Everything About Canada’s Retirement System and Pensions
- Murat Koçak
- 21 hours ago
- 11 min read
Canada is renowned as an attractive destination for retirees, thanks to its high quality of life, robust social safety net, and universal healthcare system. What should you know about retirement conditions in Canada, including the retirement age and the amount of pension benefits? In this guide, we will provide a comprehensive overview of retirement in Canada. We provide up-to-date information on all the topics you are curious about, from the requirements to retire in Canada to pension amounts, from government benefits like Old Age Security (OAS) to retirement rights for immigrants. We also provide a comprehensive overview of early retirement options in Canada, healthcare services for retirees, and the cost of living during retirement.
What Are the Requirements to Retire in Canada?
Age is the primary criterion for qualifying for retirement in Canada. One of the most frequently asked questions is, “What is the retirement age in Canada?” The general answer is 65. There is no mandatory retirement age in Canada; however, age 65 is considered the standard when it comes to eligibility for government-supported retirement income (such as OAS and the Canada Pension Plan). Most Canadians wind down their careers around this age but retiring earlier or later is certainly possible. The main conditions for benefiting from retirement rights in Canada include:
Age requirement: Being 65 years of age or older. (Those who wish to start receiving a pension from the Canada Pension Plan earlier can begin as early as age 60, albeit at a reduced amount.)
Residency in Canada: To qualify for OAS, you generally need to have lived in Canada for at least 10 years after age 18. (A full OAS pension requires 40 years of residency in Canada.)
Contributions: To receive income from the Canada Pension Plan (CPP), you must have worked and paid into the CPP during your working years. The more and longer you contribute, the higher your CPP retirement benefit will be.
Legal status: You do not need to be a Canadian citizen to qualify for pension benefits. Permanent Residents who live and work in Canada are entitled to the same retirement benefits as citizens.
Retirement timing in Canada is flexible: some people choose to continue working past 65 and delay retirement. Delaying the start of your pension can increase the monthly amount you eventually receive. For example, someone who postpones their OAS until age 70 will receive about 36% more per month than if they took it at 65.
How Much Is the Pension in Canada?
The amount of pension income you will receive in Canada depends on several factors. There are two main sources of public retirement income provided by the government: Old Age Security (OAS) and the Canada Pension Plan (CPP). The total pension you receive will depend on what you get from these two sources, plus any employer pension plans and personal savings you may have.
Old Age Security (OAS): This is a basic pension paid by the government to all eligible Canadian residents aged 65 or older. As of 2025, the maximum OAS payment is about CAD $740 per month for seniors aged 65–74, and this increases to roughly CAD $814 per month (a 10% boost) for those aged 75 and over. OAS amounts are adjusted quarterly for inflation. Note that there is a claw back for high-income seniors: for example, as of 2024, those with an annual income above roughly $90,000 must repay part of or the entire OAS pension through the tax system.
Canada Pension Plan (CPP): This is a contributory, earnings-related pension based on the contributions you made during your working life. The amount you receive from CPP is calculated based on your earnings and contributions over the years. As of 2025, the average CPP retirement pension for a new retiree at age 65 is about CAD $900 per month, whereas the maximum CPP benefit at 65 (for someone who paid in at the maximum level for their entire career) is around CAD $1,433 per month. You have the option to take CPP early at age 60 (at a reduced rate) or delay up to age 70 (which increases the benefit by roughly an 8% increase for each year of deferral).
Guaranteed Income Supplement (GIS): For low-income seniors, the government provides an additional non-taxable benefit on top of OAS. A single senior with no other income could receive up to approximately CAD $1,827 per month in 2025 by combining OAS and GIS. (The exact GIS amount varies based on marital status and other income.) To receive GIS, you must be eligible for OAS and have an income below a certain threshold, and you need to file your annual income taxes to maintain this benefit.
In summary, the answer to “How much is the Canadian pension?” varies from person to person. Those relying solely on basic government support may receive only a few hundred dollars per month, whereas individuals who contribute the maximum CPP and have personal savings or employer pensions can have a total retirement income of several thousand dollars per month. Many people plan to supplement their OAS and CPP with workplace pensions or private savings to achieve a comfortable retirement income.
Old Age Security (OAS) and Canada’s Retirement Income System
Old Age Security (OAS) is a non-contributory pension provided by the Canadian government to seniors aged 65 and older. Eligibility for OAS is based on residency in Canada (not on work history or contributions). To receive the full OAS pension, you generally need 40 years of residence in Canada after the age of 18. However, even with fewer years, you can still receive a prorated partial pension.
You can start receiving a partial OAS with as little as 10 years of residency in Canada after age 18. (Thanks to international agreements with certain countries, any shortfall in Canadian residency can sometimes be bridged by time contributed abroad; for instance, if you don’t have enough years living in Canada, periods of working in Türkiye can be counted as Canadian residence under the Canada-Turkey social security agreement.)
OAS is funded from general tax revenues and provides a basic income floor for all seniors, regardless of work history. As part of the OAS program, low-income seniors may receive the Guaranteed Income Supplement (GIS) in addition to their OAS pension. In addition, there are Allowance programs for 60–64-year-olds: one for the spouse or common-law partner of an OAS/GIS recipient, and one for survivors (widows/widowers) in that age group. These additional benefits aim to ensure that the most vulnerable elderly people have a minimum income.
Canada’s retirement income system generally rests on three main pillars:
Public income supports: Old Age Security (OAS) and related supplements like the GIS, which are based on residency and provide a basic safety net.
Social insurance plans: The Canada Pension Plan (CPP) and Quebec Pension Plan (QPP), which are compulsory contributory pension schemes that provide earnings-related benefits based on employment contributions.
Private pensions and savings: Employer-sponsored pension plans (e.g., company pension funds) and individual retirement savings (such as RRSPs and TFSAs) that provide additional income in retirement.
Retirement Rights for Immigrants
Immigrants to Canada can also fully benefit from the country’s retirement system. Permanent residents in Canada have the same retirement rights as Canadian citizens in terms of pension eligibility and healthcare. This means that if they work and contribute to Canada, they can accrue CPP benefits, and once they meet the residency requirements, they can qualify for OAS.
However, there are a few special considerations for immigrants regarding retirement:
Equal entitlements: Permanent resident immigrants are entitled to the same pension benefits and healthcare services as citizens. What matters is the length of time you’ve lived in Canada and the contributions you’ve made, not your citizenship status.
Partial OAS entitlement: An individual who immigrates to Canada later in life may not immediately qualify for OAS due to insufficient years of residency. After at least 10 years of living in Canada, they become eligible for a partial OAS pension. For example, someone who moved to Canada at the age of 60 would reach the 10-year residency mark at the age of 70 and could then apply for OAS.
Social security agreements: Thanks to agreements with countries like Turkey, immigrants can count certain periods of contribution or residence in their home country toward Canadian pension eligibility. If you don’t have enough CPP contributions in Canada, your years of work in Turkey can be considered as contributions to the CPP; similarly, if you lack sufficient Canadian residency for OAS, your insured years in Turkey can help you qualify. Under these agreements, it’s possible to qualify for benefits from both countries’ pension programs.
Receiving pensions abroad: You can receive your Canadian pension payments even if you live outside of Canada. CPP retirement benefits are payable worldwide, regardless of your country of residence. OAS benefits can also be paid outside Canada, but to continue receiving OAS indefinitely while abroad, you usually need at least 20 years of residence in Canada; otherwise, OAS payments stop after six months outside the country. (Under the social security agreement with Turkey, these conditions can be adjusted reciprocally.) A person retiring from Canada can continue to collect a Canadian pension while living in Turkey, for example, as long as they meet the conditions of the agreement. Conversely, an immigrant entitled to a Turkish pension can receive it while residing in Canada.
Is Early Retirement Possible in Canada?
Although 65 is the standard retirement age in Canada, it is certainly possible to leave the workforce and retire before reaching that age. Naturally, early retirement requires solid financial planning. The idea of achieving financial independence and retiring early – essentially retiring without having to continue working – has gained popularity in recent years (often associated with the FIRE movement: “Financial Independence, Retire Early”).
However, since government pension programs don’t pay out until a certain age, anyone aiming to stop working well before 65 will need to rely entirely on personal savings or passive income to support themselves. There are limited ways to access government retirement income early. You can choose to start your Canada Pension Plan (CPP) retirement benefit as early as age 60, but the amount will be about 36% lower than it would be at 65 (to account for the longer period of payment).
Old Age Security, on the other hand, cannot be claimed before the age of 65; the only exception is the Allowance program, which provides payments to certain individuals aged 60–64 (for example, low-income spouses of OAS recipients or survivors). This means that someone planning to retire at, say, 55 will need to fund their living expenses on their own savings or investments until government pensions kick in at 60 or 65. Another approach to early retirement is to gradually phase out of work.
Many Canadians in their early 60s opt to leave full-time work but continue in part-time or consulting roles, creating a semi-retirement period. By doing so, they enjoy a slower pace of work and more free time, while still earning some income until they reach the age for full pension benefits. In conclusion, early retirement in Canada is possible, but successfully retiring early typically requires substantial personal savings or alternative income, as well as a carefully planned approach (potentially including a gradual transition) to bridge the gap until pensions become available.
Healthcare Services for Retirees in Canada
Canada’s healthcare system is universal and publicly funded, meaning that all permanent residents of the country, including retirees, have access to basic medical services without direct cost. Healthcare for retirees in Canada is generally covered under provincial health insurance plans, which provide coverage for essential services, including visits to your family doctor, specialist care, and hospital stays. In other words, when you retire, you do not lose your health coverage; the public health insurance you had while working continues into retirement unchanged. That said, Canada’s public healthcare system does not cover everything.
For example, prescription drugs, dental care, eyeglasses, and services such as physiotherapy are often not covered under provincial health plans. Many provinces offer additional assistance programs for seniors over 65 (for instance, in Ontario, the provincial drug plan greatly subsidizes the cost of prescription medications for those 65+).
Apart from these, many retirees choose to purchase private health insurance plans to cover things that the government plan doesn’t, such as dental and vision care or enhanced medical services. Long-term care and elder care are also important considerations. Nursing homes and assisted living facilities in Canada are subsidized by provincial governments but usually are not entirely free and often have waiting lists. Depending on their health needs, retirees can access options like in-home nursing care, subsidized home support services, or assisted living arrangements. Both federal and provincial programs are in place to support the health and care needs of the senior population, so retirees can often benefit from services like home visits by nurses, physical therapy, or medical equipment loans if needed.
Cost of Living in Canada During Retirement
The cost of living in Canada during retirement can be high compared to many other countries, although it varies by region and lifestyle. Generally, Canada is an expensive place to live, particularly in its larger cities. Housing costs in major urban centers, such as Toronto and Vancouver, are among the highest in the world, which can be a significant expense for retirees. For example, in Toronto, the rent for a one-bedroom apartment has reached around CAD $2,000 per month as of 2025. While smaller cities or towns may offer a more affordable cost of living, one must still account for basics like heating (especially in Canada’s cold winters), groceries, and transportation in those areas as well. Retirees in Canada should carefully budget their expenses.
Government pension benefits (OAS plus an average CPP) will typically cover basic necessities, but they often won’t fully replace your previous working income. Financial experts suggest that to maintain a comfortable retirement lifestyle, you might need an annual income equivalent to about 70–80% of your pre-retirement salary. Reflecting the rising cost of living and longer life expectancies, many Canadians say they aim to save at least CAD $1 million for retirement.
When planning a retirement budget, be mindful of the following major expense categories:
● Housing: Rent or mortgage payments, property taxes, and home maintenance costs.
● Food and utilities: Grocery bills, household supplies, and monthly utilities (electricity, water, heating, phone, internet).
● Transportation: If you drive, consider the costs of fuel, insurance, and vehicle maintenance; if you use public transit, account for the monthly transit pass fees.
● Healthcare expenses: Prescription medications (those not covered by provincial plans), dental and vision care, any private health insurance premiums, and potential costs for home care or assisted living in later years.
● Leisure and hobbies: Entertainment, cultural events, hobbies, and travel plan you wish to pursue in retirement.
● Taxes: Keep in mind that most retirement income (OAS, CPP, RRSP withdrawals, etc.) is taxable. Be sure to factor in income tax when calculating your net retirement income.
On the plus side, seniors in Canada can take advantage of certain discounts and benefits. Many municipalities offer reduced transit fares for seniors, and some provinces provide rebates or credits (for example, on property taxes or utility bills) for older adults. Nonetheless, it’s crucial to create a realistic budget and leave room for unexpected expenses. Health-related costs and long-term care needs, in particular, are significant considerations that retirees should plan for as part of their financial safety net.
At C&C Canada Education, Visa and Immigration, we offer professional guidance to our students and families planning to start a new life in Canada, from retirement planning to navigating the immigration process. Our team stays up to date with Canada’s retirement system, visa and immigration procedures, and current regulations to provide you with the most appropriate strategies for your situation. Our goal is to ensure that each of our students and families approaches their journey to retirement in Canada with confidence, full understanding, and peace of mind.
If you are seeking expert assistance with retirement or immigration in Canada, please don't hesitate to contact C&C Canada Education, Visa, and Immigration to take advantage of our consultancy services.
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