What Is the Average Retirement Age in Canada?
Why federal employees retire 7 years earlier than self-employed Canadians—the retirement age gap that exposes Canada’s pension inequality crisis.
The average retirement age across Canada currently stands at 63.5 years, though this figure varies noticeably by employment sector and individual circumstances. Federal government employees retire earliest at approximately 61 years due to extensive pension programs, while private sector workers typically retire closer to 65 years, aligning with Canada Pension Plan eligibility. Self-employed Canadians work longest, averaging 68 years due to retirement savings challenges. Understanding these sector-specific patterns reveals important considerations for retirement planning strategies.
Across Canada’s diverse employment landscape, workers are retiring at an average age of 63.5 years, though this figure varies considerably depending on sector, gender, and individual circumstances that shape each person’s unique retirement journey. Federal government employees typically retire youngest at approximately 61 years, benefiting from comprehensive pension programs that enable earlier departure from the workforce, while private sector workers align more closely with the official retirement age of 65 years when Canada Pension Plan eligibility begins.
Canada’s retirement age averages 63.5 years, with federal employees retiring earliest at 61 and private sector workers closer to 65.
Self-employed Canadians face different retirement realities, working until an average age of 68 years due to greater financial planning responsibilities and the flexibility that comes with controlling their own work schedules. This later retirement age reflects both the challenges of building adequate retirement savings without employer-sponsored pension plans and the opportunity to gradually shift from full-time work rather than facing mandatory retirement policies.
Gender patterns reveal that women tend to retire approximately one year earlier than men across all employment sectors, influenced by factors including caregiving responsibilities, different career trajectories, and varying approaches to work-life balance during later career stages. Public sector employees generally retire around 63 years, taking advantage of defined benefit pension plans that provide financial security earlier than private sector alternatives. The official retirement age for men has remained unchanged at 65 years, maintaining consistency in pension eligibility requirements across the country.
The retirement landscape has changed significantly over the past two decades, with average retirement ages increasing from 61.5 years in 2003 to approximately 65 years in 2024. This upward trend reflects economic uncertainties, inflation pressures, increased life expectancy, and concerns about maintaining adequate retirement income throughout longer post-work periods.
Early retirement remains possible beginning at age 60, though retirees accepting Canada Pension Plan benefits before 65 face permanently reduced monthly payments that affect long-term financial security. Approximately 90% of Canadians inadequately factor lifestyle needs into retirement planning, creating potential income shortfalls that influence decisions about when to stop working. Financial experts recommend that retirees plan to replace 60-70% of pre-retirement income through a combination of government pensions, employer plans, and personal savings to maintain their standard of living. The Canada Pension Plan currently provides coverage for 6.3 million Canadians in 2023, representing a significant portion of the country’s workforce.
Economic factors increasingly drive retirement timing decisions, with 46% of pre-retirees reporting that rising living costs directly impact their planned retirement age, while government discussions continue regarding potentially raising the standard retirement age to 67 to ensure pension system sustainability for Canada’s aging population.
Frequently Asked Questions
Can I Access My Pension Benefits Before the Official Retirement Age?
Yes, one can access pension benefits before the official retirement age of 65 through several mechanisms. CPP benefits become available at age 60 with permanent monthly reductions of 0.6% per month before 65, totaling up to 36% reduction.
Employer pension plans often permit early access from age 55 with sufficient service years, though actuarial reductions typically apply, permanently decreasing monthly payments throughout retirement.
How Does Early Retirement Affect My Canada Pension Plan Benefits?
Early retirement substantially reduces Canada Pension Plan benefits through permanent monthly payment reductions of 0.6% per month before age 65, totaling 36% less income when claimed at age 60.
This reduction affects lifetime retirement income, potentially creating financial shortfalls that require increased personal savings or alternative income sources to maintain desired living standards throughout retirement years.
What Happens if I Continue Working Past Age 65?
Working past age 65 allows individuals to defer CPP benefits until age 70, increasing monthly payments by up to 42%, while OAS continues without reduction unless income exceeds $142,609.
Employment income supplements pension benefits, enhancing financial security and delaying savings withdrawals.
Many Canadians experience improved mental health through continued social engagement, though decisions depend on individual health, job demands, and retirement readiness considerations.
Do Government Employees Have Different Retirement Age Requirements Than Private Sector?
Government employees typically retire earlier than private sector workers, averaging age 63 compared to the general retirement age of 65.
Public sector workers benefit from defined benefit pension plans with early retirement options starting around ages 55-60, while private sector employees more commonly rely on defined contribution plans that incentivize working until 65 or later for adequate retirement savings.
How Much Money Do I Need Saved to Retire Comfortably?
Financial experts recommend accumulating seven to ten times one’s annual pre-retirement income to retire comfortably, targeting replacement of 60% to 80% of working income. This calculation incorporates government pensions like CPP and OAS, while factoring lifestyle expenses, healthcare costs, and inflation.
Individual requirements vary considerably based on retirement goals, longevity expectations, and withdrawal strategies.
What’s next?
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors. Full details of coverage, including limitations and exclusions that apply, are set out in the certificate of insurance provided on enrollment.
This article is meant to provide general information only. It’s not professional medical advice, or a substitute for that advice.
Saphira Financial Group does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.
