Canada is moving toward a more flexible retirement era by reinforcing the end of mandatory retirement at 65 and introducing updates to CPP and OAS rules effective December 28.
These changes give seniors more control over when they retire, how long they work, and when they start their government pensions.
With rising life expectancy, higher living costs, and shifting work patterns, Canada now encourages seniors to choose the retirement age that fits their financial and personal needs.
Mandatory Retirement at 65 Is No Longer the Rule
While Canada phased out mandatory retirement across most provinces years ago, the government is now emphasizing stronger nationwide consistency heading into late 2025.
Here’s what it means:
- Employers cannot force workers to retire at 65 just because of age.
- Seniors can work past 65 or up to 70 and beyond if they choose.
- Only a few safety-sensitive professions (such as certain aviation or policing roles) maintain age-based limits.
This shift is part of a national effort to support an aging workforce, reduce age discrimination, and allow Canadians to keep working if they want or need to.
Flexible CPP Rules Beginning December 28
The Canada Pension Plan (CPP) already offers flexible start ages, but beginning December 28, widened flexibility and updated payment amounts provide clearer incentives for seniors to choose the most beneficial start date.
Key CPP Features in 2025
- Standard start age: 65
- Earliest start: 60 (with permanent reductions)
- Latest start: 70 (with permanent increases)
- Reduction for early start: About 0.6% per month before 65
- Increase for delayed start: About 0.7%–0.84% per month after 65
- Maximum monthly CPP in 2025: Around $1,433 for someone who contributed at the maximum each year
By December 28, CPP’s updated payment calculations and indexation reflect the latest inflation trends and growth in average wages, helping retirees maintain purchasing power.
Updated OAS Rules for Late 2025
Old Age Security (OAS) is also moving into a more flexible retirement framework. Payment updates and strengthened deferral benefits apply from December 28.
Key OAS Features
- Standard start age: 65
- Latest start: 70
- Deferral increase: 0.6% per month, up to 36% more at age 70
- Quarterly indexing: Benefit amounts adjust every January, April, July, and October
- Late-2025 OAS average monthly amount: Mid-$700 range for ages 65–74, and higher for those 75+ due to the additional age-75 increase
These changes help seniors combat inflation while giving them the choice to delay OAS for higher lifetime income.
CPP and OAS December 2025 Payment Schedule
Both CPP and OAS benefits for December 2025 will be deposited on:
• December 22, 2025
This earlier-than-usual date helps seniors receive funds before the holidays.
Retirement Flexibility- What It Means for You
Ending mandatory retirement at 65 and increasing flexibility in federal benefits together create major advantages:
1. More Control Over Income Planning
Workers can delay pensions to increase their monthly amounts or start them early if they need the cash flow.
2. Ability to Work Longer
Seniors can keep earning employment income without being forced out of the workforce.
3. Protection Against Inflation
Regular CPP and OAS inflation indexing ensures income grows to reflect cost-of-living changes.
4. Better Long-Term Security
Delaying benefits can significantly increase lifetime pension income for Canadians expecting a longer life span.
Quick Comparison
Feature: Benefit Type
• CPP: Contributory (based on work earnings)
• OAS: Residency-based
Feature: Start Age Options
• CPP: 60–70
• OAS: 65–70
Feature: Early/Late Adjustment
• CPP: -36% at age 60; +42% at age 70
• OAS: +36% at age 70
Feature: Maximum Monthly Amount (2025)
• CPP: Around $1,433
• OAS: Mid-$700 range for ages 65–74; higher for 75+
Feature: Indexation
• CPP: Adjusted yearly for inflation
• OAS: Adjusted quarterly based on CPI
Feature: December 2025 Pay Date
• CPP: December 22, 2025
• OAS: December 22, 2025
Feature: Mandatory Retirement
• CPP + OAS: No — age alone cannot force retirement in most Canadian jobs
Canada’s decision to strengthen the end of mandatory retirement at 65—combined with updated CPP and OAS flexibility effective December 28—marks a major shift in how Canadians approach retirement.
Seniors now have more freedom, higher potential benefits, and better protection against inflation.
With rising living costs and longer life expectancy, these changes give Canadians the power to decide when and how they retire, ensuring a more secure and personally tailored retirement future.
FAQs
Is retirement no longer mandatory at age 65 in Canada?
Yes. Mandatory retirement at 65 has been removed for most workers, and updated federal guidance reinforces that age alone cannot be used to force retirement.
What changes start on December 28?
December 28 marks updated CPP and OAS flexibility rules, refined payment amounts, and clearer federal guidelines supporting voluntary retirement.
Should I delay CPP or OAS to get more money?
Delaying benefits can significantly increase your monthly payments. However, the best option depends on your health, income needs, and financial goals.