OAS changes redefining retirement

Is 67 the new 65? Last Thursday's federal budget revealed that Canadians will have to work two years longer before they can expect to collect OAS payments.
Changes to Old Age Security rules in last week's budget have changed retirement planning for millions of Canadians. (iStock)

Is 67 the new 65? It is if you’re referring to the latest Old Age Security reform. Last Thursday’s federal budget revealed that Canadians will have to work two years longer before they can expect to collect their money each month.  

If you’re 54 and over, don’t worry. You can still ditch work and collect at 65. For the rest of us though, the new age of eligibility will be phased in between 2023 and 2029.  

At least that’s the plan today. A lot could happen between now and then.  

Of course, not everyone will want to retire at 67. And not everyone can. For someone struggling financially, stepping away from the workforce at any time can seem like a pipe dream.  

And some people just aren’t ready to trade in business meetings for an RV in Florida at any age. Their work doesn’t simply give them cash to pay the bills, but an identity. And that’s hard to leave behind.  

But what if you’ve been saving your money, paying off your house and preparing for the big day for years? How does anyone know when it’s time to leave the workforce for good? There are a few questions you can ask yourself before you take the plunge.  

More than money

First, the obvious one. Do you have enough money to retire? Some financial planners tell us we’ve got to have a million dollars to retire well. They say we need that much because we’re living longer now. Others aren’t so sure. If your home is paid off and you’re essentially debt free, you should be able to get away with living on about 50 per cent of what you’re used to. So that’s the goal.  

Some questions are less obvious though. Before writing your resignation letter, it’s important to ask yourself if you’re emotionally ready. What exactly does your job give you? If that’s a sense of purpose, you’ll probably want to find something else to fill that role. Make a commitment to spend more time with your family. Or volunteer somewhere.  

If your job gives you a social network, you’ll want to start building that up outside of work too. Meet up with old friends for dinner. Join a book club or play a sport. Make some new friends.  

Finally, you’ll also want to sit down and talk to your spouse. Does he plan on retiring too? What if she has no intention to retire for another five years? It’s important to talk it out. Because who wants to hang out on a beach for those five years alone?