Retirement Age Debate In Canada 2025: The fixed retirement age of 65 in Canada is under examination amid an increasing policy debate. As Old Age Security (OAS) costs continue to increase, Generation Squeeze, along with other think tanks, argues that reforms are necessary to maintain fiscal health in the absence of further tax hikes. They highlight the potential for billions of dollars in savings through means testing or reducing benefits to high-income retirees that could be directed to other social programs.
Group Calls On Well-Off Retirees To Give Up A Small Portion
Generation Squeeze’s most valuable recommendation calls for the elimination of OAS payments to wealthy retirees whose household incomes exceed $180,000. The group believes that over five years such a policy would save $36 billion, which would then be allocated to affordable housing and childcare for low-income seniors.
Canada OAS System Shows Weak Terms Of Performance
As of now, the OAS program is one of the largest expenses in the federal budget. The costs—projected to rise from $78 billion in 2023 to over $275 billion by 2060—are a threat to maintain balance. This drastic rise in costs is largely due to the aging population and increase in life expectancy along with the need for structural reforms.
Retirement Age Remains The Same—For Now, But For How Long?
The province of Quebec was the only Canadian jurisdiction to raise the retirement age for publicly funded benefits (QPP) to 67; however, all other Canadian jurisdictions are currently debating the prospect of raising the retirement age to 67. An increasing number of Canadians polled are expecting to retire past the age of 65, and a sizeable fraction of Canadians polled are either not expecting to retire on time due to financial constraints or expecting to retire later because of financial constraints.
Looking Ahead: What To Expect
The increase in OAS spending as well as the increase in demand for social services might motivate policymakers to look into flexible retirement age, targeted cuts, or contribution-based incentives. Regardless of the reform, there is a social contract for fiscal reality and the elderly Canadians to be sheltered from poverty that has to be adhered to.
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