (2025) |
|---|---|---|
| CPP maximum monthly (age 65) | If you’ve contributed the maximum and start at 65 | Approximately $1,433/month |
| CPP average monthly (age 65) | For typical contributor starting at standard age | Roughly $848/month |
| CPP start age flexibility | Early vs delayed start | Start at 60 ⇒ up to ~-36% reduction; delay to 70 ⇒ up to ~+42% boost |
| OAS maximum (ages 65-74) | If income below threshold | $740.09/month |
| OAS maximum (age 75+) | If income below higher threshold | $814.10/month |
| OAS income threshold for full payment | “Net world income” limit for full OAS (ages 65-74) | Under $148,451 in 2024 for Oct–Dec 2025 monthly rate |
| OAS clawback threshold | Where recovery tax starts | Income above about $90,997 in 2024 for July 2025-June 2026 cycle |
| OAS deferral bonus | If you delay from 65 to up to 70 | +0.6 % per month of deferral — up to +36 % total |
Why Age 65 Doesn’t Fit Everyone Anymore
The decision matters for lifetime income
- Health, life expectancy & work plans: If you expect to live many more years and are healthy, delaying either CPP or OAS (or both) can increase your lifetime benefit.
- Need income earlier? Starting CPP at age 60 may give you cash sooner—but at a lower rate for life.
- High-income earners should watch the OAS clawback: If your income is high in the early retirement years, you may have part or all of your OAS recovered. Consider delaying or structuring your other income streams.
- Continued work after age 65: Working longer raises CPP contributions and may increase your eventual payout (if you haven’t yet started).
- Spouse/partner & household income matters: The combined household income affects things like OAS clawback and eligibility for extras such as GIS (Guaranteed Income Supplement).
How to Choose Your Start Age
A practical checklist
- Estimate your projected income needs and expenses at different ages (60, 65, 70).
- Check your CPP record of contributions—if you contributed at or above the maximum for many years, you may benefit more from waiting.
- Estimate your OAS income trajectory and whether your income will be above or below the clawback threshold in future years.
- Consider your health and retirement lifestyle—if you retire early and expect shorter retirement, starting sooner might make sense.
- Speak with a financial planner familiar with Canadian retirement income rules to model different scenarios.
The traditional belief of retiring at 65 and collecting full government pensions from that point no longer fits the modern retirement landscape in Canada.
With the flexibility to start the Canada Pension Plan as early as 60 or as late as 70 — and the option to defer Old Age Security up to age 70 for a higher payout — there is no “one-size-fits-all” solution.
The smart move in 2025 and beyond is to consider your personal situation (health, income, work plans, spouse/partner, tax implications) and plan deliberately rather than defaulting to age 65.
By doing so, you can maximise your lifetime income, reduce the risk of clawbacks, and make your retirement years financially stronger.
FAQs
Does the government force me to retire at 65?
No — there is no rule forcing retirement at age 65. What has changed is the flexibility in when you start CPP and OAS, and how that decision affects your benefit levels.
If I delay OAS until age 70, how much extra will I get?
Each month you delay beyond age 65 adds about 0.6% to your OAS monthly payment. Over five years (age 65 to 70) that can add up to about +36% higher monthly benefit.
What happens if my income is high—will I lose OAS?
You may not lose all of it, but if your “net world income” exceeds a certain threshold (for example about $90,997 in 2024 for the 2025 payment cycle) you start paying back part of your OAS (15% of the amount above the threshold) via the recovery tax.
