Countries like China and Canada are considering raising the statutory retirement age to accommodate an aging population and reform pension plans. In Canada, there is no mandated retirement age, but the standard age to start receiving public pensions is 65. Canadian seniors can also start receiving CPP retirement pension as early as age 60 or as late as age 70. With Canada’s population aging rapidly due to a record low birth rate, experts believe it makes sense from a demographic and economic perspective to raise the retirement age. However, politically, it might be a difficult sell, as evidenced by the previous Conservative government’s failed attempt to raise the age of eligibility for OAS and GIS.
China recently outlined plans to allow workers to choose to continue working beyond the retirement age, with reforms expected to be completed by 2029. The life expectancy in China has risen to 78 years, surpassing that of the United States, and is projected to exceed 80 years by 2050. The country is also facing a declining birth rate and an aging population, putting pressure on its unsustainable pension system. Canada is also expected to see a significant increase in its proportion of people aged 65 and older, which could lead to challenges such as rising healthcare and pension costs. Bonnie-Jeanne MacDonald, the director of financial security at Toronto Metropolitan University’s National Institute on Aging, emphasized the need for Canada to address these challenges proactively.
The cost of living in Canada is already forcing many Canadians to delay or reconsider their retirement plans, leading to an increase in the average retirement age over the last decade. While Canada has a more flexible retirement model compared to other countries, experts believe there are social, economic, financial, and health benefits to delaying retirement. Every year that a person delays their retirement benefits, their payments increase, and remaining in the workforce longer helps them save more for retirement. Experts also point out that the average 65-year-old in 2024 is in better health compared to previous generations, making it more beneficial for them to delay retirement and continue working.
While there is no current consideration by the federal government to raise the retirement age for public pensions in Canada, experts believe that delaying retirement could help overcome labour shortages and provide economic benefits. Don Kerr, a demographer at King’s University College at Western University, emphasized that delaying retirement could be beneficial for individuals who are in good health and at the peak of their careers. However, there is a need to educate Canadians about the advantages of delaying retirement and the potential economic contributions they can make by continuing to work. Despite the challenges posed by an aging population, experts believe that Canada can take proactive steps to support an aging population and address the rising costs associated with pension and healthcare.
