More Canadians are challenging the traditional idea of retirement, opting to continue working well into their 60s and even 70s — whether for passion, purpose, or financial necessity. But working past 65 changes how you should approach government benefits like the Canada Pension Plan (CPP) and Old Age Security (OAS), as well as how you manage your taxes.
If you’re planning to work after 65, or considering a phased retirement, here’s a guide to smart CPP, OAS, and tax planning strategies tailored for modern retirement.
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Retirement Reimagined: Financial Independence Over a Finish Line
Retirement used to mean stopping work at 65, collecting a pension, and living on savings. But today, many seniors view retirement not as a full stop, but as a shift — from full-time employment to part-time, self-employment, or passion projects.
In fact, according to Statistics Canada, 27% of women and 41% of men aged 65 to 74 were still working in 2022 — often by choice, not necessity. Many pursue flexible roles, consulting, or self-employment, leading to a need for tailored financial strategies that reflect their unique circumstances.
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Understanding CPP After 65: Timing is Everything
You can begin collecting your Canada Pension Plan (CPP) as early as age 60, or delay it until age 70. Here’s what you need to know if you plan to work past 65:
Benefits of Delaying CPP:
- For each month you delay past age 65, your CPP increases by 0.7%, up to 42% more at age 70.
- Delaying CPP may be smart if you’re healthy and expect to live well into your 80s.
Still Working at 65? What About Contributions?
- If you haven’t started receiving CPP, you’ll continue contributing.
- If you start CPP at 65, any future contributions will count toward a Post-Retirement Benefit (PRB) — a small boost paid starting the following year.
Want to Stop Contributing to CPP?
- You must file CRA Form CPT30 and get approval.
- Submit the form to both CRA and your employer to officially stop CPP deductions.
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OAS and the Income Clawback 2025: Why Deferral Might Help
You can apply for Old Age Security (OAS) at age 65, or delay it until age 70, gaining 0.6% more per month of delay — up to a 36% boost.
But if you’re still working and your annual income exceeds $93,000 (approx. for 2025), your OAS will face a recovery tax (clawback), reducing or eliminating your monthly payments. In such cases, delaying OAS can:
- Avoid clawback penalties
- Boost lifetime benefits if you live longer
- Align with reduced income post-retirement
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Tax Planning Strategies for Working Seniors
Working past 65 opens up new tax planning opportunities, but also creates risks if not managed properly.
1. RRSP Contributions Aren’t Always Best
- Contributions reduce current taxes — but if your income in your 70s (from CPP, OAS, RRIF) is higher, you could pay more tax later.
- Mandatory RRIF withdrawals begin at 72, potentially at a higher tax rate.
- Evaluate your lifetime tax liability, not just year-by-year refunds.
2. Use a Spousal RRSP
- If you’re over 71 but your spouse is younger, you can still contribute to a spousal RRSP, shifting taxable income to the younger spouse later on.
3. RRIF Income Splitting
- After age 65, up to 50% of eligible pension income, including RRIF withdrawals, can be split with a lower-income spouse, reducing household tax.
4. Incorporation for Self-Employed Seniors
- Seniors running sole proprietorships may benefit from incorporating their business.
- Corporate tax deferral could exceed 40%, though professional advice is essential due to legal and accounting costs.
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The Risk of Involuntary Retirement
Planning to work well past 65 can be empowering — but risky.
- Job loss, health issues, or market shifts can force early retirement.
- Seniors relying on continued income should ensure:
- Emergency savings are in place
- Insurance covers health-related work loss
- Retirement plans are flexible and realistic
Takeaway: Redefine Retirement On Your Terms
Whether you’re working for financial freedom or personal fulfillment, working past 65 means rethinking CPP, OAS, and tax planning.
Key steps:
- Consider delaying CPP and OAS for higher lifelong benefits.
- Analyze whether RRSP contributions will actually save you tax long-term.
- Use spousal RRSPs and income splitting if married.
- Evaluate incorporation if self-employed.
- Prepare for unexpected retirement scenarios.
By rethinking retirement as a transition rather than an endpoint, you can build a plan that gives you more freedom, fewer surprises, and smarter tax outcomes — well into your 70s and beyond.