At what age should I retire?

In Canada, the age for eligibility for retirement is set at age 65 in government plans and in most private plans. There are, however, other possible scenarios.

Before age 60

• If you have a pension plan through your employer, you could be eligible for early retirement. Your benefit will be reduced since you will receive your pension over a longer period.
• Personal savings are the only other source of available income.

Between 60 and 64

• Everywhere in Canada, except in Quebec – for which the equivalent is the Quebec Pension Plan (QPP), you can choose to start receiving a pension through the Canada Pension Plan (CPP). If you do so before the age of 65, there will be a penalty. You will only receive a portion of the pension for the rest of your life.
• If you have a pension plan through your employer, you could be eligible for early retirement. Your benefit will probably be reduced since you will receive your pension over a longer period.

At age 65

• All the government plans are available without penalty.
• You can choose to defer payment of government plans up to age 70.
• If you have a pension fund through your employer, you qualify for the maximum pension.

If you’re thinking of retiring early, take the time to consider the impact that it will have on your savings

• You will save for a shorter period.
• Your savings will generate returns for fewer years (your money will therefore not have grown as much).
• You will have to deal with increases in the cost of living (that is, each year of retirement).
• You will have to live several years with your savings (with life expectancy continually increasing, you could outlive your savings).

For advice and answers to your questions, contact us.