For many Canadians, retirement has long been visualized as a finish line — a specific date marked on a calendar when career ends and leisure begins. Yet, that narrative is evolving. Increasingly, people are choosing — or needing — to stay active in the workforce well beyond age 65. Whether by choice, financial necessity, or a desire to stay mentally and socially engaged, retirement no longer means “stopping work altogether.”
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Work Because You Want To, Not Because You Have To
Flexible Work Options for Older Canadians
Today, more employers are embracing age-diverse workplaces. Roles tailored to experienced professionals, phased retirement options, and flexible hours are becoming more common. For those who can’t scale back in their current job, a career pivot — even into self-employment — is worth exploring.
In fact, Statistics Canada reports that as of 2022, 41% of men and 27% of women aged 65 to 74 were self-employed, continuing to work by choice. This growing trend reflects a broader desire to remain engaged on one’s own terms.
The Hidden Cost of “Set and Forget” Retirement Planning
Challenging the Life-Cycle Approach
Traditional financial planning often relies on the life-cycle hypothesis, a 1950s economic theory that assumes individuals save during working years and then gradually spend those savings in retirement. While simple, this model overlooks the many financial variables that can shape one’s retirement.
Instead of assuming constant expenses and an abrupt stop to income, planners and savers should explore more flexible strategies — such as staggered retirement, income supplementation through part-time work, and varied spending patterns throughout retirement.
Cash Flow Modeling: Your New Retirement Compass
Planning for Lifestyle Variability
Retirement spending is rarely linear. Many retirees travel more in the early years, help children financially, or downsize their homes. Others work part-time for financial security or personal fulfillment.
Building a flexible financial plan that adapts to changing priorities and needs — rather than assuming a static withdrawal schedule — can lead to more realistic and resilient outcomes.
CPP and OAS: When You Claim Matters
Timing Is Everything
- Canada Pension Plan (CPP): You can start your CPP anytime between 60 and 70. While starting earlier means more payments overall, deferring to 70 can significantly boost your monthly benefit — a strategy that may pay off if you live into your 80s or beyond.
- Post-Retirement Benefits (PRB): If you start CPP at 65 but keep working, your continued contributions can still enhance your benefits through PRBs, unless you opt out by filing Form CPT30 with the CRA.
- Old Age Security (OAS): Like CPP, you can start OAS at 65 or delay until 70. But watch out: if your income exceeds around $93,000, OAS may be partially or fully clawed back through the recovery tax.
CPP and OAS Payment Arriving Soon in May 2025: Check the Amount, Eligibility, and Payment Dates
CPP OAS Payment June 2025 Details: What You’ll Get, When It Arrives & Who’s Eligible
Canada Benefit Payment Increase 2025: Inflation Boosts, New Programs & What to Expect this July
Tax Strategies for Working Seniors
Optimize Contributions and Withdrawals
Many seniors are surprised to find they may pay more tax in their 70s than in their 60s. That’s often because CPP and OAS kick in alongside mandatory RRIF withdrawals starting at age 72.
Key Considerations:
- RRSP Contributions: These reduce taxable income today, but can lead to higher taxes later if income rises in retirement. Be strategic about when and how much you contribute.
- Spousal RRSPs: If you’re over 71 but your spouse is younger, you can still contribute to a spousal RRSP, taking advantage of tax deferral and income splitting.
- RRIF Withdrawal Strategy: Withdrawals can be based on your spouse’s age to lower mandatory amounts. After age 65, up to 50% of RRIF income is eligible for pension income splitting.
- Incorporation for Self-Employed Seniors: For those with high self-employment income, incorporating may allow significant tax deferral, though accounting and legal costs should be factored in.
The Risk of Involuntary Retirement
Not Everyone Gets to Choose
While many envision working well into their 70s, circumstances may force early retirement. Health issues, layoffs, or industry shifts can abruptly alter the plan.
Self-employed individuals may have slightly more control over their retirement timing, but economic forces and personal health still play unpredictable roles. A backup plan is essential — including insurance, emergency funds, and flexible income streams.
Embracing a New Definition of Retirement
The happiest and healthiest retirees are often those who stay engaged in meaningful work, whether paid or unpaid. Retirement doesn’t need to mean the end of productivity — it can be a reinvention. By planning proactively, understanding the nuances of public pensions, and crafting a tax-efficient strategy, Canadians can enjoy a more fulfilling and financially secure next chapter — on their own terms.