The idea is to both protect government plans and increase benefits
By Jennifer Hughes
Photo: iStock/monkeybusinessimages.
Canadians are living longer, and that means a longer retirement. It also means a shortage of workers as boomers retire, fewer private pensions, and shrinking government revenues. With that in mind, the Canadian Institute of Actuaries (CIA) recently called for the retirement age to be pushed to 67 or later.
In a document entitled Retire Later for Greater Benefits, the CIA said that raising the retirement age to 67 would mean higher benefits for retirees while keeping the government plans viable.
Currently, Canadian and Quebec pension plan benefits can normally be claimed at 65, or at 60 (at a reduced rate), or can be deferred to 70 (to get increased benefits). The CIA would like to change these ages to 62, 67, and 75, respectively. The document also calls for the maximum age at which you must start drawing funds from an RRSP to be raised from 71 to 75.
The age to begin collecting Old Age Security (OAS) benefits would also be pushed from 65 to 67, with the maximum deferred age raised to 75. According to the CIA, the change would mean that a retiree would get 14.4% more in OAS benefits.
The CIA suggests that these changes could be phased in gradually, so that the retirement age would increase by three months every year beginning in January 2021 until 2029.
