If you are somewhere in your late 50s or early 60s and quietly wondering whether you will actually stop working at 65, a new C.D. Howe Institute report has data worth sitting with. The average Canadian retirement age climbed to 65.4 years in 2025, reversing a four-decade slide that had bottomed out near 61 around the year 2000. The direction has shifted, and the reasons behind it have real consequences for how you plan the next phase of your working life.

The numbers themselves are worth knowing before you negotiate anything. In the late 1970s, Canadians left the workforce at roughly 65 on average. That figure drifted steadily downward until it hit about 61 around 2000, then slowly reversed. Today the overall average sits at 65.4, with men leaving work at 66.2 and women at 64.5. That 1.7-year gap between men and women is not arbitrary. It typically reflects different Canada Pension Plan (CPP) accumulation histories, career interruptions for caregiving, and the growing reality that couples increasingly time their exits together rather than each pegging retirement to a personal birthday.

Why retirement keeps getting later

Three structural shifts are pulling the average retirement age upward, according to the C.D. Howe Institute analysis. First, Canadians reaching their mid-60s today can reasonably expect another two to three decades of life, much of it in good health. That changes the maths of drawing down savings. Second, Canada is running short on workers: population ageing, lower fertility rates and slower labour force growth have made experienced employees harder to replace. Statistics Canada's Labour Force Survey data have tracked this tightening for several years, particularly in skilled trades and professional services. Third, the kind of work most Canadians do has shifted in ways that make staying past 60 more physically sustainable. A knowledge- and service-based economy does not ask the same of your body as a manufacturing line or a resource site.

Women's stronger attachment to paid employment and improving CPP entitlements are also reshaping the aggregate figure. A generation ago, many women accumulated fragmented CPP records. That picture has shifted considerably, and it shows in the data.

Retirement is becoming a slide, not a cliff

One of the most practically useful findings in the C.D. Howe report is this: retirement is increasingly a gradual transition rather than a single date on a calendar. People are moving through part-time arrangements, consulting contracts, self-employment and phased exits before stepping back entirely. That means the decision in front of you is rarely a clean binary between full-time and full stop. It is a sequence of smaller choices about hours, scope and how your income is structured.

If you are thinking about the next few years, framing the options rather than fixing a date tends to produce better outcomes. Some paths worth considering:

• Reduced hours in your current role, negotiated ideally before you signal anything about a timetable for leaving.
• A consulting arrangement with the same employer, where you retain the relationships you value and shed the meetings and overhead you do not.
• A different, lower-intensity role at another organisation, sometimes at a lower base but with more schedule control.
• Self-employment or contract work, which can offer flexibility on income timing and CPP contribution strategy but shifts financial risk squarely onto you.

The pension system was built for a different life

Here is where the C.D. Howe report gets uncomfortable, and where careful reading pays off before you agree to any arrangement. Canada's retirement income framework was designed at a time when retirement was shorter, workplace pension coverage was more widespread, and relatively few Canadians worked beyond 65. That is not the world you are retiring into.

The practical consequence falls unevenly depending on your income level. For lower-income seniors, the Guaranteed Income Supplement (GIS) can actually discourage continued work: the GIS claws back benefits as employment income rises, which means taking on part-time work can leave you meaningfully worse off than staying home. For higher-income Canadians, public pension benefits (Old Age Security and CPP) continue flowing regardless of whether you keep earning. Same system, very different outcomes depending on where your income lands.

Before you sign any phased-retirement or part-time arrangement, run the full income picture: what the role pays after tax, and what happens to your GIS eligibility or OAS clawback (the OAS recovery tax applies above a net income threshold that, as of the 2026 tax year, sits around $90,997 CAD, adjusted annually by the CRA -- Canada Revenue Agency / Agence du revenu du Canada). It is entirely possible to accept a role that looks reasonable on paper and lose a meaningful portion of the benefit through these interactions. Check both numbers before you sign anything.

What this means when you negotiate

Canada's labour shortages and demographic shift mean that organisations increasingly need people with 30-plus years of experience to stay on in some capacity. That is leverage, and it is worth naming clearly when you sit down to negotiate. When you discuss a reduced-hours role, a consulting contract or a re-engagement after a formal retirement date, you are not asking for a favour. You are solving a workforce planning problem the employer already has. The Conference Board of Canada's compensation research has consistently shown that experienced senior professionals are underpriced in phased-exit conversations because they accept the first offer rather than benchmarking it.

A few things worth asking for directly:

• A clear hourly or day rate rather than a diluted full-time salary. Part-time work has a habit of becoming 80% of the workload for 60% of the pay when the initial terms are vague.
• Written scope covering what you will deliver, what falls outside that scope, and who decides when it changes.
• Continued access to training, internal systems and tools, particularly if you are moving to a consulting or contractor status.
• A formal review point at six or twelve months, so you are not locked into an arrangement that turns out worse than a clean retirement would have been.

If you are unsure what your experience is worth in the current market, compare against verified salary benchmarks for your role and seniority level rather than the number on your last pay stub from five years ago. Late-career salary negotiation is one of the moments where a specific, current market reference makes the biggest difference to the outcome.

If you are looking at a new employer, not just a new arrangement

Some workers in their 60s use this transition to leave a company they have outgrown rather than stay in a slower version of the same role. If that is your situation, the questions to put to a prospective employer are quite different from the ones you asked at 35. The promotion track matters less. What matters more is whether the culture genuinely values experience rather than just saying it does, whether the schedule is actually what the recruiter describes, and whether the benefits and health coverage fit a body that is not 30 any more.

Under Ontario's Human Rights Code and equivalent provincial legislation across Canada, age-based discrimination in employment is prohibited. That protection applies both ways: you have recourse if you are pushed out, but it also means an employer cannot legally decline to hire you solely on the basis of age. Knowing that changes the confidence you bring to an interview. CPHR Canada (Chartered Professionals in Human Resources) notes that age-inclusive hiring practices are increasingly part of formal HR frameworks, particularly in federally regulated sectors covered by the Canadian Human Rights Act.

Spend real time on employer reviews from people who joined later in their careers. What employees say about a company shifts depending on what stage of life they arrived at. Filter your research accordingly, and look specifically at what reviewers say about flexibility, schedule predictability and how older colleagues are treated day-to-day.

The decade ahead is longer than you think

The single number worth keeping in mind is this: two to three more decades of life after your mid-60s, much of it in good health. That is not a footnote. It changes what saving, working and resting need to accomplish for you over that span. It also changes the tone of any conversation you have with an employer. You are not winding toward an exit; you are choosing how to structure a long, active second chapter.

The retirement age is rising because lives are longer, work is less physically demanding for most Canadians, and employers have grown more dependent on experienced people. All three of those forces are structural, not temporary. Whatever you decide about your own timing, make sure the decision is yours: run the GIS and CPP numbers on both sides of any income change, and negotiate your arrangement in the open market rather than accepting the first version put in front of you. The C.D. Howe Institute data make one thing clear -- the labour market has more room for you at 65 than it did for your parents. Use that room deliberately.