Countries around the world, including China and Canada, are facing challenges related to their aging populations and are considering raising the statutory retirement age as a solution. In Canada, there is no mandated retirement age, but the standard age to start receiving public pensions is 65. With the country’s population aging rapidly due to a record low birth rate, experts believe it makes sense to raise the retirement age from a demographic and economic perspective. However, politically, it may be a challenging decision to implement.
China, with one of the world’s lowest retirement ages, has outlined plans to allow workers to continue working beyond the retirement age as a response to its aging population and declining birth rate. Economists warn that China’s current pension system is unsustainable and will likely run out of money by 2035. Similarly, Canada is also facing significant pressure on its economy, long-term care, and health-care system as its baby boomer population moves into retirement. Experts agree that delaying retirement could have social, economic, financial, and health benefits for individuals and the country as a whole.
There are concerns about the cost of living in Canada, which is already forcing many Canadians to delay or reconsider their retirement plans. The average age at which Canadians retire has gone up over the last decade, reaching 65.1 in 2023. While Canada has a more flexible retirement model compared to other countries, it is still facing aging challenges. Experts emphasize the advantages of delaying retirement, such as increasing retirement benefits for every additional year of work and helping individuals save more for their future.
Bonnie-Jeanne MacDonald, the director of financial security at Toronto Metropolitan University’s National Institute on Aging, warns that Canada is facing a “perfect storm” with its baby boomer population reaching retirement and putting pressure on various sectors. She emphasizes the need for Canada to proactively address the challenges posed by its aging population. Don Kerr, a demographer at King’s University College at Western University, notes that the average 65-year-old today is in better health compared to previous generations and could make a major economic contribution by delaying retirement.
While there is no current consideration in Canada to raise the eligibility age for public pensions, experts suggest that it could be a viable solution to address the challenges posed by an aging population. Delaying retirement could help overcome labour shortages, increase retirement benefits, and support the economy in the long term. However, implementing such changes may face political challenges, as was seen with a previous attempt to raise the age of eligibility for Old Age Security and Guaranteed Income Supplement, which was later scrapped by the Canadian government. Overall, experts agree that delaying retirement could have significant benefits for individuals and the country as a whole.
