Your Financial Roadmap for Turning 65 in Canada
Reaching age 65 marks a new chapter, one where retirement benefits can become a critical part of your financial life. Canada's public pension system is designed to provide a secure income base for seniors. The two main federal pillars are the Old Age Security (OAS) pension and the Canada Pension Plan (CPP) retirement pension.
The Cornerstone of Canadian Retirement: OAS and CPP
Understanding the fundamental differences between the Old Age Security and Canada Pension Plan programs is the first step toward a well-planned retirement. While both are federal benefits, they differ significantly in their eligibility criteria and how they are funded.
Old Age Security (OAS)
OAS is a taxable monthly benefit for Canadians aged 65 and older [2]. Eligibility for OAS is primarily based on Canadian residency. To receive the full pension, you must have lived in Canada for at least 40 years after age 18. A partial pension may be available if you have lived in Canada for at least 10 years after age 18 [2].
Service Canada may automatically enrol you for OAS. If you don't receive notification by the month after you turn 64, you'll need to apply [2]. You can delay your OAS pension for up to 60 months (5 years) after turning 65, which increases your payment by 0.6% for each month delayed, up to a maximum of 36% at age 70 [2].
Canada Pension Plan (CPP) Retirement Pension
Most working Canadians contribute to the Canada Pension Plan [3]. The CPP retirement pension is an earnings-related benefit, meaning the amount you receive depends on your contributions [3]. You can start CPP as early as age 60, but this results in a permanently reduced pension [3].
The standard age to start CPP is 65, providing full benefits [3]. Taking CPP at age 60 results in a 0.6% reduction per month before age 65 (36% total reduction) [3]. Delaying CPP until age 70 increases your payment by 0.7% per month after age 65 (42% total increase) [3].
Supplementary Benefits and Other Financial Support
Additional support is available for low-income seniors to supplement the OAS pension [4, 5].
Guaranteed Income Supplement (GIS)
If you receive OAS and have a low income, you may be eligible for the GIS [4]. This is a non-taxable benefit that adds to your monthly OAS payment [4]. Eligibility and the amount depend on your income and marital status. Renewal is often automatic if you file your tax return on time [4].
The Allowance and Allowance for the Survivor
These non-taxable monthly benefits are for low-income individuals aged 60 to 64 [5]. The Allowance is for those with a spouse or common-law partner receiving the GIS [5]. The Allowance for the Survivor is for low-income individuals in this age range whose spouse or common-law partner has died [5].
Provincial and Territorial Benefits
Each province and territory offers benefits for seniors, which can include aid for housing, property tax relief, and healthcare subsidies [1]. It's important to research the specific programs in your area [1].
Important Steps and Considerations
As you approach 65, consider these steps:
- Check OAS Enrolment: Confirm automatic OAS enrolment with Service Canada. If not enrolled, apply about six months before you want benefits [2].
- Apply for CPP: CPP is not automatic; you must apply for your retirement pension [3].
- Explore Timing Options: Decide when to start your benefits based on your financial situation and income [2, 3].
- Complete Your Taxes: File your income tax return for potential automatic GIS renewal [4].
- Research Provincial Programs: Look into benefits offered by your province or territory [1].
Comparison of Key Federal Pensions
| Feature | Old Age Security (OAS) Pension [2] | Canada Pension Plan (CPP) Retirement Pension [3] |
|---|---|---|
| Type of Benefit | Universal, based on residency | Contributory, based on work history and contributions |
| Funded By | Federal government general tax revenues | Employee and employer contributions |
| Earliest Age to Start | Age 65 (can be delayed) | Age 60 (with a permanent reduction) |
| Standard Age to Start | Age 65 | Age 65 |
| Latest Age to Start | Age 70 | Age 70 (with a permanent increase) |
| For Quebec Residents | Same | Quebec Pension Plan (QPP) |
The Big Picture: Making the Right Choice
Turning 65 in Canada is a pivotal moment for retirement planning. Understanding your options allows you to make informed decisions for your financial well-being [1]. Proactive planning is key, whether you start benefits immediately, delay for a higher payment, or explore supplementary options [1, 2, 3, 4, 5].
For more information and to explore eligibility, visit the official government resource: Canada.ca Benefits Finder [1].
