Canadians dread reaching 65, which many consider the “end of the line,” not a milestone to celebrate. Fortunately, the federal government decided to change the long-standing retirement model. Effective November 2025, retiring at 65 is now a personal choice instead of a deadline.
This is welcome news, especially for healthy, active seniors who are still capable of working past age 65. Another crucial factor that prompted the abolition of the mandatory retirement age is longer life expectancy. Canada’s life expectancy for 2025 is 83.26, up from 83.11 in 2024.
Better preparation for retirement
According to a Conference Board of Canada report, around 44% of Canadians aged 60 to 69 prefer to keep working, even part-time, due to financial necessity. Shifting to a more flexible arrangement will enable many workers to boost personal savings and avoid financial dislocation in retirement.
In addition to ending the mandatory retirement, workers age 65 or older can choose to continue contributing to the Canada Pension Plan (CPP) to increase future benefits. A phased retirement is also in place. Prospective retirees can defer part of their CPP and Old Age Security (OAS) while working part-time.
Also, effective November 2025, the Canada Revenue Agency (CRA) increased the OAS clawback threshold from $90,997 to $97,500. This move encourages Canadians to continue working.
Starting January 2026, CPP users can collect pensions as early as 60 or delay payments until age 75 (previously 70). The incentive to defer CPP payments to age 75 is a permanent 64% increase to the monthly benefits.
Regarding employer obligation, employers must implement a non-discrimination policy and remove age-based termination clauses. The federal government expect over 500,000 Canadians to remain in the workforce by 2030 as a result of the historic reform in the retirement system.
Save and invest
CPP and OAS benefits are for life, although they serve as safety nets or foundations in retirement. With the full implementation of the CPP enhancements in 2025, the pension replaces 33.33% of the average pre-retirement income. The average monthly CPP payment for a new retiree is nearly $850, while the maximum OAS (age 65-74) is $740.09.
Because of the partial replacement power of the CPP and OAS, there’s a need to fill or reduce the income gap. If finances allow, Canadians are encouraged to contribute to the Registered Retirement Savings Plan (RRSP) and Tax-Free Savings Account (TFSA). Money growth from income-producing assets, such as stocks, is tax-free in both retirement accounts.
For income-focused investors
Atrium MIC (TSX:AI) is just one of the many TSX stocks that can provide stable income streams in retirement on top of your CPP and OAS benefits. At $11.54 per share, the dividend yield as of November 11, 2025, is 9.39%. Moreover, the payout frequency is monthly. A $19,169 investment will generate $150 in monthly passive income.
The $551.75 million Mortgage Investment Corporation provides residential mortgages, commercial real estate loans, and bridge financing. Given its conservative lending policy, Atrium maintains a high-quality portfolio (96% are secured by first mortgages).
Regarding dividend consistency, Atrium hasn’t missed a dividend payment since September 2012. Also, the MIC declares a special dividend at the end of every year.
Anxiety free
Canadians nearing 65 are now free of retirement anxiety. The new, flexible retirement model allows them to remain active while working to achieve their long-term financial goals, including retirement.
