Best Age to Retire in Canada: 55, 65, or Never?

What’s the best age to retire in Canada? 

According to this survey, 46% of Canadians expect to retire between 60 and 70. 

6% of Canadians expect that they will never retire.

Stats Canada shows that the average retirement age of Canadians in 2019 was 64 years old.

My parents have both retired exactly in this age range, and it seems that our society is set up for people to retire around this time. 

But more people than ever are choosing to buck the trend and retire either earlier or later in life. 

I’ll go over several options, but first, let’s begin with the most common age range.  

Normal Retirement: Age 60 – 70

Most Canadians choose to retire in this age range, and it’s easy to see why. You can start taking your CPP Pension the earliest at age 60, but the longer you delay, the higher the payments you will receive. 

If you start your CPP at age 60, you’ll receive 36% less than if you start it at age 65. 

If you start your CPP payments at age 70, you’ll receive 42% more than if you start it at age 70. 

Government pensions will kick in during this time, such as your Canada Pension Plan (CPP) and Old Age Security (OAS) payments. 

This can be a significant income source for many Canadians, so many have no choice but to wait until this age.

There’s also a societal pressure to retire at this age. If most of your friends and colleagues are retiring in this age range, you might get lonely or bored if you decide to retire earlier or later. 

best age to retire in canada Infographic

Late Retirement – Age 70 and Older

According to Stats Canada, the number of Canadians retiring 70 and older has more than doubled in the last ten years, which is a staggering increase.

Here are some of the reasons more Canadians are choosing to retire later in life:

  1. No more mandatory retirement age of 65: In 2009, the government decided to get rid of this restriction, giving Canadians a choice to continue to work as long as they wanted to.
  2. People are living longer: With advancements in health care and the overall well-being of Canadians, we are living longer than ever. That means that more money will be needed in retirement, so more people choose to work longer. Two out of five Canadians who are 65 currently will live past the age of 90, which is a very long time to retire.  
  3. Some people enjoy their work: I know it sounds crazy, right! But yes, many people get bored during retirement or are passionate about their job, so decide to continue to work.
  4. Money: Probably the most obvious one is that you will earn more money when you work more. You’ll also maximize your retirement income payouts such as your Canada Pension Plan (CPP) and OAS. The fear of running out of money keeps many people working past the age of 70.
old people

Early Retirement – Between Age 50 – 64

Many Canadians dream about retiring early, as they start to get burned out from their work in their 40’s and 50’s. I’m sure that most people would choose to retire early if they had the means.

It requires a lot of discipline, and either being able to save a high percentage of your income each year and investing it wisely or to make a lot of money. 

While it’s easy to see the benefits of early retirement, such as more free time, less stress, and the ability to travel, there are also downsides to early retirement. 

Stress can be added if you didn’t save enough money, with a constant worry about not having enough to last. There’s also the chance you could get bored or lonely if nobody else you know is retired, which can harm your health.

If early retirement is your goal, think it through carefully, and make sure you have planned your finances out perfectly!

old couple on the beach

Super Early Retirement: Between Age 30 – 49

There’s a new movement called financial independence, retire early (FIRE), where many people are choosing to adopt a very focused and ambitious goal of retiring very early in their life, usually by saving a lot of money and investing in the stock market or Exchange-Traded Funds (ETFs).  

It requires a lot of discipline in your early years of life, with many starting to save in their 20’s or even as teens aggressively.

While there are many benefits of retiring early, there can be a lot of risks in planning for extremely early retirement. You’ll have to consider the huge sacrifices that will need to be made, and the unpredictability of life. 

There’s a lot that can happen in life that would throw your calculations off, and you may need to either start working again or abandon it altogether. You’ll also need to find other projects or things to find meaning and satisfaction from doing. 

Finding the Balance

There’s no right answer as to what is the best age to retire in Canada. It’s such a personal decision, and sometimes it’s not a choice of when you retire. You can get forced out by your company, or you might need the money so you can’t retire until later. 

The most important thing is finding a balance and making the decision that will ultimately make you the happiest. Maybe you enjoy your work and colleagues and want to continue past your 60s. 

Or maybe you want to retire early because you value your time with your grandchildren or spouse or quit the rat race to travel in an RV across the continent.

Whatever age you plan on retiring, try to time it the best that you can!

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Read about how he quit his 6-figure salary career to travel the world here.

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