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May 19, 2021

Canada needs to revamp retirement age: report

Improved healthcare and falling birth rates mean the average age of people in developed countries is rising. By 2050, some societies face the expensive prospect of having as many retirees as active workers, according to the OECD.

And paying pensions to all those folks will be no mean feat.

Which is why Canada has to push up its normal retirement age from 65 by at least a few years, argues McMaster University prof Martin Hering. Not doing so will mean big problems for government pensions like Old Age Security, he predicts.

Some countries are already increasing the full retirement age to beyond age 65: Spain, Australia and Germany to 67; the United Kingdom to 68; and Denmark to age 67 and then linked to life expectancy after that. 

Along with Norway, Iceland and the U.S. that brings to eight the number of developed countries that already have or plan to have normal pension ages above 65, the OECD reports.

But that’s only part of the story: The actual average age when people stop working is also quite different.

In Korea, the average man clocks in until he’s over 71 – more than 11 years beyond the country's official retirement age; by contrast, his counterpart in Austria gives up the daily grind at about 59, or six years ahead of the official retirement plateau.

Here at home, we Canadians find ourselves leaving work at just over 63 years and starting to collect OAS benefits two years later. 

How long do people spend in retirement? Just over 22 years for women and about 17 for men, who tend to work longer and die younger.

For women, the longest retirements are in France, where retirement stretches on for about 27 years; France also holds the OECD record for men – 24 years spent in retirement, compared with 19 here at home.

Given these numbers, should Old Age Security kick in a couple of years later? If that happened, would Canadians take to the streets in protest as they have in Greece?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...