As Canada’s population continues to age, statistics around retirement age have become increasingly significant. The age when Canadians can start claiming Old Age Security payments is 65 years of age, However, some Canadians hope to retire early, while others would be happy to continue working for longer.

In this article, we look at the statistics around retirement age including the average retirement age, the record number of Canadians nearing retirement, and what could entice Canadians to stay in working life for longer.

Retirement Age Statistics for Canadians

  • Over 20% of Canada’s working-age population is between 55 and 64 years of age.
  • Since 2009, it has no longer been mandatory to retire at 65 in Canada.
  • Canadian working-age persons made up nearly two-thirds of the total population in 2021.
  • The average retirement age in Canada is 64.6 years.
  • Canadians are now retiring, on average, 3.4 years later than in 2002.
  • The average retirement age for Canadian women is 63.6 years compared to 65.5 years for men.
  • Over 20% of Canadians aged 55-59 are in semi- or full-retirement.
  • 35% of men and 28% of women who are fully retired say finances are the main factor when deciding what age they can retire.
  • More than half of Canadians nearing retirement would consider part-time work.
  • You can increase the value of OAS and CPP payments if you defer them.
  • 6% of Canadians have no plans to retire at all because they enjoy working.

Over One-Fifth of the Canadian Working-Age Population is Over 55 Years of Age

The working-age population consists of persons aged between 15 and 64 years of age. In Canada, 21.8% of this population is aged 55 or over. This is a record number of Canadians who are nearing retirement age and is one of the reasons Canada is facing labour shortages in some industries.

The population aged 15-64 in Canada represents 64.8% of the population. This is a larger share of the total population than in the other G7 countries. Between 2016 and 2021 (the last two censuses in Canada), the number of Canadians aged 65 or older grew by 18.3% to 7 million. This increase followed a 20% increase between the censuses from 2011 and 2016.

In 2016, Canadians who were past the official retirement age represented 16.9% of the Canadian population. By 2021, their portion had grown to 19% of the total population. As large numbers of Canadians are retiring or nearing retirement older Canadians are also staying healthier and more active for longer.

Canada Had a Mandatory Retirement Age Until 2009

Since 2009, Canadians have been able to work past their retirement age if they choose to do so. While Canadians were able to retire early, before 2009 they could not continue working once they turned 65. Since the law was changed, mandatory retirement in Canada has been prohibited except for some rare professions such as commercial airline pilots.

The Number of People Retiring Will Decline After 2030

While Canada currently has a record number of people nearing retirement, this will change when the workers from the baby boom generation have all retired by 2030. When baby boomers have left the workforce, they will be replaced by Generation X, which is a less numerous generation.

As the baby boom cohort turns 65, the working-age population will form a smaller proportion of Canada’s population. In 2021, working-age Canadians made up 64.8% of the total population.

By 2051, the portion of working-age people in Canada could be below 60%, which will lead to further labour shortages that cannot be curbed even with a significant increase in immigration. Having more people stay in the workforce past the official retirement age would help reduce labour shortages.

The Average Canadian Retires Close to 65 Years of Age

Based on results from Statistics Canada, the average retirement age in Canada was 64.6 years in 2022, so close to the age when Canadians can start claiming Old Age Security payments.

However, there are differences between employment sectors. Canadians who are self-employed are most likely to work past the official retirement age. The average age of retirement for self-employed Canadians was 66 years in 2022. Public sector workers were the most likely to retire earlier, with an average retirement age of 62.7 years, while the average retirement age was 64.7 years among private sector employees.

Canadian Average Retirement Age Has Increased

The average age Canadians are retiring has increased over the years. In the past twenty years, the average retirement age increased by 3.4 years. The biggest increase has been in the retirement age among public sector workers where the average retirement age has increased by 4.1 years since 2002.

Women Have a Lower Average Retirement Age

Canadian women have a slightly lower average retirement age across all employment sectors than Canadian men. The average retirement age for women across all sectors is 63.6 compared to 65.5 for men.

Self-employed women in Canada retire on average when they are 67.3 years old, while self-employed men retire at 68.9 years of age on average. In the private sector, the average age is 64.4 for women and 65-0 for men; in the public sector, they are 62.0 among women and 63.7 among men.

Over One-Fifth of 55-59-year-old Canadians are at Least Partially Retired

While the retirement age is officially 65 years, many Canadians are taking early retirement if their finances allow that. In June 2023, 21.8% of Canadians aged between 55 and 59 were fully or partially retired. The portion of fully or semi-retired Canadians more than doubled among those aged between 60 and 64 for years of age, with 44.9% at least partially retired.

The portion of semi or fully retired almost doubled again for the 65-69 age group, with 80.5% no longer fully participating in the workforce. 90% of Canadians who had reached 70 years of age were either fully or partially retired.

Financial Situation is the Main Deciding Factor on When to Retire

Among Canadians who have retired completely, their financial situation had the biggest impact on the timing of their retirement. 35% of Canadian men and 28.2% of women said finances played a key part when planning when to retire.

Health was another key factor when deciding when to retire in Canada. Often this means that some Canadians have had to retire younger than they would have liked to. 22.8% of men and 22.9% of women had completely retired because of health issues or a disability. In some cases, the early retirement was because of a spouse’s health issues or disability.

People who have taken early retirement for health or disability reasons have a younger average retirement age than the overall average. For men, this is 58.5 years, and for women 56.9 years. People who reported financial situation as the main factor for their retirement had an average retirement age of 61.7 years for men and 60.1 years for women.

Over 50% of Older Canadians Would Consider Working Part-Time

Many Canadians who are nearing retirement age say they would consider part-time work. 55.1% of those who were planning to retire said they would work for longer if they could work part-time. 48.9% also said that they would carry on working if they could work fewer hours with no impact on their pension.

Other Canadians who were planning retirement said they would be happy to continue to work if they could do so in a different role. 43% would continue working if they could swap for a less physically demanding or stressful job, while 37.6% would stay if they could do something more interesting. 34.2% of older workers could be motivated to stay if their salary increased and 29.3% would carry on working if their health got better.

OAS and CPP Payments in Canada

Old Age Security (OAS) payments start when Canadians turn 65. However, it is possible to defer OAS payments until the age of 70. The Canada Pension Plan (CPP) allows Canadians to draw pension benefits from 60 years of age.

However, if you are planning to draw your CPP payments before you turn 65, you need to be aware that you lose 7.2% of its value. On the other hand, you can increase its value by 8.4% per year by deferring it. If you wait until you are 70 to draw CPP payments, it will be worth 42% more than drawing it when you are 65. Deferring OAS payments increases their value by 7.2% per year until you turn 70. There are no financial incentives for deferring after the age of 70.

What Is a Good Age to Retire in Canada?

The best age to retire in Canada depends entirely on each person’s situation. For many Canadians, the age they retire is largely dictated by when they can afford to retire. When you are working out a good age to retire, you need to take into account your pension benefits from the government, your employer pension, and any retirement savings you may have.

Retiring Before 60

While some people may receive a large inheritance that allows them to retire early, for most people early retirement requires a robust retirement plan, a high salary, and an excellent company pension. For many people, early retirement is only possible through saving a high percentage of their salary during their working life.

Retiring Between 60 and 70 Years of Age

Retiring in their 60s is typically both desirable and attainable for most Canadians and the majority of Canadians retire before their 70th birthday. Most people who retire in their 60s have a decent pension plan from their employer combined with decent savings and modest living expenses.

Retiring After 70

Some Canadians may not be financially able to retire before their 70th birthday. This may happen if a person has not saved enough for their retirement and worries they might outlive their savings. Over 50% of Canadians worry about their finances and the possibility of having to go back to work after official retirement.

However, some enjoy their jobs so much that they are not looking to retire early. Around 6% of Canadians have no plans to retire at all.

Conclusion

The average retirement age in Canada is 64.6 years, which is 3.4 years older than it was just over twenty years ago. The main reasons in Canada that impact people’s decision on when to retire are their finances and their health.

Canadians can start to claim their OAS payments at 65 but they can defer them if they choose to. Since 2009, there has been no mandatory retirement age in Canada. With large numbers nearing retirement, Canada is facing workforce shortages and employers may need to begin to consider more ways to entice older workers to stay on for longer.

Frequently Asked Questions

You can start claiming Old Age Security payments in Canada at 65 years old. However, you can start collecting your Canada Pension Plan payments when you are 60 years old. Anyone claiming younger should note that it will affect their retirement income.

It is not necessary to wait until you are 60 or 65 before you retire if you have enough income to cover all your expenses from a private retirement fund.

While the official retirement age is 65 in Canada, you do not have to stop working at that age if you prefer not to. Continuing to work can increase your pension and means you can enjoy a full income for longer.

The average retirement age in Canada is 64.6 years. However, people working in the public sector are more likely to retire younger, and self-employed Canadians older than the average.

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