This is welcome news, especially for healthy, active seniors who can still work after age 65. Another crucial factor that has led to the abolition of the mandatory retirement age is longer life expectancy. Canada’s life expectancy for 2025 is 83.26, up from 83.11 in 2024.
Better preparation for your retirement
According to a report from the Conference Board of Canada, approximately 44% of Canadians between the ages of 60 and 69 prefer to continue working, even part-time, due to financial necessity. By switching to a more flexible arrangement, many employees will be able to boost their personal savings and avoid financial disruption in retirement.
In addition to ending mandatory retirement, employees aged 65 or older can choose to continue contributing to the Canada Pension Plan (CPP) to increase future benefits. There is also a phased retirement. Future retirees can defer part of their CPP and Old Age Security (OAS) while working part-time.
Additionally, effective November 2025, the Canada Revenue Agency (CRA) has increased the OAS clawback threshold from $90,997 to $97,500. This move encourages Canadians to continue working.
From January 2026, CPP users will be able to collect a pension as early as age 60 or defer payments until age 75 (previously 70). The incentive to defer CPP payments until age 75 is a permanent 64% increase in monthly benefits.
In terms of employer obligations, employers should implement non-discrimination policies and abolish age-based termination clauses. The federal government expects that more than 500,000 Canadians will remain employed by 2030 as a result of the historic reform of the pension system.
Save and invest
CPP and OAS benefits apply for life, even if they serve as a safety net or as a basis for your pension. With the full implementation of the CPP improvements in 2025, the pension will replace 33.33% of the average pre-retirement income. The average monthly CPP payment for a new retiree is almost $850, while the maximum OAS (ages 65-74) is $740.09.
Due to the partial substitution power of the CPP and the OAS, it is necessary to close or reduce the income gap. If finances allow, Canadians are encouraged to contribute to the Registered Retirement Savings Plan (RRSP) and the Tax-Free Savings Account (TFSA). Money growth from income-producing assets, such as stocks, is tax-free in both retirement accounts.
For income-oriented investors
Atrium MIC (TSX:AI) is just one of many TSX stocks that can provide stable income streams in retirement, on top of your CPP and OAS benefits. At $11.54 per share, the dividend yield as of November 11, 2025 is 9.39%. Moreover, the payout frequency is monthly. An investment of $19,169 will yield $150 in monthly passive income.
The $551.75 million Mortgage Investment Corporation provides residential mortgages, commercial real estate loans and bridge financing. Given its conservative credit policy, Atrium has a high-quality portfolio (96% is covered by first mortgages).
In terms of dividend consistency, Atrium has not missed a dividend payment since September 2012. In addition, the MIC pays out a special dividend at the end of each year.
Without fear
Canadians approaching 65 are now free from retirement anxiety. The new, flexible retirement model allows them to stay active while working toward achieving their long-term financial goals, including retirement.
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